Leaving tourism levy funds in the hands of hotels and lodging providers may have a minimal impact right now, but should help stabilize cash flow for Alberta's weakened hospitality industry as travel increases.
The Alberta government has announced hotels and other lodging providers can keep tourism levy amounts collected between March 1 and December 31, 2020. The province charges a four per cent levy for accommodations. The revenue previously went back into the province's general coffers.
Economic, Trade and Tourism minister Tanya Fir estimates the measure will free up between $16 million and $27 million in additional cash flow for the hospitality sector, which employs 30,000 Albertans.
That's good news for a sector that has been brought to a standstill by the COVID-19 pandemic.
Cochrane Tourism CEO Jo-Anne Oucharek says Cochrane hotels and motels currently have five to 10 bookings per night and have had to lay off much of their staff for now,
While the levy funds collected is minimal right now, it will help.
"There are perimeters around it, but anything I think at this point will help, especially the hospitality industry."
"I do know that some of the hotels have some bookings or some of them are coming back, but it really depends upon what gets open and what's going to be available for customers, and if people are going to be comfortable enough to travel."
Banff-Kananaskis MLA Miranda Rosin believes the funds will help.
"We're hopeful and confident that it will provide much-needed cash liquidity to these businesses who need access to cash flows upfront to get through the next few months," says Rosin, who also chairs the provincial tourism and hospitality recovery task force
The use of the tourism levy was one of five topics outlined in a letter to Premier Jason Kenny and Tourism minister Tanya Fir by Rosin and Bow Valley tourism officials in late March.
It was suggested the province's entire 2020 hotel levy be given to Alberta Travel to use in communities where it is generated, rather than placing the funds in government general revenue.
"That's going to be a conversation for later. Once we get through this period, I think then the conversation would be more relevant to look at our initial recommendation."
Rosin says Alberta Travel officials say they have adequate funding for its upcoming staycation.campaign and Minister Fir believed putting the money directly in the hands of hoteliers, for now, is the right choice.
Rosin is excited about the opportunities a staycation campaign may hold for the entire province.
"There are tons of activities, experiences, and sights to see right here at home. We are working with Travel Alberta to launch a staycation campaign that really encourages Albertans to get out and experience their own province. As Albertans do that, we expect the hotel occupancy to begin filling up again as it would in a normal summer season."
Travel Alberta is working on additional measures to support local tourism organizations across the province that will be announced at a later date.
Additionally, it continues to develop its new 10-year tourism strategy that will now take into account the impact of the pandemic.