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Council to consider new hotel tax to fund tourism initiatives

Proposed 4 per cent surcharge on hotel stays would generate between $500,000 and $800,000 annually, says a city report
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File photo.

The City of Guelph is looking to implement a Municipal Accomodation Tax (MAT) to fund activities under its new proposed economic development and tourism strategy. 

The proposed four per cent surcharge on hotel stays would generate an estimated $500,000 to $800,000 annually, said John Regan, general manager of the city's economic development and tourism office. 

The tax is mentioned in a report on Jan. 10's committee of the whole agenda and will come to council for approval on Feb. 7.

Regan said council was set to consider implementing a MAT prior to the pandemic, but due to COVID that conversation was postponed until recently. However, it appears to be as relevant as ever. 

"Now that we've seen just how hard the tourism industry has been hit, implementing the MAT in 2022 certainly makes a lot of sense," he said.

Other municipalities with a MAT — a list which includes Toronto and Waterloo region — have been able to use some of that funding to help tourism providers rebuild from the pandemic, Regan said. 

"And so if the MAT is approved in February it certainly gives us another tool within our department to help those tourism businesses grow (and) retool themselves" he continued. 

According to the report, 50 per cent of the revenue generated by the MAT would be used by city for "new and enhanced destination management projects and programs." These could include, for example, the creation of packages with accomodation and tickets to a show or sports game, Regan explained. 

The other 50 per cent would pay for an external entity to do destination marketing — in other words, "building that brand as to just how awesome Guelph really is," Regan said.

The Guelph Chamber of Commerce was selected to carry out the destination marketing aspect of MAT funding through an open tender process about three years ago, but nothing has been finalized by council, Regan said. 

He emphasized that the MAT has not yet been approved, and the activities it would be used to fund are still in development. Assuming the new tax gets the green light from council, the initiatives it will be used to pay for will need to be "fluid" and "flexible" given uncertainty around the pandemic and the city's shifting economic development and tourism needs, he continued. 

"It's just so important, now more than ever, that we have a solid strategic plan," he said, referencing the proposed 2022-2026 Economic Development and Tourism Strategic Plan the will be discussed at the Jan. 10 council committee of the whole meeting. 

Following that, council will vote on the Municipal Accomodation Tax on Feb. 7. Further information on the tax will be available in a forthcoming public report ahead of that meeting. 


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Alison Sandstrom

About the Author: Alison Sandstrom

Alison Sandstrom is a staff reporter for GuelphToday
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