Findings from a consumer survey published by the U.S. Travel Association’s Travel Tax Institute show that nearly half of all travelers are altering vacation plans due to high taxes.

Travel Tax Survey - Consumer reaction to high taxation levels; source - U.S. Travel Association

Ten percent of respondents said they decided not to visit a particular destination because of high taxes,  27 percent chose to book a less-expensive hotel, 26 percent decided to dine in less-expensive restaurants, and 24 percent had to make it an off-season trip.

Overall, 17 percent of leisure travelers said that travel taxes had a “significant” influence on their travel decisions, as compared to 8.5 percent for business travelers.

The three biggest problem areas for consumers are taxes on hotels, airfare and car rentals. A full 68 percent of travelers rated hotel taxes as very high or high, and 66 percent feel the same way about airfare.

The angst over car rental taxes (typically 20 percent) seems to be visceral, with 64 percent of respondents saying that the rate is “much more” than they expected to pay compared to other travel taxes.

Even a 1 percent increase in taxes on hotels, airfare or car rentals has a major impact, with 11.5 percent saying they would be less likely to book the hotel room while 17 percent would not book the car rental and 16.2 percent would not book the flight.

Travel Tax Impact on hotel, air and car rentals; source - U.S. Travel Association

A 10 percent tax hike would have more severe consequences:

- 63 percent would reduce the number of leisure trips that need a hotel stay

- 62 percent would reduce the number of travel nights

- 63 percent would look for another destination with lower taxes

- 52 percent would spend less on shopping and entertainment

- 47 percent would spend less on dining out

State-wise, California got fingered by 53 percent of consumers as the state that puts the largest tax burden on travelers, followed by New York (46 percent) and Hawaii (24 percent).

Image data and chart sourced from U.S. Travel Association. More info: Travel Tax Survey and Consumer Tax Study Summary

Related posts:
Latest New York Hotel Tax Creates Confusion, Anger
UK Travel Industry Disappointed by Tourism Policy Report
White Paper – Bleak Future of Travel & Tourism in Canada