Wednesday, March 21, 2007

Taxes, we dont see no stinkin' taxes 2

Enjoyed this week's guest post from Mike Potts and wanted to add my two cents to the taxes debate. Read that post first before reading this.

Mike mentioned that there are two forces a work - Legality and Profit. I also think there is a third force - Complexity.

In some cases it is genuinely very hard to keep track of variable tax regimes all around Europe especially when they vary within a country. I do not excuse those sites that use this complexity to and deliberately hide the taxes to under-quote fares but at the same time I think the authorities should take some of the blame for the scale of the problem. For example there are a number of towns across France charging city taxes of around a Euro or so a night. Taxes that go up and down without warning. This complexity particularly hits those sites that have developed simple one size fits all extranet approaches (ie, RatesToGo, Wotif) because the algorithms needed to cover every city and every country would require a team for 5 to update and manage. It especially hits those companies that have a full or part pay on check out model (ie and RatesToGo) as it is on the hotel to make the final determination and enforcement - the customer service impacts of making a mistake are enormous.

That all said - I agree with Mike that it a consumer protection dark zone where most countries force airlines to put all the taxes and charges into advertisements for fares but hotels and hotel intermediaries are free to hide the final price. The intermediaries need to be as up front as they possibly can about taxes as soon as they can and not use any problems associated with complexity as a false price competitive advantage and the EU needs to do something useful and (best case) standardise some of this across Europe or (achievable case) put out a definitive guide for intermediaries to hotel taxes.

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