A new study conducted by the Travel Tax Institute, a new arm of the U.S. Travel Association, revealed that high hotel taxes and other tourism-related taxes are having a major impact on travel decisions.
Among the key findings:
- High Taxes Alter Travel Plans: 49% of travelers say they have altered their plans due to high travel taxes, including staying at less expensive hotels, spending less on shopping and entertainment, and visiting during the off-season.
- Taxes on Hotels, Airfare High: 68% of travelers rated hotel taxes as "very high" (35%) or "high" (33%); 66% rated taxes on airfare as "very high" (38%) or "high" (28%).
- Travelers Surprised by High Rental Car Taxes: Nearly two out of three travelers surveyed (64%) say that the total tax rate on rental cars is "much more" than they expected to pay compared to other travel taxes.
- Travelers See Taxes Rising: Nearly two-thirds (65%) say they expect to pay higher travel taxes in the year ahead; only two percent believe taxes will decrease.
- Travel Taxes Should Fund Travel Infrastructure: 60% of travelers said travel taxes should be reinvested in travel infrastructure, such as roads and airports, while 49% said "travel/tourism marketing and promotion" also would be an appropriate use of the revenues. Only 14% of surveyed travelers cited "non-travel related expenditures" such as "contributions to government general funds" as an "appropriate" use of travel taxes.
In addition to surveying consumer attitudes, the Travel Tax Institute is creating a database to track travel taxes in 50 U.S. destinations – from taxes on airfare and lodging to rental cars and restaurants. The database will also track the uses of these tax revenues, such as funding of destination marketing programs or contributions to the general fund. The database will be available to U.S. Travel members.
