After nearly a year of staying at home, stir crazy Americans are ready to safely travel again. The pandemic has caused travelers to prioritize locations that accommodate social distancing, with a recent Vrbo study finding that 61 percent of families are more likely to visit an outdoorsy destination than an urban one – making Montana’s mountains, rustic small towns, and wide open spaces the perfect destination.
Unfortunately, Senator Jason Ellsworth has proposed a bill that would introduce taxes on travel agents at a time of unprecedented suffering in the travel industry. New taxes on travel are not the answer to Montana’s economic woes. Now that vaccines are being distributed and the country is making progress in handling Coronavirus outbreaks, travel and tourism will be key to jumpstarting Montana’s economy, and the state can leverage its status as an outdoor paradise to attract travelers.
And with 33,810 travel and tourism jobs in Montana, lawmakers have plenty of reasons to oppose new travel taxes.
Travel agents are critical to fostering in-state travel and helping out of state tourists plan their trip to Montana, generating significant economic activity for Montana. New taxes like the ones proposed in Senate Bill 52 are shortsighted and counterproductive.
The travel and tourism industry is essential to the United States’ and Montana’s economy. The U.S. Travel Association estimates that 1 out of 10 American jobs depend on travel and tourism, and it is among the top 10 industries for employment in 49 states and D.C. – ranking 4th in Montana.
When travelers are interested in booking a trip, they turn to online travel agents such as Orbitz, Expedia, Priceline, and Travelocity, which provide options to book flights, lodging, car rentals, or activities. These sites are responsible for hundreds of thousands of bookings in Montana annually, and operate much like Montana travel agents. They help consumers make bookings for trips and then charge a small travel agent fee for the service. The same applies to short term rental platforms. These platforms make planning and traveling to Montana easier and more convenient.
Senate Bill 52 would tax those travel agent fees, making Montana destinations more expensive for its own citizens traveling in-state and for out of state visitors. Further, for Montana hotels, inns, bed and breakfasts and other lodging establishments that partner with online travel agents, this new tax on agents could make distribution more costly – at a time when the accommodations sector is already suffering.
New taxes that increase travel costs will deter visitors and make Montana residents travel to other states, forcing the state to miss out on recovering some of the $4.9 billion spent by tourists in Montana prior to the pandemic. This new tax will also put Montana’s recovery behind other states, and the state will not realize the tax windfall of travel demand when our nation turns the corner on the pandemic and begins to see economic spending approach pre-pandemic levels.
Although this tax is intended to hurt only Montana and online travel agents, its consequences will cause a ripple effect and harm businesses throughout the state. Fewer tourists means less business for restaurants, shops, hotels, and attractions that bring tourists to Montana. And now is not the time to burden critical businesses that are already suffering. From exploring the wonders of Glacier National Park to driving the Beartooth Highway to skiing Big Sky, Montana has many wonderful offerings for residents and out of state guests to experience.
We strongly urge lawmakers to oppose Senate Bill 52 and work to grow travel and tourism to support Montana’s economy. After almost a year of unprecedented hardship, imposing new taxes on Montana tourism will only serve to impede the recovery we are all anxiously anticipating.
Steve Shur is president of the Travel Technology Association