May 11, 2021

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Just Do Travel

Texas House Committee Advance Bill to Tax Travel Agent Bookings

2 min read

As the travel industry looks to rebound from COVIC restrictions, Texas lawmakers have quietly advanced a bill that would tax the use of travel agencies, whether online or brick-and-mortar.

Grover Norquist with Americans for Tax Reform says HB 2889 would be an additional cost passed onto consumers.

“If you go to a hotel and you go through an online travel agency, you’ll pay an additional fee,” he says. “It’s a new additional tax and it will make it more expensive for people to go to hotels.”

“Hotels and restaurants have really been hit hard by COVID and the pandemic.”

The America Society of Travel Advisors also opposes HB 2889.

In a statement, ASTA’s Eben Peck said that, with the average agency business down more than 80% in 2020 when compared to 2019, “now is the worst possible time to be raising taxes on the travel agency sector.”

“Even factoring in the relief programs created by the federal CARES Act and successor legislation, the average travel agency has laid off close to 60 percent of its staff. Given that context, we question the wisdom of the Texas Legislature considering any form of a tax increase on this decimated industry at this moment in time,” he said.

“Over 45% of advisors who booked hotel rooms for clients in 2019 charged a fee, Peck said, and 42% charged a fee for air, hotel, and car package bookings. Those “agencies, the vast majority of whom are small businesses, would be caught up in this legislation” Peck said.

Norquist says lt. Gov. Dan Patrick shot down a similar measure last session, and hopes he’ll do it again this year.

“The people you’re damaging are not just consumers, but people who run hotels and motels that have such a hard time during the pandemic,” he says. “Now is not the time to pass a travel tax on top of all the other taxes we have.”