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.