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Nakusp-area hotel tax coming onstream

Business leaders in the Arrow Lakes region are moving ahead with plans to implement a hotel tax.
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Proponents say a hotel room tax would provide stable funding for tourism campaigns.

Business leaders in the Arrow Lakes and Slocan regions are moving ahead with plans to implement a hotel tax in the area to promote tourism.

They’re approaching local councils, funding agencies and businesses to raise money for developing the second phase of planning for the Municipal-Regional District Tax, or MRDT.

Under the MRDT, accommodations with more than four rooms would charge customers a two-per-cent tax on their rooms. The money would go toward tourism marketing in the region.

“It’s happening in 54 other communities in BC, to great success,” said Ali Raskob, the president of the Nakusp and District Chamber of Commerce. In fact, the Slocan and Arrow Lakes areas are one of the few in the region not to collect a hotel tax.

The local chamber and Slocan chambers have been developing the plan since 2016. A consultant was hired to explore how the concept would best work in the area, and approach the local hotel, motel and other accommodation owners to gauge support.

Raskob says it’s an idea that’s gaining traction locally. The consultant found 38 per cent of hotel owners were immediately in favour of the tax, and much more were willing to consider it, given more detail about how it works. Only two businesses were opposed.

“I think we’re just a little bit slower to the draw because of our location,” she says. “Sometimes in smaller communities, you get a lot of fear about growth, so it takes a little longer to take these steps.”

Hotel owners would collect the surcharge, as they do GST and PST. The money would go to the provincial government, which would forward the amount collected to a non-profit ‘destination marketing organization’, or DMO. The DMO would use the money to develop marketing campaigns and place advertising in magazines catering to tourists.

Locally, the model has been successfully implemented in Nelson and the Kootenay Lake area, as well as Castlegar. If the Slocan and Arrow Lakes areas want to be noticed, it’s a leap they have to take, says Raskob.

“I think people get scared when they think they will pay higher taxes or charge their customer base a little bit more,” she says. “But overall in the grand scheme, it’s pretty minimal when you consider a hotel stay is about $100. You are talking about two dollars for every traveller.”

But that little bit can really add up. The consultant’s report estimates the tax could raise $80,000 a year to promote tourism in the area. That can be used to attract grants from other organizations, to boost tourism even more.

Currently, local organizations lurch from grant to grant, starting and stopping tourism campaigns that are mostly run by volunteers.

“That’s not a very good way to do tourism promotion,” says Jan McMurray, the president of the Slocan District Chamber of Commerce. “You need a sustainable funding model.”

McMurray says the response from local accommodation providers was positive enough for the two chambers to move forward to Phase Two of the project. They’d shore up formal consent among stakeholders, develop a governance model for the DMO, develop a five-year marketing plan, and apply to the government to begin to collect the tax on their behalf.

She says Phase Two will cost about $17,000. The Chambers have gone to various local funders and governments, looking for support. Last week Nakusp council approved a $650 marketing grant, as did the New Denver village council. In all, they have about half the money needed.

McMurray says they want to start Phase Two as quickly as possible. Even at its fastest, however, it’s not likely to be implemented in time for the 2018 tourism season.

“The government takes up to nine months to approve the plan and begin collecting the tax,” she says.

“Next year would be ideal, but I am not 100-per-cent sure that is feasible,” adds Raskob. “But it is our intention to move forward as quickly as possible.”

While the tax only affects businesses with more than four rooms, smaller bed-and-breakfast operations and other tourism-based business can volunteer to collect the tax, and be included in promotional materials, says McMurray.

“Everyone benefits from this,” she said. “The whole regions, not just accommodations, though they get special support as they’re the ones collecting it.”

Raskob agrees the concept can really bring marketing the region to a new level.

“We don’t get the kind of tourism that we could,” she said. “People just honestly don’t know that we’re here.

“If we can get our name, the westkootroute.ca name out in travel magazines, that’s a draw, there’s a lot of positives to it.”


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reporter@arrowlakesnews.com

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Travellers will pay an extra two per cent tax on a hotel room, with the funds raised going to promote regional tourism.