A new voluntary hotel tax in the Red Deer area needs financial dollars to get off the ground, said several city councillors on Monday.
Red Deer city council was assured on Monday that the $75,000 they approved during 2011 municipal budget talks would actually go towards the development of this hotel tax program introduced on Jan. 1.
The concern was that Tourism Red Deer, the overarching body for these dollars, would use the $75,000 for various tourism-related initiatives and not directly towards ensuring the success of the Destination Marketing Fund (DMF).
This money was supposed to kickstart Red Deer’s tourism marketing plans, particularly when it’s expected this new hotel tax will take about a year to generate enough dollars for a detailed marketing plan. About nine hotels in Red Deer and Gasoline Alley are charging the one per cent levy on their hotel rooms. That amounts to more than half of all accommodations, or about 1,200 rooms.
Councillor Tara Veer said it’s important this hotel tax is sustainable.
“We didn’t use public funds to be used as a marketing grant but in the development of the DMF,” said Veer.
She said the money was to help the program get a lot more hotels and motels on board.
“There is foundational work that needs to be completed first,” she said.
Tourism Red Deer and the Destination Marketing Fund committee plan to act as one voice for tourism. Tourism Red Deer is a membership organization and operates under a fee-for-service agreement with the City of Red Deer.
Land and Economic Development Department manager Howard Thompson said the two bodies will deliver tourism-attraction initiatives based on a joint marketing plan.
Planning director Paul Meyette added this marketing plan will be “the attraction piece” towards getting more hoteliers on board with the program.
The key is to have a stable fund, said Councillor Cindy Jefferies.
“That structure is critically important,” she said.
Council decided that the one-time funding would proceed and be given to Tourism Red Deer. The money would go towards sustainable enhanced destination marketing, with the understanding the fund would be established with a clear set of objectives. A progress report will come back to council by the end of 2011.
Tourism Red Deer executive director Liz Taylor said she was pleased with council’s decision.
She said one marketing plan will be developed.
“It will have components that are part of our core business and then there will be enhancements that the Destination Marketing Fund will support and take beyond from whatever we could have done,” Taylor said.
ltester@www.reddeeradvocate.com