Newport may sue online travel companies

The Newport Beach City Council will meet privately with attorneys Tuesday to decide whether the city should sue online travel-booking companies to recover allegedly bilked tax money.

The city may join a Los Angeles officials’ suit that accuses more than a dozen companies, including Travelocity and Expedia, of charging exorbitant rates for bookings and pocketing the extra money.

Guests who book hotel rooms online pay local transient occupancy taxes based on an inflated price, but the tax that cities and hotels receive is based on a lower rate, according to information from the League of California Cities.

Cities including San Antonio, Chicago, Philadelphia and Atlanta have already filed similar lawsuits. The San Diego City Attorney’s office sued a dozen such online booking companies in 2006, including Hotels.com and Priceline.com, alleging the city had lost more than $30 million in taxes over five years.

BRIANNA BAILEY may be reached at (714) 966-4625 or at brianna.bailey@latimes.com.