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Kelowna hotel room tax to rise next year

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August 09, 2016 - 10:59 AM


KELOWNA - A tax levied on hotel and motel rooms in Kelowna will go up 50 per cent, from two to three per cent.

Council voted to increase next April the tax collected by members of Tourism Kelowna, which represents about 85 per cent of the Kelowna accommodation market.

Tourism Kelowna uses the tax, which raises about $1.8 million, to promote and advertise the city as a destination in foreign and domestic travel markets.

Known officially as the municipal and regional district tax program, it is remitted by hotel and motel operators to the province which deducts administration fess and gives the balance back to the city.

Kelowna forwards the money to Tourism Kelowna, which is under contract to provide the service, culture director Jim Gabriel told council.

In his report to council, Gabriel said staff are supportive of the increase but are recommending a pair of service agreements be written along with the application to the province for the tax increase.

One agreement would track hotel room tax revenues and expenditures in Tourism Kelowna’s budget and financial reporting while the other agreement would clarify the relationship between the two entities.

In addition to the hotel room tax, the city gives Tourism Kelowna an annual operating grant which last year was $344,000.

The current five year tax agreement the city has with the province expires in 2018 but an application for a rate increase can be submitted early.

Council approved the staff recommendation, which is expected to add over $914,000 to the marketing budget when fully implemented.

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News from © InfoTel News Ltd, 2016
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