The Nanaimo Hospitality Association and the city are at odds over administration of the hotel tax.
The municipal and regional district tax is a sales tax on hotel rooms and other short-term accommodations charged since 2015 to support development of local festivals and events, Indigenous tourism and marketing related to those endeavours. The tax is collected by the province, but under a separate agreement, the city contracts the NHA to administer, according to five-year business plans, how hotel tax revenue is used.
The NHA was informed by the city last month that when the current hotel tax agreement expires one year from now, the city won’t renew a five-year contract with the hospitality association and will ask the Tourism Nanaimo society to administer the funds under a new agreement.
Dan Brady, Nanaimo Hospitality Association executive director, appeared before council Monday, April 8, to protest the city’s plan.
He said his association has attempted to have the hotel tax agreement with the city renewed since 2023, but just one meeting was held when the NHA was informed of the city’s decision.
“We were simply handed an envelope containing a written notice informing the NHA board chair that as of March 31, 2025 the NHA would no longer be administering the MRDT funds,” Brady said. “Shortly after, the Tourism Nanaimo board was approached by the city staff and consultants asking if the society would take on the administration of the MRDT funds.”
He said the tourism board hasn’t yet made a decision on that.
“In 2022 we offered to revise the MRDT agreement and move all of the MRDT dollars to the new [Tourism Nanaimo society] when it was being created with one caveat, that the accommodations sector, with our years and years of experience in tourism, have the controlling number of seats on the tourism board,” Brady said. “This is common practice throughout B.C. for the accommodations sector to have the controlling number of seats on the [destination marketing management organization] board.”
Brady said the hospitality association doesn’t support the proposed administration structure and there is the risk of losing the tax dollars – currently $1.2 million collected annually – which must be agreed upon through a vote by the accommodations property owners to be approved under provincial sales tax legislation.
In an interview with the News Bulletin, Brady said it comes down to a matter of who controls the money to ensure it continues being used for destination development, but stakeholders, such as the the hospitality association and Tourism Nanaimo haven’t been consulted.
“I don’t like using the word ‘control,’ but there was commitments that were made back in 2014 that aren’t being lived up to now,” Brady said. “If it goes to Tourism Nanaimo, what’s going to happen to some things that did come to fruition and some have not yet, like the Snuneymuxw cultural centre … because that is in the works. So who’s going to make sure that destination development stays at the forefront?”
Laura Mercer, the city’s general manager of corporate services, said the motivation to move administration of the tax to Tourism Nanaimo is that the agency is the city’s official destination marketing management organization, which positions it to access various kinds of funding through Destination B.C. It’s a multi-stakeholder, non-profit and autonomous organization.
“Its board of directors is include representatives from the entire tourism sector,” Mercer said.
The board includes the hospitality association, which has three seats, Snuneymuxw First Nation, Vancouver Island University, Nanaimo Airport, tourism operators and the arts and culture and transportation sectors.
“So the tourism board has a full representation of the entire sector,” Mercer said. “Tourism Nanaimo, the society, was created in 2022. In the past Tourism Nanaimo wasn’t a well-supported agency like it is today and so the administration of the MRDT revenue didn’t sit there, but now that the city has this strong agency in place, the city feels it is appropriate for the … program to be administered by Tourism Nanaimo. In addition, the industry best practice is to have the [destination management organization] administer the program.”
Mercer said the vast majority of B.C. municipalities use that structure and that, based on the city’s research of the communities Brady cited on Monday night, none have a majority of hoteliers on their board. The composition of the boards in each community’s DMP is outlined in their bylaws, she added.
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