With hotel tax, DMF needs to go away — for good

Fourteen years after it created this mess, the province finally gave Niagara Falls a way to clean up the mess known as the Destination Marketing Fee.

Whether the city’s tourism industry complies — or simply finds a new way to soak tourists for this shady fee — is still up in the air. Which is ridiculous. There is no more excuse for the confusion and resentment this fee has created in recent years.

Last April, the province gave municipalities the green light to impose a hotel tax. It was to presumably replace the notorious DMF, which the province introduced in 2004 at a suggested rate of three per cent, applied to hotel rooms, with the money going towards a non-profit organization to spend on tourism and marketing.

Needless to say, that didn’t happen. CBC’s “Marketplace” didn’t do three separate reports on this fee because it was going great.

Three per cent became 10 per cent at some hotels. At some businesses, the fee was added to meals, parking and even coffee. And it was never directed to a tourism agency — all funds collected were kept by the individual businesses. They insist it was spent on tourism, but there was no transparency. No one, except the business owners, could say for sure what it was spent on.

It created plenty of resentment among locals and tourists alike.

The hotel tax, which Niagara Falls council approved at its Tuesday meeting, will replace the DMF with a $2-per-night hotel tax beginning Jan. 1. The funds will go towards the newly created Niagara

Falls Hotel Association, which will spend it on tourism promotion and destination marketing. A group that should have been formed 14 years ago, but better late than never.

Here is a chance for the tourism industry to make amends and be completely transparent after 14 years of collecting a highly questionable fee, which many tourists — according to some angry online posts — were told was a legal tax. It wasn’t.

But after years of collecting this extra cash, will the city’s hotels give it up easily?

Compare $2-per-room to a 10 per cent DMF on a $350 hotel room. That’s a steep difference, and one that’s hard to forfeit. Which is why there will be no surprise if the hotels introduce a ‘resort fee’ the day they’re no longer allowed to charge a DMF. It will be the same thing under a different name, and with no provincial oversight — again — they can charge what they want.

This could create a scenario where guests now see two extra charges on their bill. Are we fixing one problem by creating another one?

There’s also the concern, raised by city Coun. Carolynn Ioannoni, that the DMF will still be applied to non-hotel amenities like meals and coffee. Tourists who discover these fees feel gouged, and rightly so. It’s an embarrassment to Niagara Falls, and as Mayor Jim Diodati said Tuesday, “the city is not going to be supportive of anyone other than the hotels charging a fee.”

But until the province actually steps in and abolishes this fee in all forms, it’s hard to see it going away. An extra 10 or 15 cents on a coffee — or $3 or $4 on a meal — will go unnoticed by most tourists. Add that up over a summer, and it’s a significant amount of money.

Legal? Yes, for now.

Moral? It never was.

The province needs to stop making the city do its dirty work and fix this farce once and for all.

Here is a chance for the tourism industry to make amends and be completely transparent after 14 years of collecting a highly questionable fee