Stratford city council is considering implementing a four-per-cent municipal accommodation tax to bring in additional revenue for tourism marketing in the city.
Tourists who stay in hotels and bed and breakfasts in Stratford may soon see a four per cent bump to their bills when they check out in the morning.
Stratford council voted 9-2 Monday to support, in principle, a new municipal accommodation tax for hotels, bed and breakfasts, and other businesses that offer short-term accommodations in the city that, if approved, would come into effect at the beginning of next year.
A common practice among many Ontario municipalities, half the revenue collected through the municipal accommodation tax must go to a non-profit tourism agency in support of destination marketing while spending the other half is left up to council’s discretion.
“My concern is that this has come to council (rather quickly),” Coun. Cody Sebben said at Monday’s meeting. “The ball was started in motion without a real discussion about whether this is good for the city or not.”
The notion of a municipal accommodation tax came from a committee discussion last August that prompted local politicians to ask staff to look into making the Stratford Tourism Alliance’s Destination Marketing Program – a voluntary fee charged by some businesses in the city to support of the tourism agency’s marketing efforts – mandatory.
“If this does move forward, I would like to see us consider that the Stratford Tourism Alliance would no longer be a member-based alliance,” Coun. Jo-Dee Burbach said. “Because they would be getting a chunk of tax money, they should no longer be member based. They should be representing all of the tourism-related activities that happen in Stratford.
“Right now, they don’t necessarily support you if you are not a member.”
The Bruce Hotel owner Jennifer Birmingham, who attended Monday’s meeting, told the Beacon Herald Thursday she completely opposes the proposed tax.
“We have to look at how Stratford is drastically different from some of these other tourism areas that have charged (this tax) for years, like Toronto or Niagara Falls. … People have been coming to the city here for 50, 60 years – as long as the (Stratford) Festival’s been around – so we are going to thank them for their loyalty, for supporting us through the ups and downs, (by levying this tax). … These people come back year after year, in large part because of the people in the accommodation industry. We have an incredible impact on what shows they see, where they eat. … This is not how to get more people into the city,” Birmingham said.
Birmingham doubted the effectiveness of Stratford Tourism Alliance marketing, suggesting the tourism agency has done little, if anything, to help her bring guests through the door in the 23 years she’s been in business
“I know there’s a lot of people in the tourism industry who are frustrated with the (agency). They are not thinking outside the box. … As a business owner, I’m frustrated with all the things the city and tourism alliance decide to do with very little input,” Birmingham said. “They’ve never asked me anything about my business. … I don’t know how you can be representing tourism in the city without an idea how healthy the tourism industry actually is. … It’s hard to compete with things like Expedia and TripAdvisor. That’s where people go for their information.”
As part of the motion to support the tax, councillors also voted to have the city clerk pursue an agreement with the Ontario Restaurant, Hotel & Motel Association – the only third-party administrator of municipal accommodation taxes in the province – to work with the municipality and local businesses to implement the tax, develop a database of accommodations businesses, collect and remit the tax, and administer the program on an ongoing basis.
In speaking with the Beacon Herald on Friday, association president and CEO Tony Elenis said the increasing number of municipalities that have implemented municipal accommodation taxes, not just in Ontario but across North America, is making it difficult for those few municipalities who haven’t levied the tourism tax, such as Stratford and the City of Hamilton, to stay competitive in the tourism market.
“Every jurisdiction is unique and you need to study your marketplace and (compare) it against your competit(ors),” Elenis said. “If your competit(ors) have more money, or will have more money, they’re going to steal business from you. You’re not going to grow your business.”
And while municipalities are only required to spend a minimum of half the tax revenue on tourism marketing, Elenis said many of the cities his association is working with dedicate more than that to local tourism.
“It’s only sensible that the hotel community is involved in the decision making of how the money’s spent. … (In Kingston), 65 per cent (of that revenue) is going to the promotion of tourism, and the remaining 35 per cent stays with the city, as it will be spent on capital projects associated with tourism,” Elenis said.
The estimated price tag of the agreement with the Ontario Restaurant, Hotel & Motel Association would include a startup cost of $3,000 and one per cent of the annual gross tax revenue, about $8,000 based on an estimated yearly revenue of $800,000.
Council also gave city staff the green light Monday to begin public consultation on the proposed tax program and to prepare a report for an upcoming finance and labour relations committee meeting.