Earlier this week Doppler reported that Councillor Bob Stone hasn’t given up on the idea of a Destination Marketing Fee (click here to read the story if you missed it). That fee would see area accommodation providers levy a fee on top of the their rate, and the money would go towards marketing and funding events in order to draw more people to the community.
On Monday, Town council agreed to pursue it further:
The committee thought that it would be difficult to get the hotels on board, so it chose not to spend any effort to that end. But let me tell you that the mayor and myself have started discussions with some hotels and we’re happy to come back with whatever we find.
CHAIR OF HUNTSVILLE’S ECONOMIC DEVELOPMENT COMMITTEE, COUNCILLOR BOB STONE
Chris Lund, Regional Vice President and General Manager of Deerhurst and Horseshoe resorts, has experience with that fee. He was on the Greater Toronto Hotel Association Executive when the levy was first implemented in Ontario in the City of Toronto. An estimated 125 hotels signed an agreement with the Association and Tourism Toronto to levy a three per cent tax, and put together a plan on how to spend those funds.
“In return the hotel association and Tourism Toronto guaranteed a certain budget that was designed to be spent toward predetermined markets to drive tourism to the areas,” he explained. “Back then, in 2003 or 2004 somewhere in there, it generated about $30 million a year.”
In terms of implementing a Destination Marketing Fee in Huntsville, Lund questioned whether there is enough common ground among operators here to make it work.
Deerhurst Resort, Comfort Inn Huntsville, Holiday Inn Express – the list gets pretty short, pretty quickly even within the Muskoka context and then next thing you know you’re talking about Mr. and Mrs. Joe Smith’s small resort and are their interests and the interests of Deerhurst Resort the same, and would they necessarily spend their marketing money in the same areas?Deerhurst general manager Chris Lund
Lund said very few guests actually refuse to pay the levy.
“The other issue in Muskoka is there are a lot of people renting cottages and doing stuff that aren’t paying business taxes. They’re really under the radar. They’re being taxed as residents yet they’re running businesses out of their home. This money can’t go anywhere near promoting that kind of experience. In other words, it’s going to have to have nothing to do with cottages or I can tell you a business like Deerhurst wouldn’t support it.”
Asked about using the money to fund events such as the Ironman, which saw the bulk of participants stay at Deerhurst Resort, Lund suggested that the resort would’ve been full anyway.
“The week is within August (when) I don’t need the business. We did it to promote tourism on a broader basis. A lot of people think it’s all about Deerhurst but not really.”
He said most triathletes are on special diets so they don’t use the food and beverage facilities at Deerhurst.
“A couple of thousand people came to Huntsville, well they do other things besides stay at Deerhurst. They go into town, they go shopping… they went to the Independent and other grocery stores and bought all their food. Very few of them ate in my restaurants because they don’t eat cheeseburgers and drink beer,” he laughed. “It’s like anything else, there are two sides to every story.”
He said for him to support a Destination Marketing Fee in Huntsville, and make the recommendation to Deerhurst’s business owner to support it, he’d have to see what is being proposed, what the potential revenue pool might be, who would be tasked with spending the money, and how those funds would be spent.
“It is a useful concept. It has worked in other jurisdictions under the right set of terms and conditions,” he noted. But he said Deerhurst’s main market is conferences.
The reality about Deerhurst is we do almost half of our business from conferences and without conferences we wouldn’t be in business. There’s not enough leisure business coming into Muskoka to support a property the size of Deerhurst. The leisure market is important to us but only in and around what we can’t sell at the conferences. Chris Lund
He said Deerhurst can attract a conference in November, but it’s very difficult to attract the leisure market during the winter months – especially during mid-week.
Lund said if Deerhurst were to support a Destination Marketing Fee, a component of it would have to cater to attracting conferences and conventions to the area.
“And a lot of smaller operators who don’t have meeting facilities wouldn’t agree with that, so there’s one potential roadblock right there,” he said. “That’s why the comprehensiveness of what’s being proposed would have to have a lot of detail in it to get that broad range of support that’s needed,” he advised.
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