The idea of implementing a destination marketing fee (DMF) through local tourism businesses has some members of the community very excited, and some just plain won’t discuss it.
Councillor Bob Stone, chair of the Town’s Economic Development Committee, tried last month to have his committee add the initiative to their task list for the year. In a vote, with a majority citing ‘been there done that, we should not waste our time,’ the committee decided not to further investigate the idea.
In Ontario a destination marketing fee is a voluntary initiative whereby providers in the tourism business, most commonly accommodation, in a specific region collect a fee from their customers for the purpose of supporting regional tourism marketing and development. The fees that are collected are turned over to a local, non-profit, destination marketing organization to pay for identified marketing initiatives. This fee may be based on a small percentage of the overall bill or a flat rate. Destination marketing fees are not presently governed by legislation but exist on a voluntary basis in other regions in the province, most notably Niagara Falls, Ottawa and Toronto.
Stone just doesn’t understand why such an opportunity is not worthy of further exploration.
In my opinion it’s an opportunity that should not be missed. It costs them (hotels) nothing. That money would then be used to increase tourism, and hopefully, in the off season. By doing this it frees up money the Town is now spending on things like Ironman, which cost over $90,000 this year, for things like roads. It’s a win, win, win. The taxpayers win. The hotels win. And the Town wins. It makes so much sense to me.
Councillor Bob Stone
Ironman Muskoka medical director and local doctor, Rich Trenholm, agrees.
If the community collectively puts this tax into effect, we would have ample enough money to help run not only events like the triathlon events but as well, music festivals, cultural exhibitions, theatre in the park, studio tours, and all the kind of tourism that puts people in the beds of these resorts.
Rich Trenholm, Ironman Muskoka
Trenholm fully acknowledges how expensive it is to host a world-class event such as the Ironman and says chasing sponsorships is not a sustainable model. “The single greatest challenge to bringing these various events to a community, to put our community on a world stage, is the money. If we had the ability to pay to have these events come to our community as well as market them properly, the return on that investment will come in spades. We need a sustainable model for funding on an ongoing basis. We have racked our brains to try unstable platforms such as sponsorship and grants. A DMF provides (that stability). As long as it is a transparent process and explained well to the tourist there will be less push back.”
The downside
However, push back from consumers is widely documented in the media. Perhaps most scathing is the Marketplace segment that used phantom tourists and hidden cameras in Niagara Falls to expose a complete lack of transparency and understanding of the fee on behalf of businesses and their staff who are collecting it.
Perhaps it is because of the reputation that precedes the DMF, that to date we have been unable to secure a comment from anyone in the accommodation sector? Getting the hotels to the table, even to just talk about the idea and the many concerns associated with it, may be the greatest challenge.
It has been suggested that between $700,000 – $900,000 a year could be raised
Since at this point the idea of establishing a DMF is a non-starter, work hasn’t been done to determine how much money could be raised through the initiative. However, unformalized numbers as high as $700,000-$900,000 a year have been suggested. There is no shortage of events that could benefit from that kind of cash infusion; Nuit Blanche North, Muskoka Heritage Place, Film North Festival, Ironman Muskoka, and the Huntsville Lake of Bays Chamber of Commerce are just a few organizations who have been in the news lately because of funding woes.
Councillor Stone hasn’t given up on the idea. “I see no harm in having the discussion and educating the hotels. The minutes from the Economic Development committee will go to council (Monday November 23) and if the majority of council has heard a lot of the comments recently, they may pull this item and add it back on to the task force.”
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This fee/tax is an INSULT to the visitor. Ask the folks living in the Niagara Region that have had this fee implemented in their business sector. The complaints have been overwhelming.
It looks bloody awful on the business sector. And it places employees in a very awkward position of answering the questions raised by the paying customers, ‘What is this fee for? Is that necessary? What am I paying for? Is it mandatory that I pay this? And what if I don’t? Can I have that removed from my bill?’ ….and the list goes on.
Bad marketing. Bad PR. Bad all around.
My advice to any of my local clients would be DON’T DO IT…. it’s bad for business.
Population growth and the increasing costs of health care, infrastructure, and environmental protection are taking priority in state and municipal budgets everywhere. So even after massive volunteer efforts, other sources of funding are needed to create and maintain the shared public assets and events that fill hotel rooms.
Destination / tourism / travel / room taxes are common across the USA, the European Union, and many parts of Canada. 22 US states involved in tourism levy a travel tax on lodgings ranging from 3% to 13%. In the EU, travel taxes range from 5% to 10% of the room rate. Most municipalities in BC have a travel tax. For simplicity of collection, they are usually applied in establishments with more than four rooms.
Why rooms? Other than a slight inconvenience, it costs the room owners nothing, but it is a way for outside travellers to help fund the shared public assets and events that they came to see. Locals go to restaurants, but locals seldom rent rooms.
Room taxes are not a deterrent to business. How often do you hear, “I am going to vacation in Brampton instead of Niagara because Brampton doesn’t have a 3% room tax”? Muskoka has been recognized by National Geographic as one of the world’s top travel destinations. Who stands to benefit from high quality shared tourism assets funded by a room tax more than the room owners themselves?
Not in agreement with any extra fees. It completely takes away from the reason people come to Muskoka.
It is up to each of us, everyday, to engage and encourage visitors and locals alike. Keep people coming back because of the experience and uniqueness of Muskoka.
It may cost $90,000 to put on the Ironman but how much does it generate, surely a lot more, as well as the repeat visitors in future.
I agree with Brian Tapley’s point that tourism benefits many businesses in addition to the “roofed accommodation” hotels.
Imagine the impact if the largest resort in our area, -the “virtual resorts” with over 5000 bedrooms for rent – were to be included as well. It would be a windfall. They too would benefit immensely with increased numbers of tourists coming.
Ironman could be re-christened “Platinumman”
DMF fee. As a tourist, when I encounter this fee it irks me. I know, illogical, other fees and taxes are more money but it irks me and a lot of others.
As a business can anyone tell me why it is that this fee always seems to fall upon the roofed accommodation sector to collect? Is it just because we are an “easy target”? Why not have all the restaurants, gas bars, gift shops, attractions, heck even Walmart and the Ironman can collect this fee? They get as much or more benefit from tourism too so why do they get the free ride?
Don’t forget to make it prominent and clear to the tourist that this fee is “optional” and they do not have to pay it. This little feature usually gets lost on it’s way to the front desk staff.