Room taxation renewal urged

More support from local hotels and motels is needed to renew an accommodation tax used to promote tourism in the area.

  • Wed Feb 8th, 2012 11:00am
  • News

MORE support from local hotels and motels is needed to renew an accommodation tax used to promote tourism in the area.

The tax, which amounts to a two per cent tax levied on motel and hotel rooms, was first set to end in 2009 but then extended until June 2012 because of tax changes caused by the HST.

A successful renewal on the part of Kermodei Tourism, the Terrace-based marketing body responsible for using tax money for  regional tourism promotion, means it first needs support of the majority of hotel and motel owners accounting for a majority of rooms.

As of last week, the society had support of seven out of 15 owners, accounting for 42 per cent of 480 rooms.

A 2008 study estimated that tourism brings in $38 million a year to Terrace and area from 260,000 visitors, not including money spent at fishing lodges.

It’s Kermodei Tourism’s job to promote tourism and ensure it remains a viable part of the economy.

But without support from the majority of local hotels, paying for local tourism promotion would have to shift from the purses of visitors  to the pockets of taxpayers and local businesses. Or, it may not happen at all.

The two per cent tax generated $105,000 up until October in 2011, $112,438 for all of 2010, $115,000 in 2009 and in 2008, $127,097.

The city has given a $35,000 grant yearly to the society, and tops off the hotel tax with another $40,000, said city officials.

As the tax’s term is up this summer, the society needs to reapply by the end of this month to ensure the renewal notice is in place in time.

Of four local hotels with more than 50 rooms, as of last week only two were on board with 62 and 58 rooms respectively.

“We as the Coast Inn of the West and Best Western Plus Inn are 100 per cent on board for the renewal and here is why,” said Dan Biggs, the operations manager of both, explaining the tax comes with many advantages.

Each penny is reinvested into local tourism which reaches areas local media can’t, he said, and brings people into the community.

In the past, Kermodei Tourism has organized things like contributing local content to a television fishing show, and hosted other TV crews to film things like white water rafting in the region, skiing at Shames and more.

Among others, current project examples include  developing an application so local tourism information is more widely available on smart phones and establishing an information kiosk at the Northwest Regional Airport.

Biggs said the charge per room is minimal, averaging about $2-5 per night.

“Your consumer is paying a tax that benefits all of Terrace and reaches out to all of B.C. if not further, versus yourself paying thousands of dollars in advertisement that will only reach so many communities,” he said.

“The hotel tax isn’t just intended to promote hotels in Terrace, it promotes Terrace and everything Terrace has to offer.”

Despite what Biggs describes as a positive for the community and hotels, the Alpine House Motel, which has 24 rooms, will not be signing on.

“The clients we get complain there are way too many taxes,” said owner Gurpal Lugla.

Kermodei Tourism president Debbie Russell acknowledged that not all hotel and motel owners agree with the tax.

For some, the lack of unity goes back to 2006 when the city pulled its support from an earlier tourism society, the Terrace Tourism Society, and created Kermodei Tourism in its place.

That left some motel and hotel owners leery of continued city influence over tourism promotion.

“There’s still leftover animosity from the previous Terrace tourism dealings between the city and Terrace tourism which is affecting people’s decision to sign up this time,” said Russell.

“There are a few people that say they don’t want to see Kermodei Tourism treated the same way as Terrace Tourism experienced with the city,” she said.

“At the end of the day, if we don’t get that two per cent they’re doing to us what the city did to them [which is pull money needed to do the job.]”

Russell and society executive director Graham Genge say that while the city did play a role in setting up Kermodei Tourism and plays a part providing money to it, its operations are run independently.

“We haven’t had to function under the direction of the city.”

The city also sent a letter to local hoteliers in December 2011 to clarify its role.

“The operating agreement in place between the City of Terrace and Kermodei Tourism Society identifies Kermodei Tourism as “the lead tourism entity that will have overall responsibility for tourism and will partner and coordinate with other agencies and stakeholders to develop and grow the tourism sector in Terrace and the surrounding region,” said the letter. “The City of Terrace is very proud of the accomplishments of the Kermodei Tourism Society.”

As part of a memorandum of understanding between the city and Regional District of Kitimat-Stikine, both through which collected tax dollars travel before reaching the society, the letter explained the city would not use any of the money for its own purposes (general revenue.)

Ultimately, if the tax doesn’t get support, Genge said the fallback would be to ask local governments for more money.

Failing that, local businesses might have to play a larger tourism role, he said.