Agoda Travel Operations USA
Agoda Travel Operations USA Inc. (“Agoda”) is an online hotel and flight reservation website and a brand of The Priceline Group — the world’s largest online travel business. Agoda enables its 18 million customers to book at over one million hotels around the globe in 38 languages. With over 900 employees in seven countries, Agoda’s Customer Experience Group is responsible for providing travel assistance to Agoda’s customers. Agoda proposes to open its first U.S.-based Customer Experience Group office in Providence.
Agoda is proposing to establish a new Customer Experience Group office in Rhode Island, reaching 200 new jobs by 2018. The new Agoda operation will consist of approximately 25,000 square feet in downtown Providence, and the 200 new full-time jobs will command an estimated median annual salary of approximately $39,500 for Customer Experience Group agents, managers, and other support functions. The project, in total, will require an estimated $5.1 million investment to fit-out and equip the space.
The Rhode Island Commerce Corporation is recommending that its board award Agoda incentives under the Qualified Jobs Incentive Tax Credit Program and the Rebuild Rhode Island Tax Credit Program.
- Agoda expects to occupy approximately 25,000 square feet at 500 Exchange Street in downtown Providence.
- The corporation has negotiated an incentive package to Agoda with an estimated value of approximately $4.1 million, consisting of Qualified Jobs Incentive Tax Credits and Rebuild Rhode Island Tax Credits.
- Based on current salary estimates, Agoda would be eligible for annual Qualified Jobs Incentive Tax Credits of approximately $303,939 starting in 2018, when all 200 full-time positions are projected to be filled. The value of this incentive is derived entirely from the personal income taxes that would not otherwise occur in Rhode Island but for Agoda’s decision to locate its expansion in Providence. The recommended term of the tax incentive agreement is 10 years, for which Agoda will commit to maintaining the new jobs in Rhode Island for at least 12 years, as required by state statute. The total value of the credits is anticipated to be approximately $3 million based on the projected hiring schedule.
- Based on current project estimates, the proposed project would be eligible for Rebuild Rhode Island Tax Credits of $1,018,374, payable over five annual disbursements after the company has begun operations, and which would be reduced dollar-for-dollar by a sales tax exemption under the Rebuild program, which is estimated to be approximately $117,846. Tax credits distribution is contingent upon actual project costs and the company achieving its hiring commitments under the Qualified Jobs Tax Credit program.
- Based on a third-party analysis, direct and indirect economic and fiscal benefits of the proposed project include increased annual state GDP in 2018 of $19.5 million, related to 32 construction and 311 ongoing direct and indirect jobs created, and increased personal income, as well as sales and business corporation tax revenues during the construction phase and ongoing operations over the 12 years of the agreement, with a combined estimated value of approximately $7.4 million.
Economic Impact Analysis
Providence Journal: “RI Commerce OKs $9.1 million in tax credits to 2 companies, development project”
Providence Business News: “Commerce Corp. approves up to $9.1M in incentives”