Just two weeks after New York Governor David Patterson signed a bill that makes it illegal to rent condo and apartments out for less than one month, the state passed a measure that will tax hotel booking agents such as Expedia and Orbitz on any rooms reserved through the sites (as well as more traditional travel agencies).
Currently, those third-party sites operate through a bit of a loophole. Companies like Expedia purchase rooms from hotels, then sell them at a higher price that already factors in the state tax – but the government collects no money on the difference between the two rates. The new legislation, which kicks in September 1, gets rid of the loophole and could pull in a whopping $10 million in just a year.
The worry, of course, is that booking agents will pass on those price hikes to tourists and discourage visitors from traveling. It’s a valid concern, given that the average price on hotel rooms in New York City hovers around $200 a night, and travelers could easily opt to bunk in nearby Connecticut or New Jersey instead.
Either way, we don’t expect New York’s allure to die down any time soon. Just try and book that room before September rolls around.