With negotiations completed on how to disperse the town’s room tax proceeds, Niagara-on-the-Lake’s destination marketing organization is looking to get back to business as usual.
It’s been almost a year of back-and-forth over how the town and its marketing group will each get its 50 per cent share of the new tax collected on behalf of the town.
The 2 per cent tax, which took effect July 1, 2022, is charged to guests at hotels and other short-term accommodations.
A contract that sums up the rights and responsibilities of each party was greenlit by council at a meeting on Tuesday night.
The contract, included in the meeting’s agenda material, had an attached staff report summarizing the deal.
All told, the town and tourism agency will split more than $1.1 million in room tax revenue.
The town has collected about $720,000 from the room tax in 2023. Almost $360,000 of that will go to Tourism NOTL.
In 2022, the town collected more than $453,000, of which about $227,000 will also go to the agency.
The room rate is scheduled to rise to 3 per cent in January and be extended to bed and breakfasts and cottage rentals.
“We look forward to a good and collaborative working relationship with the town,” said Minerva Ward, the president of the Tourism NOTL.
The marketing group, a subsidiary of the Niagara-on-the-Lake Chamber of Commerce, has been waiting on the town to distribute the tax proceeds for a year and a half now.
“It should have happened at the same time the (municipal accommodation tax) was passed (in 2022),” Ward said.
“It’s not public money. It’s not taxed. It’s not normal taxpayer money.”
The purpose of the room tax is to help the town pay for marketing programs and infrastructure that benefit the tourism industry.
Ward said Tourism NOTL has continued to advertise the town to would-be tourists despite not yet having access to its share of the accommodation tax.
She said the Chamber of Commerce kept Tourism NOTL’s marketing initiatives afloat while the negotiations were playing out.
Ward, who leads both the chamber and the marketing group, said Tourism NOTL would be able to move forward with a few new projects now that the money is being remitted.
“We’re finally here and we can get on with the work,” she said.
Tourism NOTL has a five-year marketing strategy, Ward said, which includes an update to its website and a branding campaign for the town.
“The tourism website is sort of mixed up with the chamber’s website,” she explained.
With funds finally coming in, she said she’d be able to deliver a new site for Tourism NOTL, “something that’s clean, visually appealing, easy to use, and so on.”
The new site also would be used to display digital and photographic content.
“Marketing is driven by content,” she said. “We’ve tried to create some in-house, but we really need proper content that we can then use on our website or social media.”
While council endorsed the contract with Tourism NOTL, it did so with a couple of conditions, one being that Tourism NOTL have its own board of directors, distinct from the chamber.
Coun. Maria Marvridis pitched this amendment, saying she was hoping to ease the anxieties of some councillors who were “still not convinced on supporting this transfer agreement.”
Ward began legally separating Tourism NOTL from the chamber earlier this year to satisfy council’s concerns about financial transparency.
The contract also allows the town to review the room tax finances of both the chamber and NOTL Tourism.
This clause was not typical of a transfer agreement, Ward said.
She said the town probably wanted to double-check that the expenses incurred by NOTL Tourism while waiting for the room tax to be remitted could, in fact, be charged to it.
The contract was endorsed unanimously, though Lord Mayor Gary Zalepa and Coun. Erwin Wiens were both absent from the meeting.