Visitors to the city will soon see a four per cent fee added to their bill for overnight stays at hotels, bed and breakfasts and shared accommodations such as Airbnb.
In a 10-2 vote, council approved the implementation of a new municipal accommodation tax during its Monday evening meeting.
The fee, to come into effect on Sept. 1, is expected to generate between $500,000 and $950,000 annually which would be used to support a variety of new tourism initiatives, visitor attraction and infrastructure improvements in the community.
Half of those funds will go to the Guelph Chamber of Commerce, which council agreed to bring on to administer the new tax for the first five years. Doing so, city staff noted, requires some additional expertise at the chamber and includes the creation of a hoteliers committee to provide insight and input.
At four per cent, the tax is expected to add between $4 and $7 to the per night cost of accommodations in the city.
Voting against the motion were councillors Dan Gibson and Christine Billings. Coun. Mike Salisbury was absent from the meeting.
Gibson questioned whether the tax and resulting community funding would help promote arts and tourism initiatives that don’t receive community well-being grants from the city, noting he’s heard “some frustration” about the lack of funding provided in the past.
“We have more applications than we have money,” commented deputy CAO Colleen Clack-Bush, referring to the well-being grants program. “There is a great opportunity here to support those organizations.”
While the specifics of how that money will be spent haven’t yet been decided, council heard from a pair of delegates that encouraged spending some of the money on events that attract tourism – one spoke about heritage-related events such as Doors Open, while the other highlighted the potential benefits of becoming a declared “music city.”
“This is big bang for little buck,” commented Miranda Mulholland of Music Canada and also a Guelph native, who suggested the return on investment is four-fold in economic spin-off benefits, especially for the hospitality industry.
Coun. Dominque O’Rourke pointed to the possibility of sports tourism efforts or other options such as declaring Guelph to be a “Christmas town” as examples of things to consider funding through the new tax.
City staff noted there are already a variety of committees and organizations in the city that play a role in tourism efforts, including the Downtown Guelph Business Improvement Association, council’s economic development and tourism advisory committees and more.
Included in the council-approved motion is the creation of a special reserve for municipal accommodation tax funds, with up to $1 million approved to cover startup costs.
