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Hawaii Supreme Court Decision Welcome News for State’s Tourism Industry

March 19, 2015 Association No Comments Email Email

The Travel Technology Association (Travel Tech), the association for leaders in the online travel industry, released the following statement after Hawaii’s Supreme Court ruled decisively in favor of online travel companies (OTCs) today. The court affirmed an earlier Tax Appeal Court decision that OTCs are not hotels and thus the compensation they retain for their services is not subject to the Transient Accommodation Tax (TAT). The state’s highest court also ordered the state to refund to the OTCs the vast majority of the General Excise Tax (GET) and penalties the state had assessed.

“We applaud today’s confirmation and well-reasoned decision by the Hawaii Supreme Court that Hawaii hotel taxes do not apply to OTCs and the amount they charge for their online services,” said Travel Tech President Steve Shur. “As the state Supreme Court, and dozens of U.S. courts before it have recognized, online travel companies are not hotels, and therefore should not be paying hotel taxes.”

OTCs use innovative platforms and technologies to help drive travelers to the state, facilitating the booking of hundreds of thousands of room nights at Hawaii hotels each year. Hawaiian travel suppliers and tourism marketing organizations often partner with OTAs to drive tourism to the state, and Travel Tech members also spend millions each year marketing Hawaii destinations to tourists from around the world.

“When a consumer is planning that family vacation to Honolulu, or that anniversary getaway to Kauai, it’s OTCs they turn to in order to search, compare, and book the best travel options. We look forward to working with local officials and stakeholders to find innovative ways that our members can continue to help draw more visitors to Hawaii communities,” Shur concluded.

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