Windsor city council to consider 4 per cent hotel room tax for customers
Windsor city council will decide Monday whether to begin imposing a four per cent tax on the cost of rooms at hotels, motels, Airbnbs and bed and breakfasts.
The reasoning behind the proposal is to generate money for tourism.
"Many of our other competitors are going to be doing it," said Gordon Orr, CEO of Tourism Windsor Essex Pelee Island.
In a report to council prepared by the deputy treasurer, it says a "municipal accommodation tax program" could bring in approximately $2.8 million in revenue a year.
Half of that would go to fund the city's portion of the annual budget of Tourism Windsor Essex Pelee Island (TWEPI), giving it a $400,000 increase to its operating budget.
The report says the $923,000 the city is currently paying TWEPI annually would go into a reserve account, which the tourism entity could tap into to fund bids for big events, sponsorships and marketing promotions.
"It's going to give us increased revenue to be able to market and promote the area as a tourist destination and the money would be reinvested into tourism related products to help the industry that helps support 16,000 people," said Orr.
Items exempt from tax
The tax would not apply to complementary rooms, rooms paid for by way of internal loyalty or reward programs, stays that are longer than 30 days and ancillary charges for things like wet bars, internet and phone charges.
The tax would also not apply to emergency accommodations provided by the city and upper levels of government, treatment facilities, houses of refuge and emergency relief provided by charitable services.
In the city's consultation with hotel owners, they found the businesses want assurance the money will go to fund tourism initiatives. They also want to know how the money is spent.
'A steep ask'
But some hotel owners are leery of the tax, worried it would deter visitors.
David Patel, the owner of the Super 8 Motel on Dougall Avenue, doesn't want to see a four per cent tax imposed right away.
"It will be a bit of a steep ask at the start," he said. "But if it starts with two per cent ... to promote tourism and activities in the city then yeah. We've been paying these kinds of taxes when we've been going to Las Vegas or Niagara Falls," said Patel.
Orr brushed aside the idea that such a tax is a disincentive to tourists.
"Everyone's doing it. No one's going to travel to Windsor-Essex because of the fact we're not charging four per cent tax on a hotel room," said Orr. "They're going to come here because you give them plenty of reasons why they want to visit."
The report to city council says a number of municipalities in Ontario all charge four per cent — Ottawa, Toronto, Mississauga, Brockville and London. Niagara Falls charges $2 per night for occupied rooms.
Mixed reviews from guests
Whether consumers think the tax is a good idea or not will depend on who you ask.
David Boyle, a salesman from Brantford, is staying at Holiday Inn.
"We have budgets we have to cover and with the increase in gas anymore and with the rooms adding four per cent more you're going to start looking for competitive rates that's for sure," he said.
Windsorite Kevin George who was also a guest there thinks it's a great idea.
"Getting people to come here, especially from the states, it will allow people to come over here a little bit more," he said.
If approved, the tax will come into effect Oct.1 this year.
