City will tap new fund for tourism promotion

With Council approval, Hamilton will set up a corporation that will allow it to collect a four percent fee on every hotel room rental. The money will then go into a pool that will be used to promote tourism in Hamilton. A staff report says the money will be collected and paid to the Ontario Restaurant, Hotel and Motel Association (ORHMA) who will distribute it back to the municipalities. The municipalities must spend 50 percent of the funds on tourism promotion.

The staff report estimates  It  is  anticipated  the Municipal Accommodation Tax (MAT},  levied  at  4%,  would generate approximately  $2 million  in  annual  new  revenue to  the City  ($1  M  per  year going to general revenue and $1 M per  year for tourism promotion)  based  on  licensed accommodation stock  and performance before the COVID-19 pandemic  in 2020  and  2021.    This  revenue could grow  to $3  M  in the  long-term  if  projected new  hotels  become  operational  and short-term  rentals  are  licenced  and  taxed by  the  City. The collection policy will apply to bed and breakfast operations as well as hotels and motels.

To be able to start receiving the funds the city must set up a separate corporation whose directors would be city staff. Some of the funding may be used to offset costs in the city’s tourism division.