Local hotels and motels will get less of a say in how tax money they generate is spent. This according to the Nanaimo Hospitality Association in an ongoing battle over the MRDT with the City of Nanaimo. (Dreamstime)

By Alex Rawnsley

marketing dollars

City & accommodators battling for control of Nanaimo hotel tax dollars

Apr 10, 2024 | 3:35 PM

NANAIMO — A standoff is brewing between the City and some local tourism operators over who controls and administers hotel tax revenue.

The Municipal and Regional District Tax (MRDT) is applied to short-term rentals like hotels and is designed to boost local tourism marketing, programs and events. For years, taxes collected locally have been handled by the Nanaimo Hospitality Association (NHA).

However, the City is pushing for Tourism Nanaimo to assume control of the money, about $1.2 million annually, effective Jan. 1, 2025, when the agreement with the NHA expires, citing the fact Tourism Nanaimo is responsible for destination marketing for the region.

Dan Brady, executive director of the NHA, said the potential transition is being done without full transparency and in a way which could largely shut out the operators who collect the money.

“In 2022, we offered to revise the MRDT agreement and move all of the MRDT dollars to the new Nanaimo society when it was being created, with one caveat: that the accommodation sector with our years and years of experience in tourism have the controlling number of seats on the tourism board.”

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The Tourism Nanaimo board of directors is a 15-member panel with representatives from the City, VIU, Nanaimo Airport, and Snuneymuxw First Nation, among others.

Three seats on the board are reserved for NHA members, including Brady as the current vice-chair.

He said they’re keen to negotiate, however accused the City of cancelling several meetings on short notice and holding no negotiations in the one face-to-face opportunity the two sides have had in recent months.

Past uses for the money collected via the MRDT have included feasibility studies into various initiatives including a new Nanaimo Art Gallery, Snuneymuxw First Nation cultural centre and a gondola on Mt. Benson.

Brady told a Nanaimo City Council meeting on Monday, April 8 the accommodation sector needs a majority say in how the money is administered and wants Nanaimo to mirror communities like Vancouver, Victoria, Whistler and Kelowna.

“What is common practice in the big DMO’s (Destination Marketing Organizations) such as Tourism Victoria…they administer the MRDT dollars. [But] the controlling number of seats on that board are the accommodation sector. That is common throughout B.C.”

Brady said they’ve spoken with enough accommodation operators to stop the change in how the MRDT is handled.

City’s Position
Mayor Leonard Krog told NanaimoNewsNOW it was the City’s right to make the desired changes come 2025.

He said the money should go to the organization in charge of promoting and marketing the region.

“These monies are collected from people who stay in Nanaimo as tourists, visitors or business people…they are collected from visitors and are to be used to market the city’s whole tourism sector. Surely Tourism Nanaimo is the logical vehicle to do it, not just the Nanaimo Hospitality Association who then get to decide who gets what.”

Krog said Tourism Nanaimo was not a strong, well-supported or reliable entity when the MRDT came into effect.

However, Tourism Nanaimo’s growth over the last five years into an “updated, modern and effective organization” positions it as the best path forward, Krog contended.

“It’s a reflection of the effectiveness of Tourism Nanaimo and the logic of this. We were the outlier in British Columbia. There are some that have a relationship with a local organization, but the vast majority of MRDT funds are administered by the same organization that is the destination marketing organization.”

Tourism Nanaimo’s board must still vote on the proposal before it comes into effect.

Presently, one seat on the board sits vacant with no representative from the food and beverage sector.

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