Best Western Voyageur Place Hotel owner Marek Dabrowski does not like the prospect of an extra tax from the Town of Newmarket.
With the town exploring a municipal accommodation tax on hotels and short-term rentals, Dabrowski said he is concerned about the competitive disadvantage it could put him in versus hotels in neighbouring communities that lack the tax. He also questioned whether the tax would bring in enough dollars to be worth that downside.
“We are competing in this small market with properties in Aurora and with some hotels in Bradford,” he said. “We will be affected negatively.”
Newmarket is considering creating a municipal accommodation tax that could apply to hotels and short-term rentals like Airbnb. The tax is in place in 45 Ontario municipalities, with provincial law requiring that 50 per cent of the revenue go to a designated tourism organization. All those municipalities have an established levy rate of four per cent.
No final decisions on the tax have been made for Newmarket, but town staff plan to gather feedback and report back to the council later this year.
“Given the current economic climate and financial pressures facing municipalities across the province, a significant number of municipalities have now implemented a MAT (municipal accommodation tax) program,” a staff report said. “Should Newmarket implement a MAT program, the revenue generation has the potential to be significant.”
The report estimates that Newmarket could collect $600,000 annually with the tax. But there is public consultation to come, and staff said there is work to be done to determine how such a tax would be best implemented.
The town would also have to determine whether to create its own designated tourism organization or fund something already existing. Regardless, the town said there is a lot of value in promoting tourism.
“There is tremendous potential to draw tourists in to experience the exceptional events, partake in a strong culinary scene and enjoy the natural beauty,” the staff report said.
But Dabrowski expressed skepticism about the town being able to draw collect $600,000 from the tax annually, based on his knowledge of hotel revenues in the area.
Given that, he said though there is some appeal in promoting tourism, he questioned if the tax could provide enough dollars to achieve much.
“The idea of helping tourism is great. The issue is will it be worth doing (based on the dollars collected)?” he said.
These were views Dabrowski said he expressed when the town first took a look at this tax in 2019. He has previously served on the town’s economic development advisory committee.
Newmarket Chamber of Commerce president Chris Emanuel said it would be important for the town to show the tax will have a positive impact. But he added tourism promotion can bring in more people, and the chamber’s own efforts to do that through its Explore Newmarket program have yielded good results.
“We advertise in other communities. That has an impact on day trips to Newmarket,” Emanuel said. “They’re shopping regional stores, restaurants, staying in hotels, supporting other industries.”
Although neighbouring towns like Aurora do not have the tax, Markham and Vaughan have also implemented municipal accommodation taxes. Markham established a non-profit tourism organization, Destination Markham, which receives a 50 per cent share of accommodation tax revenue.
A 2022 annual report from Destination Markham said it has been able to promote shopping locally and have a variety of marketing campaigns, creating significant increases in social media and website visits for the organization. For instance, in 2022, it had a 75.5 per cent increase in unique visitors to visitmarkham.ca, with 148,952.
As Newmarket consults on the matter, Emanuel said they would listen to all their chamber members about the issue.
“We’re just going to make sure we look at how the town is measuring success, and part of it is, there’s potential also for the town to support initiatives like ours,” Emanuel said. “There’s definitely room for spending on tourism to drive day trips to Newmarket.”
