Look out hotel owners — Iqaluit might want more of your money
City council’s economic committee ponders voluntary hotel fee
If some members of the City of Iqaluit’s economic development committee have their way, the city could soon ask Iqaluit’s hotel owners to pay a voluntary “destination marketing fee” to help promote tourism in the city, committee members said at a meeting Jan. 7.
To that end, the city is considering a framework for the Iqaluit destination marketing fee that they would present to city council.
The committee members have proposed the city collect a percentage — perhaps three per cent — from each hotel room bill.
But beyond confirming any fee would be voluntary, the committee has not decided on any other details.
“Its something we need to think about,” said the committee’s chair Coun. Kuthula Matshazi.
The extra money could be a welcome asset for Iqaluit’s new council, which has made fixing the city’s struggling finances its main objective.
Joel Fortier, a member-at-large on the committee, said if the city could convince hotels to pay the fee, the amount of money could be substantial.
He estimates the hotel fee could raise about half a million dollars a year.
“I calculated at 150 rooms at ten bucks a day, which is three per cent of $300 a night,” said Fortier, who estimated a 50 per cent occupancy rate annually for Iqaluit hotels.
The city would spend the money on advertisements and public works projects to clean up the city and entice tourists.
“We could improve the appearance of the city, city location signs, walking trails would improve, purchase and sell Iqaluit products which we really don’t have [currently],” said the community development officer, Joamie Eegeesiak.
The city could use the money to develop hotel information packages and video advertisements, she said.
Eegeesiak presented committee members with examples of similar marketing fees used in other cities.
“It’s a voluntary fee in the South, but people pay to build towards the future,” said Megan Pizzo-Lyall, the committee’s co-chair and a city councilor.
Eegeesiak said the city sent hotels a questionnaire about the fee in 2014, but the city administration never followed through.
Coun. Terry Dobbin, also a member of the committee, said previous attempts to implement this type of fee failed because most of Iqaluit’s visitors aren’t tourists.
“I would say probably 85 per cent of it is business travel that’s Government of Nunavut related, and that was the issue we ran up against the last time,” Dobbin said.
“The GN didn’t want to pay the fee because the greater portion of the people staying in hotels were GN employees.”
It’s also unclear at this stage how the city would collect such a fee.
The hotels will ultimately decide the proposal’s viability, Matshazi said.
“When we create this, its really in collaboration with the stakeholders — if it’s what the stakeholders want, if they see value in what we’re doing,” he said.
The next step, he says, will be to discuss the project with Muhamud Hassan, Iqaluit’s chief administrative officer.
The committee expects it will decide within the next six months on whether to make a recommendation to council on the voluntary hotel tax proposal.
The first Iqaluit City Council meeting of 2016 is scheduled for Jan. 12.