Dear AAHOA Member,   Recently, many hotel owners in San Diego received letters from the City Treasurer's Office about potential outstanding Transient Occupancy Tax (TOT) and Tourism Marketing District (TMD) assessments based on rate parity amounts for reservations booked through Expedia. It has been reported that the City of San Diego reached a settlement agreement with Expedia, in which Expedia has agreed to pay some - but not all - of the outstanding TOT and TMD assessments. The City is now looking to the local hotels to assist with obtaining the remaining assessments.     The City of San Diego’s Proposed Settlement Offer: 4 Things You Need to Know The City is offering a proposed settlement option for hotels with alleged unresolved or outstanding TOT and TMD liabilities arising from these Expedia transactions. To participate, hotels that received the notice directly from the City must grant the City permission to access data from Expedia by completing, scanning, and emailing the hotel’s Records Consent Letter (see p. 2 of the linked document) to the City of San Diego at SDRevenueAudit@sandiego.gov. The DEADLINE to respond is currently July 31, 2024. We are in regular communication with the City, and the City is accommodating the concerns of the industry as issues arise. If you sign the Records Consent Letter, the City will use the Expedia data to calculate any unpaid TOT and TMD assessments for the period from January 1, 2017, to December 31, 2023. However, after obtaining the data, the City has committed to following up with a proposed settlement amount.  In discussions with the City, the San Diego County Lodging Association (SDCLA) has advocated for a narrow look-back period of only three (3) years, rather than the initial assessment of seven (7) years, to reduce the overall liability of the hotels as a compromise to the claims. Why it Matters   IF YOU SIGN BY JULY 31, 2024: If you sign the Records Consent Letter sent to your hotel, the City’s proposed offer may save you money, depending upon your specific circumstances. The City has agreed to assist hoteliers by offering a proposed settlement amount.      IF YOU DO NOT SIGN BY JULY 31, 2024: If you decide not to participate in this proposal, the City has asserted that it will determine actual outstanding TOT and TMD amounts through its routine audit process – but with no reduction for the 7-year period ranging from January 1, 2017, to December 31, 2023.  IMPORTANT NOTE: By signing the Records Consent Letter, you are granting Expedia permission to provide the transaction data for your hotel to the City so it can more accurately determine the alleged outstanding TOT and TMD assessments.     Indemnification Clauses: In some of the contracts with Expedia, both with the Brands and the individual owners, there is an “indemnification” clause that would require Expedia to be responsible for all outstanding assessments. Please review your contract and/or consult with your Brand to see if your agreement contains an indemnification clause.     Either way, it is crucial to understand the implications of this proposal and how it might affect your business's bottom line. All hoteliers are advised to promptly seek advice from your local attorney or other qualified legal professional.   Legal Disclaimer: The information provided in this Joint Member Alert is for educational purposes only and is not intended to constitute legal advice or representation of any kind. Each hotelier's situation may vary, and the legal implications of the City’s settlement offer will depend on your individual circumstances. Therefore, we strongly recommend you consult with an attorney to assess how this issue might impact your hotel. Consulting with a qualified attorney can help ensure you receive personalized advice tailored to your specific situation.   What Is Being Done to Address this New Development   AAHOA, SDCLA (San Diego County Lodging Association), and CHLA (California Hotel & Lodging Association), are actively advocating for equitable outcomes for our members. We are highlighting the advantages and disadvantages that this proposal poses to hoteliers and proposing policies to reduce tax burdens on our industry.   If you have any questions or would like to speak to someone about this matter, please do not hesitate to reach out to SDCLA Executive Director Fred Tayco at fred@lodgingsd.com, or Darshan Patel, Esq. at Dpatel@dpalaw.com / cell: 619-851-4894. ________________________________________ We extend our gratitude to Neil Bhakta, AAHOA South Pacific Regional Director, for promptly informing AAHOA’s government affairs team upon receiving notification of this issue. Neil swiftly initiated phone calls, sent emails, and participated in conference calls in response.   We will continue to keep you updated on any developments. Please do not hesitate to contact us if you have any questions or concerns.