Bed tax
A tax that rewards success?
LESLEY MACKAY, OTTAWA TOURISM’S VICE-PRESIDENT
FOR MEETINGS AND MAJOR EVENTS, FOLLOWS UP ON CMW’S
PREVIOUS EDITION’S BED TAXES COVER STORY
ast issue’s bed taxes article
(CMW 99) raises some
interesting questions about
an income stream that
many people and organisations find
troubling.
However, a close look at the numbers
show that there is a compelling
argument for such a tax. In fact, here in
Ottawa, Canada, where we host more
than 11m visitors per year and generate
CAD$3bn (US$2.24bn) in economic
output for the city, the tax is a real
confidence booster, allowing us to
expand our offering and grow our profile
on the global stage.
In 2017, the Canadian province of
Ontario passed legislation to allow
municipalities to implement a Municipal
Accommodation Tax (MAT).
Consequently, as of 1 January, 2018,
Ottawa Tourism, the destination
marketing organisation of Canada’s
capital city, welcomed the change as it
replaced a 3% voluntary Destination
Marketing Fee (DMF) collected by
hotels representing 90% of the city’s
room inventory with a new 4% MAT.
The challenge with the DMF was its
fragility, at any point, a major player
might have pulled out and the whole
thing would have crumbled. The fact that
no one did is a testament to the close
alignment of our accommodation
partners, led by the Ottawa Gatineau
Hotel Association.
The new 4% MAT, which was enabled
and decided upon at a local level, is
compulsory for all transient
accommodation providers, excluding bed
and breakfasts and other short-term
Municipal
Accommodation
Tax (MAT) it is
a funding model that
rewards success
accommodation providers with four
rooms or fewer, and provides clarity,
certainty, and a level playing field for
hoteliers, as well as for Ottawa Tourism
in its efforts to promote the city
domestically and internationally.
Most importantly, the funds generated
are invested back into Ottawa Tourism’s
marketing, conventions, travel trade,
sports tourism, and media relations
programmes. Additionally, a quarter of
the tax revenues are earmarked
specifically for destination development
Above:
Cover image
of the 99th
CMW issue
Right:
Lesley Mackay,
Ottawa Tourism’s
Vice-President
for Meetings and
Major Events
ISSUE 100
initiatives which enhance the appeal of
Ottawa as a destination, ensuring that
the visitor experience and offerings
result in positive word of mouth and
repeat visitation.
The knock-on benefit to this structure
is that visitors who spend their
out-of-town dollars in the community
and boost the local economy are also
reinvesting and, therefore, elevating the
amenities, services, and experiences that
make Ottawa a great place to visit, work,
and live - both for visitors and for
residents. It is fundamentally generating
community wealth through tourism and
it is a funding model that rewards
success.
Coming off a record-breaking
tourism year in 2017 - when Canada
celebrated the 150th anniversary of
Confederation, with Ottawa leading the
year-long celebrations - Ottawa
Tourism’s strategic plan has those
numbers as the
baseline targets
by 2022. The MAT
is crucial to
achieving that
vision as we
confidently plan for
the future.
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CONFERENCE & MEETINGS WORLD
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