Is Tourism Burlington about to get access to significant funding to promote the city ?

News 100 blueBy Pepper Parr

December  20th, 2019

BURLINGTON, ON

 

When Myles Rusak appeared before a Council Standing Committee last week he set out some of the Sound of Music (SOM) longer term thinking and the objectives they had in mind. He was short about $40,000 of the budget he needed to accomplish the bigger plan.

Myles Rusak 2

Myles Rusak, Sound of Music Executive Director pitching City Council for financial support.

He explained to Council that it was going to take the SoM a couple of years to get some realistic lift-off and asked Council for the $40,000 + each a year for three years needed to meet the SoM long term plan. Rusak said that he thought the funds could come from the Municipal Accommodation Tax that is expected to come into force early in 2020.

Mayor Marianne Meed Ward didn’t see it quite that way. She commented that council will decide where any MAT money goes.

Rusak had suggested that the SoM might get attached to the Municipal Accommodation Tax (MAT) that municipalities can now impose.
This new tax would apply to hotel and motel rentals. The first serious look at the tax suggested that an estimated $750,000 – $1 million of annual revenues in Burlington. 50% of that would go to Tourism Burlington – the balance would go to the city to be distributed as they saw fit. Sound of Music wants to be on that gravy train.

The tourism people are certainly onside. In March the Tourism Burlington Board of Directors unanimously approved the feedback received during stakeholder consultations. Those recommendations include:

The Board of Directors supported the adoption of a 4% Municipal Accommodation Tax on the assumption that the core funding support from the City of Burlington for Tourism Burlington remains in place and that the MAT funding be considered incremental.

From 2007-2010 the Burlington Hotel Association collected a voluntary Destination Marketing Fee (DMF) with the goal of increasing visitation to the city and overnight stays.

The City has a Tourism Service Agreement with Tourism Burlington that was put in place in 2015:

The goal of Tourism is to reduce its dependence on funding from the City. All acknowledge that the receipt of funding from the City is essential to the performance of the business and responsibilities of Tourism provided for under the Agreement.

Tourism - centre

Tourism Burlington has an Information Centre with all kinds of material and staff that will answer questions.

Tourism works independently and co-operatively with the City to reduce its dependence on funding from the City and secure its own revenues by way of soliciting sponsorships and donations to provide and support the tourism undertakings and responsibilities herein.

The annual operating grant provided by the City to Tourism will not be reduced as a result of any participation by Tourism in any destination marketing program implemented in Burlington which may provide funds to Tourism for any new or enhanced initiatives beyond the scope of services provided hereunder.

A continued commitment by Municipal Council to a sustainable and predictable source of core operating funds for Tourism Burlington will enable Burlington to become a more significant participant in a very competitive tourism sector. By continuing to provide core funding, monies generated through the Municipal Accommodation Tax would bolster tourism promotion and development opportunities that would not otherwise be possible if Tourism Burlington was restrained by its existing annual operating budget.

Replacing Tourism Burlington’s core funding allocation from the City of Burlington with the revenues generated from the Municipal Accommodation Tax would merely maintain the status quo and would not achieve the intended purpose of the legislation which is to grow the tourism sector in the municipalities that adopt the accommodation tax.

The municipal portion of the MAT would be allocated to destination development initiatives that will be beneficial to visitors and residents.

The provincial legislation allows the remaining MAT funds can be retained by the municipality. Since this money is generated through accommodation room revenue, the remaining funding should be set up as some type of reserve fund to assist with destination development/ tourism capital projects and initiatives.

Tourism magazine

Tourism Burlington publishes a Guide for Visitors to the city.

Economic development stakeholders and the City would work together to develop fund parameters and criteria to ensure return on investment and community benefits. The accommodations interviewed strongly support this approach. It is imperative to see growth in hotel occupancy and revenue particularly with new properties opening in the area over the next few years increasing competition.

The Bridgewater will at some point actually open and the hotel that is part of the development will want to be very active in promotions.

The Waterfront Hotel has plans to demolish the existing structure and build something much bigger and much higher. These two hotels will add significant capacity to the city and will add to what is collected in the way of the Accommodation tax.

Short-term rental (STR) accommodations such as Airbnb, HomeAway, will also collect the MAT.

During discussions with the local accommodaters they unanimously recommended that all accommodations be included so that it would level the playing field. It is recommended that short-term rentals be Phase 2 of the MAT plan as it will take time to negotiate agreements with the various companies. At a recent industry forum on MAT it was suggested that before agreements are established with STR that municipalities consider updating their by-laws. For example, some cities have restricted short-term rentals to principle residences.

Bridgewater from the west - higher elevation

The Bridgewater development includes a hotel – that will at some point will open.

Tourism Burlington will develop an integrated strategy for the MAT funds that will include the development of guiding principles, identification of target audiences, performance measures and strategic partnerships to ensure return on investment for the local tourism industry.

Tourism Burlington worked in conjunction with the Hotel Association, the Marketing Committee and Board to develop a comprehensive DMF marketing plan which included campaigns, sales missions and incentives.

Babes at parking meters

Burlington’s parking meters are a challenge for any visitor

Regional data sets out the extent of tourism in Burlington.

Total visitor spending $303.5M ($101M Burlington)
Total person visits 4.3M (1.4M Burlington)
25% are overnight visitors
87% of overnight stays are with friends/relative

Purpose of trip
64% are visiting friends & relatives
22% pleasure trip
6% business/conferences
5% shopping
Average nights stayed 2.1
Average age: 44.8 years

Burlington at one point had a Visitor Information Booth in Spencer Smith Park – 1970. In 1985 the city worked with local tourism partners to formally strike a Visitor & Convention Centre Board. This non-profit organization evolved to become Tourism Burlington (TB) which was incorporated in 2005 and is overseen by a volunteer board of directors.

Waterfront hotel with pier at foot

Waterfront hotel – due to be demolished and replaced with something a lot taller.

TB is funded by and has a service agreement with the City of Burlington. Other sources of revenue include federal and provincial grants primarily for summer students, cooperative marketing initiatives such as their guide, maps and sale of souvenirs.

TB has 3 FTE’s who are supplemented with part time weekend and summer travel counselors and over 1,000 volunteer hours. There are 1,889 tourism businesses and 24,491 tourism jobs in Burlington.

There is an opportunity to grow tourism in the city – it will be interesting to learn what Tourism Burlington plans to do going forward – they are going to have close to half a million dollars to spend so the problem will not be funding. To bring about real tourism growth the TB will have to be very creative – something we have not seen all that much of from the tourism people.

City Council did give the Sound of Music the $40,000 + they needed for 2020, but the funding was just for the one year. They will have to come back next year with their hands out.

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