Taxes to increase tourism
AUGUST 2004, — VOLUME 2 ISSUE 9
It’s something that’s been in place for many years in many cities throughout B.C. and now hotel room tax is on its way to this region.
Whistler, the first area to instigate hotel room tax in 1988, was closely followed by Vancouver and Victoria. And based on the success of these models, Kelowna introduced it in January of this year.
Hotel room tax, which generates a further two per cent from the consumer on each room sale, provides an injection of revenue into local tourism industries. The money is primarily turned into marketing dollars and is mainly used for promotional purposes.
Kamloops and Sun Peaks are, at present, both engaged in the process to implement this lucrative system. Christopher Nicolson, executive director for Tourism Sun Peaks, says for the most part, the hotel room tax will benefit the resort by providing more money to enhance Sun Peaks’ position as a major tourism player province-wide.
“As Sun Peaks as a destination grows, we’re recognizing more competition from our immediate competitors,” Nicolson says. “Whether you’re talking about resorts in the Okanagan, or Whistler, there’s much more competition and the requirements for marketing are more extensive.”
The additional $200,000 yearly income, hotel room tax will create for the resort, Nicolson says, will provide a funding mechanism, allowing them to target more business from abroad.
“Sun Peaks is now starting to market further-a-field and south of the boarder, the cost of marketing and sales are much higher because of the exchange rate,” Nicolson explains. “As we move into markets such as California or we try and do more in Australia, the U.K. or even Ontario, our dollars are being stretched . . .”
Many of Kamloops hotels are onboard with introducing the idea of hotel room tax, says Tim Rogers, director for The Kamloops Hotel Association. He says although feedback has been positive, they still have a long way to go.
“It’s really about how soon we can get the stuff together to present a package to the [hotel] membership for a vote,” says Rogers. “That’s the issue and whether that’s two weeks or two months, I don’t know,” Rogers adds. “The majority of hotels support the concept and it all comes down to how it’s going to look. If nobody else is bringing money to the table it won’t fly.”
According to Jeff Putnam, business services manager for The City of Kamloops, measures are in place by the city to introduce this means of additional financial support, because the city, he says, believes hotel room tax is a must for Kamloops.
“From the perspective of The City of Kamloops and City Hall we strongly encourage it and endorse it,” says Putnam. “Right now the Mayor and council are considering a five year commitment for tourism funding from the city on top of hotel tax.”
Hotel room tax revenue in Kamloops is estimated at around $700,000 annually. Putnam says this funding will help Kamloops to realize its full potential as a tourism destination.
“The hotel tax is necessary because the Kamloops region doesn’t have enough public marketing resources currently to compete with other major marketing destinations such as Kelowna, Vancouver Island and the Lower Mainland,” he says.
“Kamloops is still not thought of as a destination, it’s viewed as a pass through destination.”
“We need to spend a lot of money promoting the fact that Kamloops is a world-class tourism destination,” continues Putnam. “That you can stay here for two weeks and do more than you can do in most places on the planet. So having these resources will be a huge boon for us.”
While Kamloops begins the process to establish hotel room tax in city hotels, Sun Peaks is hoping they’re on track to implementing hotel room tax at the resort, as soon as next year.
“The current status is that Sun Peaks has applied to the provincial government for a hotel tax and we’ve recommended that it would start Oct. 1, 2005,” Nicolson explains. “We’ll find out more as we move on . . . we’re looking for an answer as soon as possible. But when it comes to these sorts of circles, I’m afraid we don’t have an iron clad guarantee as far as time line.”
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