Monday, March 9, 2009

Tourists and TOT

Why the Disney Resort is....well, the Disney Resort.....

I was over at the Disneyland Hotel for breakfast with friends (Gustavo would find my choices pedestrian, but I starved for 2 weeks to get away with the 2 by 4 breakfast at Steakhouse 55).

As I was leaving, I noticed the usual gaggle of tourist girls taking each others' photos in front of our favorite mouse. While you can see the barriers indicating that work is being done in the area, what you cannot see is the Resort "Cast Member" maintenance guy, who is crouching down behind the base block, so as not to intrude on the "guest experience". After literally crawling on his hands and knees to get himself out of the shot, he then stopped his work, and offered to take their photos together. He later went back to work, grabbing a wrench from his toolkit, whistling quietly. Sorry, folks, but NOBODY else does it as well. Which is why, despite the downturn in the economy, while the crowds are not as robust as they may have been in years past, folks are still using whatever extra money they have to visit us in Anaheim. And while TOT revenue is off from previous years, thank God we have what we do, because without it we would be in BIG trouble!

Speaking of TOT tax, I am looking into the whole stink about online booking agencies and their payments of TOT to the City of Anaheim. While we have a full Council majority backing the move to collect the extra TOT from the agencies, I am not so sure I am in agreement. (Cynthia is going to disagree with Mayor Curt?! gasp!) Yeah, I just might.

Here's the spin:

Council claims that agencies that book discount tickets (Expedia, Orbitz, etc) buy blocks of rooms wholesale, and then resell them at a profit, while withholding the TOT collected at the higher price. Confused? Here's a hypothetical example: Agency A buys a block of rooms from a hotel at $100 per room, sells to Family B at $200 per room, collects TOT on the $200 from Family B, but only gives the City the TOT on the $100 Agency A paid. Now, if that is in fact the scenario, then yes, Agency A needs to forward all TOT collected back to the City. That is only fair.

However, I have also heard that the agencies are not in fact collecting and not forwarding. The alternate scenario is that they are only collecting TOT from Family B based on the lower price that Agency A bought the room for. If the battle is raging over forcing agencies to collect more taxes from the consumer, I am not sure that is the way to go. Charging tourists even more money in this economy may not be the smart move, and frankly the agencies are lit about it. In fact, in other markets where City governments have forced the TOT issue, agencies have simply rerouted guests to neighboring cities! (can you say Garden Grove?) How much TOT does Anaheim collect on a Garden Grove hotel room? That would be none.

There is no easy answer here, and I still do not have all of the answers. But I am looking into it, and will report back here when i get those numbers. Any ideas from the peanut gallery?

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