Arlington Heights Joins Class Action Lawsuit Against Online Travel Companies

Arlington Heights is the latest municipality to sign onto a class action lawsuit that will attempt to gain back potentially thousands of dollars lost in hotel taxes in cases where travel companies book hotel rooms online for customers.  

Other Illinois municipalities already involved include Des Plaines, Tinley Park, Burr Ridge, Orland Park, Oak Lawn and Oak Brook Terrace, in addition to Warrenville, Rockford, Bedford Park, Willowbrook and Orland Hills.

Arlington Heights Finance Director Tom Kuehne said taking into account that 15 to 30 percent of reservations for hotel rooms are made through online travel companies, and that those companies are purchasing the rooms at roughly 40 percent of the retail rate, the village could be due between $60,000 to $100,000 in potentially lost revenue over the last ten years.

Kuehne did add that those details are assumptions based on expected hotel tax revenue to the village and other statistical information available.

Though it could take years to recoup the revenue, Kuehne said the vote by the Arlington Heights Committee of the Whole carries no risk.

“By banding together with other villages, there is an economy of scale in sharing costs,” Kuehne said. “There are no up front legal fees, and the lawyers on this case are working on a contingent-fee basis; if they lose, we owe them nothing. If they win, Arlington Heights and the other involved municipalities will pay a percentage to them.”

Kuehne said the village is expecting approximately $940,000 in hotel tax revenue receipts this year.  

According to the Daily Herald, Schaumburg, Itasca and Lombard will also consider joining the lawsuit in the coming weeks, and similar lawsuits in Wyoming, South Carolina, Georgia and Missouri have already been successful.