Legislation will be introduced to allow regions to vote for a Regional Tourism Levy beginning in 2012.  The legislated levy within a Regional Tourism Organization (RTO) is designed to replace the DMF funding and enable a region to generate additional funding to support its marketing activities.  If passed, all accommodations of four rooms or more in a RTO’s region will be required to add the Levy to guest room charges.  The Levy can vary from 1 to 3%.  Voting is based on the choice made by the majority of accommodation properties (four rooms or more) within a RTO.

Many see issues arise due to competiveness as the HST alone will take guest room taxes to up to 13%.  Many others are endorsing and welcoming the legislation as it is an option to support a DMO’s funding in the absence of DMF.

ORHMA’s Position 
The legislation offers an option available to the industry to support a RTO’s promotional activities but more, much more need to be reviewed in order for industry to buy into it. The industry had a solution to an industry problem of promoting a destination in the Destination Marketing Funding (DMF) program initiated in Toronto in 2004 followed by Ottawa and then followed by many jurisdictions across Ontario and with many more waiting for a roll out, before this program was crushed up and shut down on July 1st 2010 due to implementing the Harmonized Sales Tax (HST). The ORHMA is pleased that the government offered the three year transitional funding support to the previous DMF jurisdictions. The legislated option to add an additional levy (or fee) on a guest room rate to generate promotional funding is welcomed by some accommodation operators but many more are reluctant due to the higher extended tax rate  and have demand shortfall fears. The ORHMA believes that destination funding has merit and will pay back rewards to the local industry but the government needs to re-focus on this issue in order for a levy (or fee) to be adopted throughout the industry.  Accommodations are reluctant to add a levy (or fee) unless the funding directly benefits their destination especially in light of the size of most Regional Tourism Organizations (RTO’s).  Importantly the ORHMA has called for a reduction in the guest room 13% HST in order to offer the hotel operator a competitive advantage  in charging the levy (or fee).

Update with Developments:

• Distribution of funding within a RTO is yet to be defined 
• Questions arise if a Volunteer DMF will be allowed in a DMO if a levy is voted down within the RTO. Mechanics on this item are yet to be defined.
• Detail announcements of the Regional Tourism Levy have been held back till the 2011 autumn