Friday, June 24, 2011

Economic Task Force Report-Hotel Tax

One of the recommendations coming out of the task force report to finance some of its suggestions is a tourism levy on hotel rooms.

Most people including myself, because we do not pay attention to the list of charges that are added on to your hotel room bills one after another. Do not realize that we already pay a Tourism levy of 4%, which is collected by the Alberta Government and then distributed, to Travel Alberta to market tourism in the province.

There are many towns, such as Calgary, Edmonton, Vancouver, Banff and Canmore that have put in place a “Marketing Destination Fund”. This is an additional surcharge added to your room bill that that is used to market and promote that area.

In theory, it is a good idea and could be very effective as a revenue raiser under the right circumstances.

The other side:

• It’s another tax, anywhere from 1-3% is being charged

• Who collects and administrates the funds at what cost

• It’s voluntary so will all hotels collect it (Canmore Hotel and Lodging Association, states on its web site despite being in place for at least four years only 19% of the hotels in Canmore/Kananaskis charge the fee)

• What about the 4% we already pay that his intended to promote tourism, maybe our local and provincial politicians need to chase that source of funding.

• Most hotels charge it prior to the present tourism levy and GST, so the client now pays an additional 9% on the marketing destination charge.

• Will it apply to bed and breakfast accommodation?

• If the communities around you are not doing a similar process does it not become a deterrent, a significant number of our present hotel stays are crews working in the area that will spend tens of thousands of dollars at a time. An extra 2% on a $20,000 tab is $400 why not stay in Pincher and save those dollars some company’s will.

Any way I am sure, when council looks at this there will be some very spirited debate, it will also be interesting to see the reaction of our local hotels/motels.


Anonymous said...

"Spirited (public) debate" from this council? Surely you're joking? :-(

Anonymous said...

Do you think that this council will debate this when they have not debated anything up to this point.
Or will they discuss the issues behind
closed doors. This council run on
been transparent which I have not seen up to this point.

David Cole (Choppy)

Anonymous said...

As a tourism operator in the Crowsnest Pass let me assure you and the council I for one will NOT be collecting the tax.

Anonymous said...

Most hotels charge it prior to the present tourism levy and GST, so the client now pays an additional 9% on the marketing destination charge.

I think these numbers are wrong.If a room costs 100.00 x 4% tax equals 4.00 plus GST of .20 on that 4.00 equals 4.20 or in this case 4.2%.
I also do not think it will be the deciding factor as to where you stay.4.20 per night will not influence many.
I am more interested in the potential .01/liter at the pumps. What kind of money could this bring in. Would locals have to pay it? Every 100 liters you buy would cost you a buck, I could live with that.My question would be how much gas gets sold in a year at the local pumps.Every million litres would bring in 10,000.00

Anonymous said...

Dean do you know anything about this gas tax. It seems too good to be true, if it was that simple wouldn't every community do it. It would sure lessen the burden on the residential taxpayer. And a great revenue generator for all municipalities.
Do you know of a community with this in place? how long did it take them to put it in place. It would be interesting to know.


Dawn said...

The topic of an additional tourism levy has been tossed around here for some time. How they will implement it will be interesting to see. But I do see a great deal of problems if it is a voluntarily thing where some operators charge it and others don't.

An additional destination levy is charged in more places than I can count, all over the world.
In the case of the provincial levy it is charged on any lodging operation of 4 rooms or more and is on the amount of the room cost excluding GST and you do not charge GST on the levy. Hence $100 per night room x 5% gst and 4% TL= $109.00 per night. It is not charged on stays of over 28 days.

Crowsnest Pass Home said...

Here is the example from Canmore you can clearly see the GST and the provincial levy are being charged on the Destination marketing fee.

I agree there are lots of places where this is charged but every one I have checked is on a voluntary basis. Going back to the Canmore example only 19% of the operators are involved after 4 years of being in place.

Crowsnest Pass Home said...

Dawn do you know anything about the fuel levy? having a tough time finding information on that.

Anonymous said...

A major tourist attraction of the region is that you may camp for free on Crown land (including 30%?? of the municipality). These tourists don't usually plan to spend their limited vacation time shopping on our main streets or eating in restaurants, so they bring their supplies from Calgary or Lethbridge.

The Provincial hotel tax goes towards promoting this kind of tourism, which contributes little to our economy. An additional hotel levy would be hard to justify unless it was used to attract tourists to local hotels and businesses. What would be the "target group" of tourists?

I was hoping for some new ideas from the Task Force, but it turns out their mandate was just to rehash ideas from previous reports. Hiring a tourism coordinator might help, but (s)he will have the job description of promoting existing tourism, or whatever comes along.

CNP Council should be proactive in asking the province to manage Crown lands in and around us to benefit our economy. I haven't seen that, correct me if I'm wrong.

Dawn said...

I'm sorry Dean I really don't know anything about the gas tax idea. This is the fist I've heard of it here. I sort of remember something about it being charged in some where in California I think but I couldn't find any info on it
In my previous post I was only referring to how to charge the provincial levy (I've never been involved in charging a destination levy). It surprises me that the provincial levy is charged on the destination levy amount. The whole taxing a tax thing.

@anon 10:02 The provincial levy is mostly used to fund Travel Alberta and although they do promote camping a little but very little and I don't think I've ever heard of them advocating random camping. They mostly fund marketing schemes for areas ,groups of operators ( the little Crowsnest travel guide a couple of years ago was partially funded by travel Alberta) ,operate the 9 VIC's in the province ( the one out at the lakes is funded by Travel Alberta and then managed by the Chamber) + the Travel Alberta Website and then promote the province (ie. commercials like the SuperNatural British Columbia but the Alberta ones) as a whole to other Canadians as well as overseas.
And by the way the bulk of my guests in the summer are here from the US and Ontario fly -fishing or they are families here going to the heritage sites,hiking and going to the festivals or just exploring the area. Now that's not to say that there are not campers out there but from my experience the bulk of them are from with in 3 hours of here and there numbers are small in comparison ( they do tend to flock to town when it rains etc and its done a lot of that in the last couple of years) Most of those campers you see going down the highway are headed to BC.

In the last couple of years we have seen a drop in sledders staying in the area. Last year we had more snow than we have had in years but the sledders didn't come, They headed straight on by. Many of the operators attribute that to the lack of area marketing presence for the area as a whole. I myself see a number of reasons for it including that.

Anonymous said...

The more I think about this gas tax the more I like it.It really will not cost the average local taxpayer a lot but could bring in a lot of money to cover costs towards tourism promotion.What do you think of these numbers.
1000 vehicles/day -100 litres each equals 1000.00/day.
As for the truck stop idea, I really like this also.I think it would be a perfect fit on the outskirts of town.As for the 1 gas station owner who thinks this will hurt his business, I am sorry but we can not have the attitude of not growing if it will effect a few.Comments anyone?