DMF (Destination Marketing Fee) Steering Committee
In partnership with accommodation providers from around the province, TIANB led the lobby effort with the provincial government for the implementation of an enabling legislation for the collection of a Destination Marketing Fee (DMF).
Following 8 guiding principles developed in consultation with the industry, the goal was to:
• Protect collection mechanism already in place in NB and provide those collecting groups with an authority to collect, manage and invest the funds generated.
• Providing a clear and transparent mechanism to preventing consumer confusion.
The 8 guiding principles are as follows:
1. Marketing Levy funds will be used for tourism marketing purposes only;
2. The Levy is applied only with the support of a minimum of 51% of total eligible licensed units in the municipality or region concern;
3. The percentage (%) rate of the Levy and size of the operation to which the Levy applies should be consistent across the province;
4. The Marketing Levy shall not replace municipal and/or provincial funding to Tourism;
5. Funds generated by the Levy would be new tourism dollars and should not be used as replacement dollars by the introduction of a bylaw;
6. The Tourism Marketing Levy is proposed to be % of room rate;
7. Any provincial legislation is to incorporate limits requiring renegotiation at the local level every five years;
8. That the province of New Brunswick consults TIANB as the legislation is being developed.
By rallying support in all jurisdictions and by providing a single and strong voice on this issue, TIANB was able to bring this project to the attention of the Premier's office, the Department of Finance, the Department of Local Government and the Department of Tourism & Parks.
In April of 2010, TIANB was informed by TAP that the Government of New Brunswick was not recommending the provincial standardization or regulation of destination marketing fees or a hotel levy, stating that:
• It has been confirmed that enabling legislation is not required for Destination Management Organizations (DMOs) to have the proper authority to levy or spend funds for this type of arrangement.
• To enact provincial enabling legislation for the regulation and standardization of a hotel levy would require a more thorough review of the options related to governance and appropriate guidelines for monetary and spending considerations. The identification of regions would likely be a factor and the application of fairness to industry players would need to be a key principle for a level playing field.
• A standardized or regulated process would also require coordinated oversight and would result in new management costs that the province is not currently in a position to implement.
• During its most recent budget consultations, the Government of New Brunswick heard from citizens that they had neither the appetite for increases in consumption taxes nor the introduction of any new consumption taxes. According to 2009 NB accommodation occupancy reports, nearly half of all accommodation room nights sold in the province were sold to residents of New Brunswick. Government must take into consideration that a hotel levy could be perceived as a consumption tax and that it could have a significant financial impact on our citizens, not just visitors to our province.
• The status quo provides a legally viable means for a Destination Management Organization or association of appropriate organizations to levy a fee on accommodations and determine the expenditures of the funds. Therefore, the Government of New Brunswick is not currently recommending the provincial standardization or regulation of destination marketing fees or a hotel levy.
