As of this week, visitors and staycationers at Metro Vancouver’s hotels are paying more for their overnight hotel stay.
After receiving approval from the provincial government, a tax on hotel guests that supports Tourism Vancouver’s initiatives was raised from 2 per cent to 3 per cent on September 1.
However, much of the new revenue raised will go towards Tourism Vancouver’s debt for its share of funding the construction of the Vancouver Convention Centre expansion.
Completed in 2009, the landmark building cost $883 million to construct, with $540.7 million from the provincial government, $222.5 million from the federal government, $90 million from Tourism Vancouver through debt repayment, and the remaining from the convention centre’s revenues.
The convention centre expansion has become a major driver for tourism and overnight stays, allowing Vancouver to host a number of major conventions and events that stimulate the local economy.
But with the provincial government charging a high 6.1 per cent interest rate, the tourism agency’s convention centre debt has actually grown to over $100 million despite millions in annual repayments, B.C. NDP tourism critic David Eby told CKNW. The provincial government borrows money at four per cent.
Eby, who could not be immediately reached, also said the high interest rate costs the tourism agency about $2 million per year instead of going towards promotional initiatives and events that could provide a boost to the local economy.
There are about 14,000 hotel rooms within Tourism Vancouver’s jurisdiction, generating $16 million in hotel tax revenue each year.
According to CTV News, a hotel tax on rentals through Airbnb is being contemplated given the potential revenue that could be created from 3,500 suites within the City of Vancouver alone.