A number of cities, states, etc, are getting together for a class action lawsuit against online hotel booking companies. You know, the ones that let us search all hotels in the city and find the best deal and fits our needs best. Those ones. CNN explains why:

Here’s what all the fuss is about. Say a customer walks into a hotel and rents a $100 room for the night. On the bill, of course, the hotel will add a charge representing whatever the local town’s occupancy tax is – let’s say 6%. In this example, the customer pays $106, and the municipality gets $6. Now suppose the same customer rents the same room using an online travel company. The OTC and hotel typically have a deal under which the OTC agrees to list the room at a minimum retail price fixed by the hotel – say, again, $100 – though the hotel will only actually charge the OTC a discounted rate, say $80. The difference between the tax on $100 and $80 is the crux of the dispute.

The actual room rental paid by the OTC to the hotel is $80, so the OTCs treat that discounted price as the one subject to the local occupancy tax. The other $20, they argue, is compensating the OTC for its online services, not the hotel for its room. Accordingly, the OTC remits only $4.80 in taxes (6% of $80) to the hotel, which, in turn, forwards that sum to the municipality. So this time the customer still pays $106, but the municipality gets only $4.80 instead of $6.

The doom and gloom ending to the article is that simply to fight the lawsuit, some of the booking companies could go bankrupt. Pretty crap deal.

There are a couple of things that I don’t understand about why cities would want to do this here and now. It would seem to me that online booking services facilitate more tourists coming to your city. I’m sure that if you sue the company that’s sending people your way, they’re not going to be so keen to list you on their site. Meaning fewer tourists. Second, isn’t this the way that all tour operators and travel agents always work? I may be way off, but it would make sense that people booking the room should only pay tax on what they pay for the room. The revenue that they make for their service will then be taxed separately. I’m all for taxing the hell out of thing that have a externalized cost to society, but what’s the cost here? Why should this be taxed twice?.

Here’s to hoping that the online booking folks win. I’ve been using them for years and they’ve been invaluable for finding a place to crash in certain parts of the world.

Light reflecting of Lake Geneva dances on the ceiling of Chillon's dungeon. Click for larger version.

CNN/Budget Travel had an article yesterday detailing what they consider to be the most beautiful castles in the world. One on the list is the beautiful Château de Chillon which I raved about earlier this month. The rest of their list is:

England: Bamburgh Castle and Leeds Castle
Scotland: Eilean Donan
Wales: Beaumaris
Germany: Neuschwanstein Castle
Denmark: Kronborg Castle
France: Château de Castelnaud and Haut-Koenigsbourg Castle
Romania: Bran Castle
Switzerland: Château de Chillon

Of all the castles on the list, I’ve only been to Chillon, so looks like I’ve got my work cut out for me. Check out the article for more on each castle.