Wednesday, July 29, 2009

Who Really Wins in the Cities/Towns vs OTAs? Lawyers!

No matter where you stand on the current battle(s) between the Online Travel Agencies (OTAs) and the various municipalities who are currently suing them over occupancy taxes, you'll probably have to agree that the outcome reported today in the Madison Record (a weekly legal journal covering the Madison County, IL courts) is not a good one.

Some great reporting from this unlikely source reveals that nearly 80% of a recent case settlement by the fair city of Fairview Heights, IL against eight OTAs went to the lawyers who handled the case. The settlement for Fairview Heights was $315,000 of which the attorneys collected $227,000 plus another $31,0000 in expenses.

This isnt meant to be an anti-lawyer tirade (Indeed, the lawyers in this case only billed at about $50 an hour in total) but a concern about who really wins in these cases. We don't yet have the answer, but a situation where the OTAs cough up all sorts of money and most of it goes to pay legal bills rather than to the cities (where mayors and city council members are claiming that all this money will be used for the benefits of their citizenry) is hardly a good outcome for anyone.


  1. 227k+31k of 315k total--wow! I picked the wrong profession :)

  2. There is a lot more to it than just the settlement. In addition to the one-time payout there is also the long-term effect. Sure, the attorneys took most of the initial cash, but the city will do just fine over the days, weeks and months to come.