a very misleading travel website

TravelersFirst.org is a very misleading website that exists for a single purpose, to get signatures on a petition in support of the so-called Internet Travel Tax Fairness Act sponsored by several large OTAs (online travel agencies such as Orbitz, Expedia, and Travelocity). While I don't take a position either way on that proposed legislation, I do object to misleading statements in support of the act. The basic issue is that cities would like to collect sales tax on the full rate for rooms booked through OTAs, and the Act would prevent this from happening.

To demonstrate the facts of the matter, let me do an actual comparison based on a booking for a 6th Avenue View room at the Ritz-Carlton Central Park in New York for one night, August 14. These were the quotes as of 12 noon on July 14th.

Orbitz will charge you $795 for the room + $121.56 in taxes and fees for a total due at booking of $916.56.

If you book direct through Ritz-Carlton, you will pay the same $795 for the room + $120.77 in taxes for a total payable at check-out of $915.77.

Here's what the OTAs aren't telling you:

• Orbitz charges you up-front, then remits their NET rate to the hotel. If the NET rate is 80% of the published rate, Orbitz keeps 20% as profit.
  
  
• Ritz-Carlton pays sales tax to New York based on the NET received from Orbitz, and New York misses out on much needed revenue. But you're still paying "taxes and fees" on the full 100%. What's happens with the the sales tax on the remaining 20% that doesn't go to New York? Answer - Orbitz keeps it as a "fee", adding to the 20% they're already marking up the room.
  
  
• The proposed legislation fights the attempt of cities like New York to collect the full amount of the sales tax that is collected, rather than allow the OTAs keep it as a "fee."

So despite the alarmist headlines of the website, here are some facts:

• Converting Orbitz's "fee" into sales tax to New York will not make your stay more expensive.
  
• Sending the sales tax to New York will actually help the local economy of that city.

And while I'm on the subject, I can get you a much better deal for this same booking at Ritz-Carlton Central Park:

• I can get you upgraded at time of booking. You'll pay $745 for a Deluxe room and be upgraded to the $795 6th Avenue View room.
  
• You will receive a complimentary Daily American breakfast for two, in BLT Market or via room service. Free just by booking through a Virtuoso travel consultant.
  
• You will receive an additional $100 hotel credit to be used for any charge within the hotel except room and tax, another Virtuoso amenity.
  
• You won't pay a cent until you check-out.

Ritz-Carlton Central Park (search here on Google)

copyright (c) 2010 by David Ourisman LLC. All rights reserved. If you have comments on this column, or questions about booking travel, email me or visit my website.
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