Consider Travel Taxes When Managing Meetings Outlay

Death and taxes. Ben Franklin was right-on the money when he said that these were the only certainties in life. But while we may not have a say in how the former plays out, we can certainly exercise some control over the latter--especially the ubiquitous and seemingly ever-increasing taxes we pay for traveling on business or meetings. You may not be able to actually escape paying municipal taxes on hotel rooms, car rentals and meals, but as a meetings or purchasing manager, you can certainly limit tax spending by carefully choosing where that money is spent.

I propose this because of a recently released study by the National Business Travel Association (NBTA) Foundation and Concur that revealed both the highest and lowest travel taxes in top U.S. cities. This is the kind of information that you can easily refer to when making decisions about where to hold your next event. The study looked at total daily tax rates -- which include general sales taxes plus "discriminatory" travel levies, such as those imposed on services like hotel rooms and rental cars and paid by end-users.

Among the highest taxes in the nation:

-Chicago ($40.99)
-Seattle ($37.95)
-Dallas ($37.26)
-San Antonio ($37.20)

Among the lowest:

-Portland, OR ($21.49)
-Detroit ($22.37)
-Honolulu ($22.55)
-Ft. Meyers, FL ($22.91)             

Ironically, while cities this year have been hiking travel taxes to make up for revenue shortfalls, a story in USA Today about the report says travelers this year paid slightly less travel taxes from 2008, as the cost of travel overall has fallen.  But as recovery sprouts, and taxes continue to rise, how long do you think this little respite will last? 

What to do with this information? Rates on sleeping and meeting rooms, F&B, ground transportation and other meeting elements figure heavily into the mix of decisions you and your planners make on where to hold events. If you've got some sway with suppliers, you can use that leverage to reduce your costs. But you also have options when it comes to travel taxes. When considering locations for events, why not also look at cities where tax rates are relatively low to determine where the best bargains are? In other words, make travel taxes a bigger part of your decision-making process. Meeting planning software can help, too, with information from tax summary reports.

Who knows, perhaps if enough companies and organizations switch their events to lower-taxed cities, municipalities with high rates will take notice of the shift and cut discriminatory taxes to attract meetings attendees back? Remember when New York City's hotel room taxes were so onerous that it caused a backlash from travel professionals? When business was diverted from the Big Apple, the city reduced taxes. In our world of supply and demand, this strategy has worked before – as I’ve always said, nothing gets more attention from a supplier than a negative change in corporate market share or revenues. 

Kevin Iwamoto is vice president of enterprise strategy at StarCite. This post is syndicated from his blog, Strategic Meetings Management.