Online travel companies to fully pay Schaumburg hotel tax

Schaumburg officials have amended the village's hotel/motel tax to ensure online travel companies such as Expedia and Orbitz pay the full tax on the price they sell rooms for, not only the price at which they bought the rooms.

But because village officials don't yet know how often such online companies are used to book hotel rooms in Schaumburg, they are not estimating a precise revenue increase for the fiscal year beginning May 1.

Nevertheless, they were already projecting a 3.8 percent increase during the year ahead - resulting in an annual collection of $3.7 million - based on the current health of the local hospitality market alone.

Schaumburg is home to 30 hotels.

For the 2018-19 budget, officials also had estimated an increase of 3.8 percent to a total collection of $3.5 million for the fiscal year. But with only a couple of weeks left in the year, the annual increase is now projected at 4.3 percent.

Schaumburg Communications Manager Allison Albrecht said the hotel tax is used to offset costs in the village's general fund, capital improvement fund, the Renaissance Hotel & Convention Center fund and one debt service fund. Any additional revenue from the broader application of the 8 percent tax isn't being earmarked for anything more specific, she added.

The basic purpose of the change is to close the gap in what online travel companies have been paying the village and ensuring the tax is being applied consistently to all sellers of Schaumburg hotel rooms, Albrecht said.

Officials further stated that the amendment reflects adaptation to the ever-changing way business is done in the hospitality industry.

Though Schaumburg and other municipalities did not prevail in a lawsuit filed in 2013 that sought back taxes from online travel companies, village officials said these same companies have committed to complying with local hotel/motel taxes in the future if language specifying their responsibility is included in a local ordinance.