Destination Cape Breton wants to increase the tourism marketing levy from 2% to 3% but wants to first see what the provincial government is going to do.
CEO Terry Smith told last night’s regular monthly meeting of Port Hawkesbury Town Council
Cabot Trail (Destination Cape Breton photo)
that the fee is charged to fixed roof accommodations, and properties with 10 or more rooms.
In recent years, entities like Airbnb and VRBO have been getting a larger share of room rentals, growing from 7%of registered room nights sold in 2020 to 30% last year, and because most have less than 10 rooms, they are exempt from the levy, the CEO said.
Along with the pandemic, Smith said levy revenues have “been significantly” impacted in recent years. He explained that after Enterprise Cape Breton Corporation was eliminated and the Atlantic Canada Opportunities took over, ACOA decided to reduce their funding by $100,000 per year.
To cut costs, DCB moved their offices into the former Visitor Information Centre in Sydney River and reduced staff from 11 to nine, and took other steps, like using technology to work smarter. Although there has been a “decade of growth” in tourism, Smith said they are “heading for a cliff” financially.
In 2021, DCB hired a consultant which recommended that the marketing levy be increased noting that HRM is moving to a 3% rate, PEI has a 3% levy, New Brunswick is at 3.5%, and St. John’s is 4%.
Smith said applying the levy to all fixed roof operators, including those with 10 rooms or less, is a “question of fairness” since smaller operators are benefitting from their marketing but not paying the levy. He said this would add about $250,000 to $350,000 to their budget.
Since some visitors are already booking for 2023, Smith suggested the new levy take effect in January, 2024. In addition to spending money on marketing, operators suggested that DCB help address workforce shortages.
After meeting with provincial government officials yesterday morning, Smith said he was told there is an appetite for eliminating the patchwork of legislation across Nova Scotia and enacting one levy.
Before proceeding with the levy hike, Smith suggested municipalities in Cape Breton wait and see what the province does, and council agreed to hold off in their support of a higher levy.