It looks like the Harbour City’s accommodation tax rate will be going up.
Nanaimo councillors voted unanimously in favour of a motion calling for the increasing the city’s hotel accommodation tax – also known as the municipal and regional district tax – from two per cent to three per cent during a council meeting on Monday. Councillors did not debate the motion.
As a result, staff will now submit an application requesting an increase to Destination B.C., the provincially funded crown corporation. If approved, the rate would remain at three per cent from 2020 until 2025.
The municipal and regional district tax applies to the sale of short-term accommodation in certain municipalities and regions throughout the province, including Nanaimo. Revenues generated from the tax are used by the city to help fund tourism-related programs and projects, such as financing the operation of new tourism facilities, and tourism marketing. It can also be used to help fund affordable housing initiatives.
Although the MRDT has been around since 1987, the City of Nanaimo did not implement the tax until 2014. According to the city’s finance department, the tax has generated $2.5 million in net revenue since 2015.
The Nanaimo Hospitality Association is supportive of the proposed tax increase, according to a city staff report, which notes that the proposed three per cent tax rate is the same as other communities in the province and that the city has entered into a five-year agreement to allow the hospitality association to administer MRDT revenues.
Tourism VI speaking about the rationale for an increase in the tax. Says it will be used to continue to support tourism services. Tax helps inform market research etc.
— Nicholas M Pescod (@npescod) September 17, 2019
As part of the city’s application to Destination B.C. for a tax increase, a five-year strategic business tourism plan created by the Nanaimo Hospitality Association and Tourism Vancouver Island is being submitted.
According to the plan, which includes an analysis of tourism in Nanaimo and is available on the city’s website, Nanaimo is becoming recognized as a “vibrant and unique destination” for tourists and is “emerging as a must-visit destination” for indigenous cultural experiences.
Some of Nanaimo’s strengths, the plan notes, include its central location, conference facilities, outdoor recreation opportunities and “well-cultivated” local craft beverage and food scene.
However, the plan also notes that Nanaimo’s weaknesses include “unfavourable” perceptions of the city as a destination, a lack of resident pride, a lack of signature experiences as well as off-season and shoulder-season product and “costly” transportation in and around the community.
Achieving a five-per cent average in annual hotel occupancy, achieving a 10-per cent average shoulder season occupancy in hotels and motels, and developing one to two new events in Nanaimo by 2025 are among the goals laid out in the hospitality association’s plan. Strengthening the relationship with the Snuneymuxw First Nation and supporting them in the development of “authentic” indigenous tourism experiences is also highlighted in the plan.
Councillors have passed the MRDT tax increase. Tax goes from 2 to 3 per cent pending an approval from Destination BC.
— Nicholas M Pescod (@npescod) September 17, 2019
During Monday’s meeting, Callum Matthews, director of destination development at Tourism Vancouver Island, told councillors increasing the tax by one per cent is a good idea because it will help fund marketing campaigns and other tourism-related initiatives, which ultimately will lead to increased tourism in the city.
“Tourism is one of the leading economic drivers in the province and ultimately being able to promote Nanaimo in a more competitive fashion will bring more economic and social benefits to the city,” he said.
Matthews also spoke at length about the five-year plan. He said one of the key goals of the plan is to increase tourism during off-peak season.
“Our accommodation properties have excellent occupancy rates; that said, outside that peak season, occupancy rates leave something to be desired,” he said.
Under the plan, Tourism Nanaimo’s website will be significantly improved in an effort to create a better “consumer” experience, said Matthews.
“Ultimately, the focus there is to get folks to use the Tourism Nanaimo website to actually flip through and make direct bookings with property owners and activity operators,” he said.
Also part of the plan, according to Matthews, Tourism Vancouver Island intends to begin hosting monthly round-table meetings with operators in the city.
Matthews said in order to increase Nanaimo’s profile as a tourist destination, collaboration with stakeholders is needed. He said the five-year plan calls for increased collaboration, which will ultimately lead to more bookings and tourism in Nanaimo, particularly during the low season.
“We know that through focused and collaborative destination marketing and work on the sport tourism and business tourism side of things we can incrementally fill accommodation properties in those softer months and ultimately increase the benefits of tourism to the Nanaimo community,” he said.
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