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Thursday 29 March 2018

Why it just became a whole lot more expensive to visit Toronto

The last time I visited Toronto I thought the hotels were extremely expensive. That will be even more the case now the City of Toronto is implementing a 4% municipal accommodation tax effective April 1 and on short-term rentals (read Airbnb) effective June 1.

A portion of this tax will provide funding towards Tourism Toronto to support the city’s tourism industry. The tax will also provide funds for the city to support programs and services, such as road repair, transit, police, economic development, culture, parks and recreation, allegedly facilities that visitors have the ability to take advantage of when they visit Toronto.

But it seems to me that the tax, known as MAT, will be more of disincentive in a competitive market place. There are a lots of great places to visit in Canada and while Toronto is a nice city, it is not on anyone's "must visit" list.

In a news release, Toronto officials said the tax will apply to all rooms used for rental accommodation for four hours or more and continuous stays of 30 days or less (so you'll pay the tax even if all you have in mind is a bonk.

Guests will have to pay the tax when they stay at full service, limited service and small hotels, as well as motels, hostels, private and fraternal clubs, and condo hotels.

Hotel guests will be charged the tax when they pay for their accommodation and the invoice will include a separate line to identify the new levy.

The hotel industry had argued against the tax in the past, noting operators already pay commercial taxes and deal with a number of regulatory issues. I think they are right.

The city expects to bring in some $16 million from the new levy - but how much vacation business will it lose to Vancouver, Montreal, Quebec City etc. And how much ill-will will it generate with visitors not expecting a 4% slug?

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