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Hotel tax spending under scrutiny

Sundial operator believes hoteliers should be at the table when municipality plans to spend hotel tax

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Municipal planners are already looking beyond 2012 as they investigate where to spend the hotel tax revenue.

Future planning includes how to develop arts and culture, health and wellness, and bring sport tourism products to market.

"The municipality is in the business, more than ever, of making sure those heads are in the beds," said Bill Barratt, chief administrator of the Resort Municipality of Whistler.

"If the village is full that means the rest are doing well, the retail is doing well and so is everything else, so we all have to work together.

"We really need to help to continue to develop the product so (the hotels') daily rate can go up and their occupancy can go up."

Whistler has two revenue-sharing agreements with the province: a two per cent agreement that took effect in 1988; and a four per cent agreement entered into in 2006. Together, the agreements provide RMOW with hotel room tax revenues equal to six per cent of the total room revenue generated each year by Whistler's hotel sector.

In 2007 the RMOW signed a memorandum of understanding with the province about the use of the four per cent tax. Part of that includes developing a five-year plan for the money and then keeping track of the spending and its impact.

Now at the halfway point, it's time to look beyond the first plan said Lisa Landry, general manager of economic viability for the RMOW.

"We have been working on updating this," she said.

The RMOW gets a cheque from the provincial government each month for the hotel tax. In 2008 the RMOW received over $11 million in hotel tax. But this year resort officials have projected that the winter revenue will be down up to 20 per cent, and summer will be down 12 per cent. To date December revenue was ahead $170,000, January was ahead $140,000, but February was down $15,000. March is also expected to be down, though June is already tracking ahead in bookings thanks to the Federation of Canadian Municipalities conference.

The two per cent tax can be spent on tourism promotion projects and programs. The four per cent tax spending is broken into two broad categories: resort programming and resort infrastructure.

The first category would include items such as the Whistler Film Festival and the Whistler Centre for Sustainability, while the second category would cover costs associated with things like the conference centre upgrades and the new athletes' centre at Cheakamus Crossing.

The province wants the money used to grow tourism, said Landry.

"(It doesn't) want to see those funds used for things we already provide," she said. "It is supposed to be directed toward growing tourism, which is consistent with the premier's goal (of doubling tourism in B.C. by 2015)."

Asked if he thought the tax was essential to the success of Whistler Barratt said: "Absolutely. Without a doubt it is essential both to this resort and any emerging resort. There is an expectation of a high level of service and we provide the product."

Added to that visitor expectation, said Barratt, is the need to stay up to date and fresh, and that means always looking at ways to rejuvenate the resort.

Currently all the hotel tax spending is guided by the municipality's five-year plans.

Dave Demers, principal owner and operator of the Sundial Hotel, would like to see the hotel sector at the table with the municipality and other partners when the planning is done.

"We feel that they should at least have us in on how they are going to use those monies, especially the two per cent hotel tax, because that is the purest part of the hotel tax," he said.

The focus has to be on growing the number of people coming to stay in Whistler, said Demers.

"We don't have any more monies to go after," he said. "All we have is the 2 per cent and some of the 4 per cent and it has got to be used to bring more people to Whistler."

He pointed to the substantial effort it takes to bring group bookings to the resort - it can take up to two years to get a major conference booked - and questioned whether that type of marketing might be a place to invest some of the hotel tax dollars.

The tax is collected by hotels and other multiple-unit accommodation providers. People with three units or less to rent do not collect hotel tax.

Demers believes all accommodation providers should collect the appropriate level of tax.

"For (people with three units or less) not to pay hotel tax is not right when we all are," he said. "It should be an even playing field.

"They are piggybacking off the dollars we are spending to bring people to this resort. We need as many dollars as possible to drive this resort, and B.C."

The issue is also on the RMOW's radar.

"We have highlighted (to the province) that is a concern to us," Barratt said.

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