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Edition XXXIII | August 15, 2018
The Travel Technology Association
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Monthly analysis & insight on policy issues affecting the travel technology industry

Washington, D.C.
Federal Affairs

FAA Reauthorization
Congress has until September 3oth to pass a new Federal Aviation Administration (FAA) reauthorization bill before the current law expires.  While the U.S. House of Representatives passed its version in the spring, the U.S. Senate has yet to consider its bill on the floor.  Several factors have contributed to this delay, including a lack of floor time as Senate leaders have spent much of the summer passing appropriations bills and confirming judicial and other Trump Administration appointees.  However, with roughly three weeks added to the Senate schedule due to a partial cancellation of the traditional August recess, the FAA bill may see the end of the runway in time.

Since the Fourth of July, the Senate Commerce Committee has been sifting in earnest through proposed changes and other objections from senators to the Committee-passed FAA bill with the goal of finding bipartisan agreement on as many amendments as possible before heading to the floor.  This will be necessary because, despite the extended August calendar, the time allotted to debate and pass the FAA bill on the floor will be tight.  Further, the Senate must also allow for enough time to conference with the House in September to avoid another extension.

Travel Tech has a number of concerns with both the House and Senate measures and has been advocating for changes that would guarantee that both consumers and the independent travel distribution industry are protected in the air travel marketplace.  This includes language that would mandate new minimum customer service standards for large ticket agents, an overly burdensome and completely unnecessary set of requirements.  Most perplexing is that no consumer is asking for new protections from ticket agents – large or small, online or bricks-and-mortar – they’re instead demanding it from airlines.  And yet, as written, this legislation would not even ensure that airlines cooperate with ticket agents to fulfill the new requirements, leaving consumers in dark.  Fortunately Travel Tech’s concerns have been heard by the Committee and several senators are working to make these commonsense changes to the legislation.

Honolulu, H.I.
Short-term Rental Policy

New Travel Tech Study: Alternative Accommodations Critical to Oahu Economy

A study released last month, commissioned by The Travel Technology Association (Travel Tech) and conducted by local economic consulting firm Kloninger & Sims, finds that severe restrictions on Oahu’s alternative accommodations  would have a devastating impact to the local economy. The study is in conjunction with both Expedia and Airbnb. According to the Kloninger study, 60% of Oahu’s alternative accommodations are located outside of resort-zoned areas. Without alternative accommodations outside of resort zoning, Oahu would stand to lose the following on an annual basis:

  • $336 million in household income
  • 7,000 jobs
  • $1.2 billion in economic activity
Oahu’s economy has benefited from recent increases in airlift to the island, which could be undermined if severely restrictive legislation is passed, the study found. Travel Tech and our members are committed to working with local leaders and elected officials to find a regulatory solution that balances the economic welfare of residents and business on Oahu with the industry’s impact to neighborhoods and local character.

See our piece in the Hawaii Star-Advertiser discussing the study here.

Washington, D.C.

Steve's Corner
Travel Tech's Outlook in Wake of Wayfair Decision

This summer, the U.S. Supreme Court ruled on the landmark Wayfair case, paving the way for states to require remote sellers to collect and remit sales and use taxes. While the fallout of this decision will take many months, or perhaps years, to untangle, the fundamental question of requiring out-of-state sellers of goods to collect and remit sales and use taxes does not and should not apply to online travel agents (OTAs) and short-term rental (STR) platforms.  

At its core, the decision is about whether any sales tax is collected by remote sellers. OTAs already collect and remit all applicable taxes on hotel rooms booked via their platforms. Those taxes are then remitted to the hotel and the hotel is responsible for remitting to the state and local jurisdictions. For STR bookings, in most places, the same applies. Airbnb, for example, is collecting and remitting taxes on behalf of its hosts in 43 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.

As I travel across the country and meet with legislators, I am often asked how the Wayfair decision impacts Travel Tech’s members. The short answer is “it doesn’t”, because our members are already collecting and remitting all applicable taxes on hotel rooms and short-term rentals booked through their platforms. As states draft legislation requiring “marketplace facilitators” to collect and remit sales taxes, with an eye toward remote sellers of retail goods, they must keep in mind the law of unintended consequences and be sure not to inadvertently disrupt the efficient flow of tax revenue for accommodations booked through OTAs and STR platforms.

Washington, DC

Member Spotlight

Expedia teams with Chase to beef up travel card perks

Travel Tech member Expedia is teaming up with Chase to add new features and capabilities to the Chase Ultimate Rewards travel card. The companies say Chase cardmembers will get access to a higher level of travel booking features using Expedia Group’s network of flights, hotels, vacation rentals and car rentals along with thousands of travel experiences and activities.

Lorraine Hansen, Head of Ultimate Rewards and Loyalty Solutions at Chase, says consumers are using online travel features more than ever, so teaming up with Expedia was a natural. 

“Whether on desktop or mobile, we are providing simpler and smarter booking tools with over a million options to search, delivering even more value and flexibility to Ultimate Rewards cardmembers,” Hansen said.

Joe Cortez, NerdWallet's points and miles expert, says the partnership will give cardholders more flexibility and choices when planning travel.

"For young optimizers who enjoy the points and miles game, this news gives more value to Chase over American Express, Citi and Capital One," Cortez said in an email to ConsumerAffairs. "Because of Expedia's reach and integrations with global distribution systems, consumers may have more opportunities to use their Ultimate Reward points or the ability to build more complex itineraries through Expedia that weren't previously possible."

On the other hand, Cortez says the card holds advantages beyond points and miles, since it pays up to 2 percent cash back on purchases.

The card also carries a feature that the airlines are hoping gets removed from legislation funding the Federal Aviation Administration (FAA). A 2012 rule requires airlines to include all taxes and fees when they advertise a fare, but the house version of the FAA reauthorization bill removes that requirement.

When selecting a flight using the Ultimate Rewards card, consumers will see the total trip cost displayed at check-out. In addition, there will be extra flight search options by class and opportunities to upgrade throughout the booking process.

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