Tourism tax proposed to help market Muskoka

by Jacqueline Lawrence

Sep 12, 2007

Muskoka Tourism is hoping to deepen the pockets of the district’s tourism marketing budget by proposing a voluntary three per cent “tourism tax” on accommodations in Muskoka.

The proposal is just one of more than a dozen recommendations to come out of the agency’s recently completed Muskoka Assessment Project (MAP), a comprehensive review of the district’s tourism assets. The project, which surveyed over 1,000 businesses across Muskoka, was aimed at identifying the district’s strengths and weaknesses when it comes to attracting and sustaining tourism.

According to Robyn Scott, Muskoka Tourism general manager, the tourism tax or Destination Marketing Fee (DMF) was felt to be a good way to leverage added funds for tourism marketing. While it is unclear exactly how the tax would be implemented, DMFs are usually added as a three per cent charge onto a room fee.

“It is very common,” said Scott, noting that nine other Ontario destinations including Toronto, Ottawa and Niagara all have DMFs. Scott said the fee would be voluntary, and likely only include motels, hotels and larger resorts if implemented locally. Smaller operations, such as Bed and Breakfasts, could choose to participate in the program by contributing a flat fee.

Scott said monies raised through the tax would likely be managed by an organization with a board of directors, including representatives from Muskoka Tourism. Funds would be directed to specific marketing projects or programs, which would then be implemented by Muskoka Tourism.

If the majority of tourism operators get on board with the program, the DMF could help raise as much as $3 million for Muskoka’s tourism marketing budget, Scott indicated.

Many operators have already expressed support for the endeavuor, she said.

“We have seen some strong interest,” said Scott. “And really, it’s a win-win any way you look at it, because it will mean more revenue for marketing than we’ve ever had in the past.”

Currently, Muskoka Tourism receives approximately $250,000 annually from the District of Muskoka. Scott said most of the money, however, goes toward operational costs for the agency’s two visitor centres, on Hwy. 11 near Gravenhurst and on Hwy. 400 in Port Severn.

Any additional marketing monies are raised by the agency, she said.

The funding arrangement has resulted in a lack of overall marketing ability by Muskoka Tourism, and no strategic plan to guide tourism development across Muskoka. Both issues were also identified in the MAP project.

According to the survey results, while Muskoka’s main ‘products,’ including its lakes and resorts, continue to attract new visitors, the district is lacking when it comes to selling its unique ‘Muskoka’ brand.

Visitor stays and spending are down in comparison with the provincial average, the study found. In 2006, Muskoka’s commercial accommodation occupancy was pegged at 49 per cent, versus Ontario’s 65 per cent average. The average expenditure in Muskoka was also below the provincial average, at $36.97 compared to $62.56.

While marketing attempts have been made to counteract this trend, the MAP survey indicated a lack of synergy exists between various agencies working in tourism development. For example, some tourist attractions, such as the district’s arts and cultural assets, were overlooked and not marketed at all, the project found.

These and other issues, including Muskoka’s lack of skilled of labour and public transportation, mean the district likely cannot sustain or increase tourism into the future, the study found.

Scott said Muskoka Tourism is hoping to now create a Tourism Destination Development Plan, or strategic plan, to implement the recommendations of the MAP project and address these issues. The plan will involve a number of partnerships to help co-ordinate and clarify the role of each tourism agency.