#5: tourism squabble

THURSDAY, 26 DECEMBER 2013 02:00 JOHN MOORHOUSE Penticton Herald
The ongoing dispute between City Hall and the Penticton Hospitality Association generated a lot of headlines over the past year. However, the story really began in 2012 when the city awarded a five-year contract to the PHA to handle the estimated $400,000 in hotel room tax (HRT) revenues collected annually for external tourism marketing. At the same time, council continues to allocate some $350,000 a year to Tourism Penticton for its own marketing initiatives and operating the Penticton Wine Country Visitors Centre. The first indication that all might not be well with the arrangement occurred this past May, when council invited PHA officials to discuss how they are spending Ð or not spending Ð the two per cent room tax revenues. Also attending the open council meeting were several supporters of Tourism Penticton. Tim Hodgkinson, PHA operations director, said although more than $330,000 collected last year had been carried over to 2013, the marketing season was not yet over and some advertising campaigns were in the works. This included a $35,000 donation to the new Challenge Penticton triathlon the next day. Efforts to resolve the dispute over the summer, including the involvement of a mediator, proved unsuccessful. Council then announced on Nov. 4 that it wanted out of the room tax deal. It gave the PHA 30 days to return all unspent taxation revenues to the city. "The city intends to transition the administration of the HRT funds to the Tourism Penticton Society and encourages the PHA to co-operate with an orderly transition to the new organization," the city’s legal firm stated in a letter to the PHA. "Clearly it is in the interests of all Penticton tourism stakeholders to ensure that as much of these HRT funds are spent on external marketing of the city as possible so that the accommodators and other tourism related businesses within the City of Penticton can thrive." The PHA refused Ð and hired its own lawyer to represent it in the dispute. “At this point, we donÍt feel weÍre in a breach of contract,” PHA president Rob Appelman said. Appelman noted the organization had spent about $325,000 on tourism marketing this year, including up to $60,000 for online advertising. Mayor Garry Litke later revealed the city has spent more than $21,000 on legal fees in the room tax dispute, including the cost of the mediation session in September. As 2013 draws to a close, all sides remain mum about what, if any, backroom talks may be underway.