New Research: The Rising Price of Hotel Tax Compliance
Summary
A new report highlights the increasing complexity and cost of tax compliance in the lodging industry, including short-term rentals. Hosts are spending significant time on compliance, and many lack confidence in their methods. Consider exploring AI-powered tools to streamline tax processes and free up time for guest experience and growth.
Key Insights
- •Profit margins across the U.S. hotel industry were 4% below 2019 levels in June 2025, signaling continued challenges in an uncertain economic and geopolitical climate.
- •Nearly half of the respondents (44%) from the hotel sector reported that their approach to tax compliance still involves manual or semi-manual processes.
- •40% of hotel operators reported spending between 50 and 100 hours per year solely on trying to achieve and maintain compliance.
Action Items
- ✓Explore and implement the latest methods and technologies, such as AI-powered tools, to streamline and optimize tax compliance.Effort: mediumImpact: high
Tools & Resources
- →Checked In, Taxed Out: The report, “Checked In, Taxed Out: Benchmarking Tax Compliance in the U.S. Lodging Industry” is from Avalara.
Common Mistakes
- ⚠Hotels that continue to rely on manual or outdated methods are sacrificing time, agility, and a critical competitive advantage.
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