Financial Matters From the WNAV Office Lodging Tax Marketing Your Vacation Rental

Preparing for the Proposed Lodging Tax. Part I: Notifying your past guests

Written by Elizabeth Weedon
5/5 - (4 votes)

Given the likelihood that Massachusetts will pass a Lodging Tax bill soon, many homeowners are wondering how to proceed with their bookings in the meantime. Should they inform their past guests about the tax? If so, how and when?  Should they price their homes any differently given this significant new tax? Should homeowners absorb some or all of the tax themselves rather than pass it all along to their guests?

We will address the issues of pricing in a future post, but here are some suggestions about contacting your past guests to inform them about the proposed tax.

Reaching out to your past guests – and even anyone who may have inquired about your home recently – is a courtesy to let them know that any lease signed prior to the passing of the tax would not have to include a tax, even if the date of the tenancy or collection of the funds occurs after the passing of the tax bill. So if your guests are planning to return to the Cape or Islands next season, they might want to consider booking earlier than usual to avoid the tax.

How do we recommend you inform your guests?

Here’s sample template of an email you could send:

Subject line: Have you made your 2019 vacation plans yet?

Dear [past guest],

We so enjoyed having you and your family stay at our home last summer. We are writing to let you know that our rental availability and prices for 2019 are now posted online, and we are taking reservations for the upcoming season.

You may not be aware that Massachusetts will likely be passing a Lodging Tax bill this winter assessing rental home vacationers a tax of up to 14.45%.  Any contracts that are signed prior to the passing of the bill would be exempt from this tax.  So, it would be in your best interests to book your rental home before the bill passes in order to avoid having to pay the tax.

Feel free to call or email us if you have any questions or would like us to reserve a particular week for you.

When should you contact your guests?

Don’t wait! Now that it’s likely that a bill will be passed within the next week, the sooner you inform your guests, the better.  Any leases signed prior to January 1, 2019, would be exempt.

How can you respond to their objections or concerns?

Keep in mind that it’s unlikely that vacationers already know about the proposed Lodging Tax bill, especially if they do not live in Massachusetts. So be prepared for their reaction.

Tell your guests that Massachusetts is the last state in New England to impose a lodging tax, and that it’s similar to what visitors to hotels and inns have had to pay for many years.  Let them know that 2.75% of the tax is for wastewater management – addressing a dire need to protect the fragile ecosystem and beauty of this region that is so dear to all of us.

The bottom line:  the sooner you inform your guests about the tax and confirm your bookings for next season, the better the odds are they won’t have to pay the tax for the upcoming season.

Read our post about the impact of the Lodging Tax on your pricing for next season.

For more information about the proposed Lodging Tax bill, see our Lodging Tax FAQ’s post.

About the author

Elizabeth Weedon

Elizabeth Weedon - Although I’ve worked for since 2008, I’ve been a loyal homeowner on the site since early 1998, just a few months after the website was launched by the Talmadges. I grew up summering on the Vineyard and managed my family's rental home there since the mid-1980’s. I’m passionately devoted to the Vineyard – and to WeNeedaVacation, which I credit with enabling me to hold onto the special property that has been in our family for nearly a century. An enthusiastic member of the WNAV Homeowner Support Team, I endeavor to keep my finger on the pulse of the Cape and Islands vacation rental industry so that I can provide homeowners advice about how to ensure their booking success with us. With owner Joan Talmadge, I am also responsible for editing and writing much of the text on our website, our monthly newsletters, and Homeowner Blog posts.