Today's Hotelier - June 2017 - 30
TAXES & TR AVEL
is full of
by ALFREDO ORTIZ
UMMER IS FINALLY UPON
us, which means vacation
season and an injection of
money into the hospitality
According to a AAA survey more than one-third of Americans
plan to take a family vacation of 50 miles
or more away from home in coming
months. This means either hitting the
road or navigating the skies to reach
their summer vacation destinations -
spending a small fortune on food, travel
and lodging along the way.
According to American Express, the
average vacation expense per person in
the U.S. is $1,145 - or $4,580 for a family
of four. However, a large chunk of that
money doesn't go to businesses in the
hospitality industry, it's sucked up by
the government through taxes.
So although many Americans will be
participating in this yearly ritual, some
3 0 | JUNE 2017 | TODAYSHOTELIER.COM
will be cutting their trips short, spending
less extravagantly or forgoing a vacation altogether because of the costs of
taxes. And as the government takes bigger chunks of people's vacation budgets,
its small businesses like those in the
hospitality industry that suffer.
For example, before hitting the road
in the family mini-van, a pit stop at the
gas station is in order, which is where the
first of many hidden taxes can be found.
For every $40 spent at the pump, $8 goes
to the government. More specifically, the
federal gas tax comes in at 18.4 cents
per gallon, and state gas taxes average
out at roughly 27 cents per gallon. And
states like New York and Pennsylvania
can have gas taxes as high as 50 or even
70 cents per gallon. These pennies can
add up quickly - becoming a big drain
on a vacation budget.
Airfare is also expensive because of
taxes. Flights within the continental U.S.
are subject to a 7.5 percent tax, an $8.70
facilities tax, a $4 federal segment tax,
and a $5 to $10 security fee to just name
some of them. When aggregated, all of
the taxes and fees can add hundreds of
dollars to a family's plane ticket costs.
In fact, about 25 percent of a plane ticket
price goes to the U.S. federal government
Once the plane has landed, it doesn't
get any cheaper. Hidden taxes can also
be found in rental cars. Between insurance, mandatory theft protection, sales
tax and other surcharges, a rental car
could end up costing more than double
the published base price.
All-in-all, travel-related taxes can
inflate travel prices by 50 percent.
And as AAHOA members know well,
hotels are not exempt from the tax man
either. In the U.S., travelers can pay as
much as $50 in taxes for a $200 room,
depending on the city.