Nunavut Tourism weighs in on Iqaluit marketing fee

Nunavut tourism CEO Kevin Kelly talks to Iqaluit city councillors April 14 about a proposed destination fee that could be added to city hotel bills and then pooled to support Iqaluit tourism. (PHOTO BY STEVE DUCHARME)

Nunavut Tourism’s chief executive officer, Kevin Kelly, told members of Iqaluit’s economic development committee April 14 that the success of a potential “destination marketing fee” for visitors to the city hinges on effective training and management.

Committee members sought the advice of Nunavut Tourism as they continue to develop the framework around the “fee,” which was first proposed in January.

“We’ve done a lot of research surrounding destination marketing fees. I know they are something that are throughout the country,” Kelly said to the committee.

“If it’s something that the city is ultimately looking at implementing, my number-one comment is making sure the implementation includes training for the employees that will be on the front line talking with customers about what a destination marketing fee is.”

The proposed fee is effectively a small tax added onto every hotel bill, possibly three per cent, which would be collected by Iqaluit hotels and pooled into a fund to be used for tourism promotion or city beautification.

In a standard one-bedroom hotel suite at Iqaluit’s Frobisher Inn, that amounts to about seven dollars per night.

In a letter to Nunatsiaq News, Coun. Kuthula Matshazi, who chairs the economic development committee, said that any destination marketing fee proposed would be voluntary and rely on support from the city’s hotel industry.

The potential funds to be collected are no laughing matter: Coun. Terry Dobbin cited the success of the fee in Yellowknife, where that city collected $1.14 million from an estimated $38-million-a-year hotel industry.

According to figures presented in January, Iqaluit’s draw from the potential fund could amount to about $500,000 per year.

Iqaluit could benefit greatly from the extra money, Kelly told committee members.

“There are a lot of needs as far as ensuring that tourists have the proper signage they need, that their safety is paramount… I can certainly go on about the logistical issues that the City of Iqaluit is facing, but you have to come up with your priorities about what those issues should be,” he said.

Information for newcomers at the city’s airport can also be improved, Kelly said.

The next step for the city, he said, will be determining who controls the fund — city administration or the hotels.

Kelly said some cities allow the hotels to collect the fee and use it at their discretion, while others pool the money in a collective fund.

“The possibilities are huge, its just a matter of what avenue do you want to take,” he said.

Kelly said he would prefer the fee to be an industry-led initiative, but he doesn’t know if the hotels feel the same way.

“That will have to be a decision that the city and the hotels get together and meet on,” he said.

Dobbin reminded the committee that any proposed fee would have to get the blessing of the Government of Nunavut.

“This is not the first time a destination marketing fee has been discussed and debated,” Dobbin said.

“The issue before was the GN said most of the people staying in our hotels are GN employees and they don’t want to pay the three per cent.”

Matshazi asked Kelly if Nunavut Tourism would consider operating the fund on the city’s behalf.

“I would have to bring this forward to our board, it is something we have talked about in the past. It’s something we could talk about, it would make a lot of sense for us to administer it,” Kelly replied.

Nunavut Tourism would operate the fund under the same rules they use to handle the money they receive the Government of Nunavut and the Canadian Economic Development Agency, Kelly said.

Coun. Matshazi says no definitive timeline is in place to introduce the fee to council yet, since the committee is still consulting stakeholders on the initiative.

“We’re building consensus around the concept,” he told Nunatsiaq News.

Matshazi confirms Iqaluit’s hotels have been approached by the committee regarding the fees.

“We reached out to the industry. They are quite aware that we want to implement it,” he said. “They were not opposed to it. They were concerned about how we implement it.”