Hotel Margins Are Shrinking — Tax Compliance Is Part of the Problem
Summary
A new report from Avalara reveals hotel profit margins are struggling, down 4% from 2019 levels, with tax compliance a significant issue. The study shows that 40% of hotel operators spend 50-100 hours annually on compliance, yet nearly half are only "somewhat confident." Explore automating tax processes to save time and boost guest experience.
Key Insights
- •40% of hotel operators spend between 50 and 100 hours per year on tax compliance.
- •Profit margins in the U.S. hotel industry were 4% below 2019 levels as of June 2025.
- •Nearly half (44%) of hotel operators use manual or semi-manual processes for tax compliance, despite hesitancy towards new technologies.
Action Items
- ✓Hosts should evaluate their current tax compliance processes and consider automating where possible, to save time and potentially reduce costs.Effort: mediumImpact: medium
Tools & Resources
- →Checked In, Taxed Out: Benchmarking Tax Compliance in the U.S. Lodging Industry: The article mentions a report from Avalara, "Checked In, Taxed Out: Benchmarking Tax Compliance in the U.S. Lodging Industry".
Common Mistakes
- ⚠Hotels that continue to rely on manual or outdated methods are sacrificing time and a critical competitive advantage.
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