Will Georgia’s online travel ruling cause uptick in prices?

Millions of Americans go online to kick-start their travel adventures each year, clicking on websites like Expedia, Travelocity and Orbitz to book hotels and flights or make other travel-related reservations. I know we always check online first when we’re looking for low airfares or reduced hotel rates.

Generally, online travel companies reserve blocks of hotel rooms or air tickets at drastically-reduced rates, then sell those rooms or tickets online for a profit. Those marked-up rates are still a good deal for the online consumer.

This week, however, the Georgia Supreme Court ruled that Expedia’s practice of collecting hotel occupancy taxes solely on the reduced rate it gets from the hotel is shortchanging the city of Columbus in tax revenue. The city argued that Expedia should be collecting the hotel tax based on the retail price it charges travelers when they book the rooms.

The 4-3 decision didn’t say whether online travel companies would owe back taxes to Columbus, but it did rule that Expedia must now collect (and pass along to the city) hotel occupancy taxes based on the rate the consumers pay the online travel site.

Columbus, like Atlanta, has a hotel occupancy tax of 7 percent, which could mean millions more in tax revenues as a result of the Georgia Supreme Court decision. The city of Atlanta last year also filed lawsuits against 17 online reservation companies to recover hotel tax dollars; and a federal class-action lawsuit on behalf of Georgia cities is pending in Rome, Ga.

So what does this mean to the average traveler who uses online sites to make reservations?

Well, if the Columbus ruling helps other suits in Georgia and throughout the country, it could mean travelers might pay higher prices to the online travel companies. Or, it could mean the travel companies will begin to “delist” more and more destinations. Expedia has already stopped listing Columbus hotels on its site, opting instead to offer deals at hotels in nearby Phenix City, Ala.

How often do you use online travel sites? Would the deals still be worth it to you if online reservation prices are raised to cover the increase in collected hotel occupancy taxes? In border cities like Columbus, Ga., would you choose to stay across the state line in Alabama for the lower rate? Or would you rather stay in your chosen destination city despite the higher room rate and taxes? Do you think the ruling will cause a noticeable increase in online travel prices?

• ATLANTA TRAVELERS BLOG CONTEST
• Share your horror stories and win a grand prize.

• Atlanta, be here now. Check out ajc.com/travel