Hotel room tax pushed, possible

An effort to reconstruct Nanaimo’s destination development model could eventually see visitors funding tourism strategies, instead of local taxpayers and businesses.

Nanaimo Mayor John Ruttan, who in the last year has worked to overhaul a decrepit and archaic economic development strategy, said he supports a two-per cent hotel tax that would generate revenue to attract people to Nanaimo and improve hotel bookings.

“I would think there is a strong possibility of it and the frustration, if there is any, is it has been a long time in coming,” said Ruttan, who has pushed for the tax since he was president of Tourism Nanaimo 10 years ago. “It is really a mechanism to self-fund in a way, but it’s not really a tax for the hotels ... the reality is this is paid by users who stay at the hotel.”

Virtually every other destination municipality in B.C. has a similar tax, including Parksville-Qualicum, Victoria, Vancouver and Whistler, which is used to perpetuate marketing strategies.

It’s estimated that what is known as an additional room tax could generate as much as $400,000 annually, money that would enable local hotels to have a say in how it is spent to attract people here.

Historically, local hotels, motels and B&Bs generally opposed the tax because Nanaimo lacked attractions that would warrant it.

With a new strategy and fresh outlook toward attracting people here, however, local hotels are onside with the idea, but say there is a lot of work to be done first.

“[The hotel tax] is as informal as the new model for Tourism Nanaimo,” said Volker Grady, general manager of the Coast Bastion Inn. “As soon as the new model is released, and it’s very similar to Victoria and Vancouver, then you’ll see a more formal approach to applying the two-per cent hotel tax.”

Dan Brady, general manager of Howard Johnson Harbourside Hotel and member of the city’s economic development task force, said the immediate challenge is to establish a clear and efficient destination development model, put Nanaimo on the radar of potential visitors, then apply the tax.

“The stuff we’ve been working on is how to bring all these different segments of tourism together,” said Brady. “The hotel tax is definitely something out there that the hotels and motels would look at down the road when we see there’s a gap we could fill. It’s very complex, it has to be all new money, all new initiatives, and we’re just not at that point yet.”

He said customers a tax wouldn’t likely be an aversion because tourists already pay a similar tax in virtually every other destination area, and the amount would be a couple of dollars for a night.

In the last few months, Ruttan has established a 12-member economic development committee, overhauled the city’s economic development office, Tourism Nanaimo and destination marketing offices, and streamlined all marketing efforts.

He is also working to attract investors to develop a foot-passenger ferry from downtown Vancouver to downtown Nanaimo, a link he says is vital to attract people to Nanaimo and fill hotels.

“If the hotels aren’t having a great time right now, the argument might be let’s get going with that hotel tax and generate that money and promote the hotels and tourism throughout Nanaimo,” said Ruttan, adding that a hotel tax is more of an investment for hotels and motels, rather than having expectations on the city to provide destination marketing using taxpayer money.

Grady maintains people need a reason to come to Nanaimo first before foot ferries, improved airports and cruise ship terminals are built.

“People don’t come to Nanaimo because we have empty rooms,” he said. “We need to make Nanaimo a destination and right now we’re not. If we were a destination selling the convention centre to conventions it would be a walk in the park. We’ve done it backwards. We’re supposed to become a destination and then build a convention centre. We’re supposed to become a destination and then build a cruise ship terminal. What we’re looking for is an attraction, something that puts Nanaimo on the radar.”

Brady said focusing on a new strategy and implementing it will be an improvement on historic efforts.

“We’re just trying to move forward and do what we can to make Nanaimo a busier place and get some more heads in bed,” he said.

An additional room tax would require council approval.

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