OTA’s To DMO’s about Taxes: “We’ve Done Nothing Wrong.”

E-Tourism Summit

  • Early bird discount for e-Tourism Summit ends June 30th.
  • OTAs Begin to Lose Hotel Tax Battles say: “We’ve Done Nothing Wrong
  • Using Social Media as a Customer Service Tool
  • Top Three Ways to Plan Marketing During A Recession:

Early Bird Discount 10th Anniversary of E-Tourism Summit ends June 30thThe 10th Annual E-Tourism Summit in New York is the one place that destinations and suppliers can go to meet the top experts in the field of online travel marketing.  Early bird discount ends June 30th.  Register now: http://www.thetouroperator.com/etourismsummit/registration.html

OTAs Begin to Lose Hotel Tax Battles say: “We’ve Done Nothing Wrong.” : In what seems to be developing into a trend in legal rulings, courts in Georgia and Washington have recently ordered online travel agency (OTA) Expedia to pay municipalities tax revenues based on hotel room prices charged consumers, not—as OTAs have been charging them—based on the wholesales prices that the OTAs pay hotel suppliers for the rooms.

• The Supreme Court of Georgia this month ruled against Expedia on the issue in a case involving the city of Columbia, Ga. The exact amount to be paid by the online giant will be determined by a trial court.

• A Washington State court last month ordered Expedia to pay more than $184 million in a consumer class action suit for breach of contract related to the company’s terms of use.

• Last February, OTAs were ordered to pay Anaheim, Calif. $21 million in hotel taxes.

The OTA take on this type of litigation and the outcome? According to an item in the Wall Street Journal, Art Sackler, executive director of the Interactive Travel Services Association, a trade group that represents OTAs, said while commenting on the Georgia case, that municipalities are reducing their own treasuries by litigating over the taxes when the companies have done nothing wrong. Said Sackler, “The courts effectively rolled up the welcome mat for an industry that really helps pump millions in to the Georgia economy.

Using Social Media as a Customer Service Tool. This is at its early stages for sure, but there are some companies that are already connecting customer service centers to networks, and I expect that these efforts will quickly reach a larger scale,” said Ian Jacobs, senior analyst for customer interaction technologies at Datamonitor. “The way to do that will be to link formal contact centers with those networks.” Jacobs, who is author of the report “The Rise of Social Networking and Emerging Channels in Customer Service,” says the current state of linking customer service with social networks is rudimentary at best. Social media monitoring tools such as Factiva, Nielsen Buzz Metrics, BoardReader, and dozens of others help automate social media conversation tracking.  Get Full story at: http://www.clickz.com/3634112

Top Three Ways to Plan Marketing During A Recession: Will lowering prices increase revenue?  According to the experts at PhoCusWright, lowering prices is more likely to reduce revenue than increase it unless there is substantial uncontested volume increase offset.  Top Three Ways to Plan During a Recession.  

Plan for each phase of the business cycle. All business cycles have the same pattern: recession followed by recovery followed by rebound.

1. Manage each phase in anticipation of the next one.     Manage discretionary costs during recession that do not overly inhibit the ability to exploit recovery when it comes.
– Manage the labor force in ways that support human capital pruning, development, cultivation and preparation for needed expansion when it occurs.
– Manage owner expectations for the near term, and position patience and loyalty for the long term.

2 .If you discount, do so carefully so you can preserve brand value and price opportunities when recovery comes. -With falling volumes and competitive environments, lowering prices is more likely to reduce revenue than increase it unless there is substantial uncontested volume increase offset.                                                                       – Reduce price in circumstances only where the percentage increase in volume will offset the percentage decrease in price. Even then, be conscious of covering variable costs, precipitating an unwanted price war, or thwarting future opportunities to raise prices.                                                                                               – Use opacity, value-add and packaging to obfuscate the actual dollar value of discounting and highlight unique service value.                                                                                                                                                                   – When discounting, reward the loyal customer rather than all customers.                                                                 – Negotiate shorter deals. Don’t lock in low prices you’ll regret later.

3. Do not over-allocate marketing budgets to promotion versus image advertising.  It is tempting in a recession, particularly a long one, to focus too much on promotional marketing with a measurable ROI, and financial managers can be persuaded more easily with measurable ROIs. Investment in image advertising is still needed, even if it’s at a temporarily lower level of spend. Shift to more measurable and tactical advertising in the short run, but not so much that your image and awareness take a hit in the long run


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