Lawsuit with Expedia.com costs Columbus hotels, owners lament: Hotelier presents council with study assessing losses

Sep 24, 2009 (Columbus Ledger-Enquirer - McClatchy-Tribune Information Services via COMTEX) -- ROOM | Quote | Chart | News | PowerRating -- Some hotels in Columbus are losing money because they are not marketed by online travel services, the manager of four hotels told Columbus Council.

Hotels in Columbus have been delisted by Expedia.com, Hotels.com and other travel Web sites since the city filed a lawsuit over the services charging customers a higher rate for booking a room while paying the city a lodging tax based on a cheaper, wholesale room rate. Travelers using online services are directed to hotels in LaGrange in Georgia and Phenix City, Auburn and Opelika in Alabama.

"If the city doesn't think it's costing, why are they in a lawsuit?" Tracy Sayers asked Wednesday, a day after he presented to council the results of a study commissioned by Pezold Management. Sayers manages four hotels, including the Marriott Columbus Hotel downtown.

The study, compiled by two Columbus State University professors at the D. Abbott Turner School of Business, shows that Columbus has lost $9.3 million in the last fiscal year in room sales and another $1.3 million in sales tax. Daily sales tax lost is $5,308. The study noted the daily losses in sales tax will never be recovered and result in an annual loss of $1.9 million.

Peter Bowden, president and chief executive officer of the Columbus Convention & Visitors Bureau, said the city has 4,582 hotel rooms. People in the industry have said the city is losing some leisure travelers. "We have folks to say we were losing some business," Bowden said. "Some of this business is being lost but they can't really give us a definite answer."

Based on a two-year trend and the economy in Columbus, Bowden said the city is still holding its own.

For fiscal years 2007 and 2008, visitors to Columbus totaled 1.1 million each year and had an economic impact of $378 million in 2008, up from $371 million in 2007.

In June, the Georgia Supreme Court sided with the city in its lawsuit against Expedia.com. The city is waiting for the court to hear a similar suit against Hotels.com.

Sayers said the Columbus hotels have been delisted since 2008.

City Attorney Clifton Fay said the city wants to get the lawsuits resolved and local hotels listed again. The Expedia.com case goes back to Superior Court, where attorney Trip Tomlinson of Pope, McGlamry, Kilpatrick, Morrison and Norwood in Columbus, will represent the city.

"We'll try to hammer out a remedy to pay the hotel taxes due the city and working out a method to pay the correct amount in the future," Fay said.

Tomlinson said he is as concerned as anybody in getting the hotels listed again. He has encouraged the hoteliers to exercise all rights to get them relisted.

"They have their own ability to enforce an agreement," Tomlinson said. "The bottom line is we are all headed to the same place, trying to get all the tax. Hotels deserve all the marketing they can get and hotels deserve to be relisted."

Councilors are directed by the city charter to collect all the taxes owed to the city. The question from Sayers puts councilors in a dilemma.

Councilor Glenn Davis, part owner of Hilton Garden Inn in Columbus, said based on the information available, he didn't think there is an impact on local hotels. "As a councilor, I have to struggle if we know delinquent taxes are due to the city and the court decides that is the case, we have to make sure that is collected," Davis said.

Davis said he thought the problem centered more on a supply issue than shift in occupancy from one geographic area to another.

Tomlinson said the questions should be directed to the online services.

"I very much understand the concerns of hoteliers," Tomlinson said. "But I believe the frustrations should be directed at these companies and not the city. The city is doing its best to enforce the law. I think the Expedias of the world are the ones to ask the hard questions."

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