Tourism operators in Alberta have concerns over changes to the way the provincial hotel tax is split between Travel Alberta and the government.
Over the past five years a memorandum of understanding between the Crown corporation and the provincial government saw that split go 80 per cent to Travel Alberta and 20 per cent to Tourism Parks and Recreation.
But this past year the government changed that ratio to 70/30 and it had those attending the recent Alberta Tourism conference in Banff worried.
Calgary-based hotel manager Perry Walter asked a panel session with Travel Alberta board chair Rick LeLacheur, CEO Bruce Okabe and acting deputy minister of Culture and Tourism Shannon Marchand whether there is a grab going on for the money.
“By all accounts, the tourism levy has been a success,” Walter said. “The spirit of it is amazing and we are indeed the envy of the country regarding the model. I am very concerned about the stability of that model.
“We had a change in government and Tourism Parks and Recreation is no longer, but the ministry still receives funding from it. I’m concerned about where this is going. Is the genie out of the bottle? We definitely need to protect this.”
LeLacheur noted with the new cabinet shuffle the ministry was split, but both service areas received funds from the tourism levy, a three per cent surcharge on all hotel rooms in the province.
“The levy is important to all of us,” he said. “We have raised it with the minister and we understand some of the funds track to parks and we are concerned about that.”
Marchand said there is no intent to reduce the levy and with the budget process about to start, the question of where those funds end up in the department of Environment and Sustainable Resource Development will need to be resolved.
“I think for us a key guide to that is the levy has to be used for the upkeep of tourism infrastructure,” he said. “It is not about supporting marketing elements, the development of product, or attraction research.”
Even without reducing the levy, the concern during the question and answer session surrounded a further decreased percentage for Travel Alberta.
“There was no dollar decrease, but a percentage decrease, which everybody knows was in the MOU and was cut and the MOU is now broken,” Marchand said, adding he encourages everyone to talk to their local MLA about the issue.
A new agreement with Travel Alberta is needed and LeLacheur said the corporation has not signed it yet, as there are still ongoing discussions with the new ministry.
The levy in 2013-14 reached $87 million and has grown each year since 2009-10 when it was $59.7 million.
However, there was a call for a thorough breakdown of how the levy is used at all levels.
“I think what we are all looking for is an AGM on the entire tourism levy that includes product development and includes the marketing side, because that is where these questions are coming from today,” said Alberta Hotel and Lodging Association board member Dave Kaiser. “Truly, I think that is what industry wants. We have spent time in the last year building a framework, a framework that is supposed to be a strategy. I think we should have a full accounting of that strategy.
“That would give us transparency that would give us comfort we are getting ROI (return on investment) on the tourism levy.”
