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Capitol Gains

AH&LA, AAHOA Continue To Drive Progress For Industry On Legislative Front

Monday, June 19, 2017
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Tax reform, OTA’s and labor challenges were among the key issues discussed recently by three influential hospitality leaders, all of whom also urged continued participation from hoteliers on Capitol Hill to enact positive change for the industry.

The “Industry Association Update” was held during the NYU Conference earlier this month and featured Katherine Lugar, President and CEO, American Hotel & Lodging Association (AH&LA); Chip Rogers, President and CEO, Asian American Hotel Owners Association (AAHOA); and Katie Fallon, global head of corporate affairs for Hilton.

Lugar noted the AH&LA has been focused on the impact of Online Travel Agencies (OTA’s) and the need for transparency. She referenced a recent AH&LA poll in which some 75 percent of consumers “don’t realize when they go to any number of OTA websites that they actually roll up into the same two companies. Consumers want choice and they also want transparency in that choice so understanding that is important,” she said.

Lugar added there is another area of focus around transparency. “We are seeing alarming increases in individuals who believe, or are led to believe, that they are booking directly with the hotel only to find out that they booked through a third-party when that wasn’t their intent. They show up at the hotel front desk believing that they have a certain kind of reservation, or a reservation at all, or they believe that they’re getting their loyalty points, again only to be disappointed,” she said, adding that number has grown from 6 percent in recent years to some 22 percent today, or roughly 50 million bookings.

Lugar continued, “that’s a real problem. We are working closely with the FTC in the House and the Senate where bills are moving to make sure that our customers have clear disclosure and they know who they’re doing business with and that they’re making informed choices.”

Rogers, for his part, drilled down on taxation, which he described as “a real opportunity for us.” Rogers emphasized that the short-term impact from the last time the U.S. saw major tax reform—which was in 1986—was a decline in commercial real estate values by some 16 percent.

“So we’ve got to have a seat at the table this particular time around, realizing that if we can bring these rates down from 40 percent to 15 percent as the President is asking for; or 20 percent as Congress is asking for; anywhere in between there is absolutely great. If we can get rid of the death tax that is being talked about, that’s great. So there are a lot of good things. We’ve got be very careful that what happened in 1986 with commercial real estate doesn’t necessarily happen again so being at the table and being involved in tax reform is critically important,” he said.

He added that within tax reform the 1031 Like-Kind Exchange is critical as well. “Unfortunately in the last Congress, Republicans, Democrats and the President all suggested we get rid of it. For all of them to come together and agree on getting rid of something in the tax code—and it’s something that we want to keep—that’s very dangerous,” he said.

Rogers reinforced why tax reform, in general, is a top priority. “What happens in the next nine months could be with us for the next 30 years,” he maintained.

Meanwhile, Fallon—whose political experience includes a tenure working for President Obama—offered her perspective, specifically on spending as it relates to infrastructure. “I am hopeful about infrastructure. I do see the opportunity for a bipartisan compromise around infrastructure, whether or not its coupled with tax reform or not I think is a debatable question…I do think that for years Democrats in Congress have been arguing that prioritization of infrastructure investments are vitally important for economic recovery, so I am optimistic that something will come together on infrastructure investments.”

Lugar and Rogers both underscored the importance of enhancing job opportunities within the hospitality ranks.

“Whether it’s youth apprenticeship, pathways to life long careers, this is such an important part of our world and the business of people taking care of people and our commitment to it remains extraordinarily high. We’ll see lot of exciting initiatives to come,” said Lugar.

Rogers added, “labor is absolutely critical, but we’ve got a much different perspective now with the [current] administration than we did a year ago. We’re not necessarily fighting joint employer as we were having to fight the National Labor Relations Board (NLRB) just a few months ago. The idea of extreme wages is happening at the local level so we’re still fighting that.”

Lugar emphasized the importance of political engagement and charted the industry’s progress on Capitol Hill in recent years, specifically as it relates to hotel PACs.

“When I started three years ago we were in the bottom third of all Political Action Committees (PACs). Today with the great support of folks in this room we’re in the top 5 percent of all PACs. It’s been pivotal in making sure that we have a seat at the table in making sure that our voice is heard and that we’re building strong supporters on both sides of the aisle,” she insisted.
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