Hotel tax bump OK'd

By Wayne Moore - CASTANET Aug 9, 2016 / 5:00 am 
As expected, Kelowna council has rubber stamped a request to increase the city's hotel room tax from two per cent to three per cent. The measure, once approved by the province, is expected to come into effect April 1 of next year. The tax is administered by the city, with all funds going directly to Tourism Kelowna for outside marketing. Tourism Kelowna asked for the increase in order to increase marketing in Ontario, market the city in areas with high potential – such as the Western U.S. and Eastern Canada, and increase the city's exposure overseas in co-operation with provincial and national marketing organizations. Currently, Tourism Kelowna says these areas are beyond the reach of their current resources. Over the past 12 months, the hotel room tax brought in slightly more than $1.85 million. It's expected to realize an additional $231,000 over four months during 2016-2017 and $914,000 in 2017-2018. Coun. Luke Stack did ask whether it would have been wise to keep the room rate lower to attract more visitors. "Hotels have to agree to this, so we've met one-on-one with all of our properties and this hasn't come up," said Tourism Kelowna CEO Nancy Cameron. "We know when people are purchasing accommodation, they aren't necessarily influenced by the tax level of that destination. In fact, British Columbia, at two per cent, is one of the lowest provinces in terms of a hotel tax." She said aside from Nova Scotia and New Brunswick, the rest are at three per cent, or higher. Cameron said the rate can go as high as five per cent, while some provinces have a combination of a hotel tax and provincial tax. Tourism Kelowna has the support of 65.5 per cent of all accommodation providers, amounting to 84.4 per cent of rooms in the city. The requirement to increase the tax was 50 per cent on both sides. The city instituted the hotel room tax in 2004.