THUNDER BAY — On the heels of some modest growth in the hospitality industry in Thunder Bay last year, the sector looks forward to further growth with the help of the city's new hotel tax.
Effective Sept. 1, 2017, hotel and motel operators were required to add an accommodation tax of four per cent to their room rates.
The tax generates funding to promote tourism within the city. One half of the net revenue will go specifically to tourism promotion and development with a focus on attracting more visitors via sports and cultural events, conventions, enhanced attractions and outdoor activities.
It's expected the tax will bring in $2 million over 12 months.
The manager of tourism for the city, Paul Pepe, says the Finance Department has already received a modest first installment.
"We'll get a sense over the next month or two as to what the fall and winter collection was, as we start putting together an investment strategy," Pepe told Tbnewswatch in an interview.
An industry-led committee has been established to manage Tourism Thunder Bay's share of the funds.
This month, the committee will hold its first meeting and will start developing an investment strategy.
Pepe said he's optimistic about the growth potential for tourism this year, based on trends that developed in 2018.
The most recent available data shows that Thunder Bay's hotel occupancy rate was 76.2 per cent for the year, which he said was an increase of nearly one per cent from 2017.
Another key indicator was the average daily room rate last year, which went up from $116 to $122,
"That's important because the accommodation sector was seeing an increase in revenue. The more people there are that are looking for a room, that's going to drive prices up," Pepe said.
He noted, however, that local room rates are still considered affordable in comparison with the Ontario average of $161.
The pending opening of the new Delta waterfront hotel and a hotel in the former Camelot St. courthouse is seen as another sign of a healthy hospitality sector in the city.
New visitor attractions are also contributing to the industry, Pepe said. Last year, eight tourism-related businesses started up.
"It was certainly one of the more robust years in a decade" in that regard, he said, pointing to the opening of the museum ship the Alexander Henry, helicopter tours, the Superior Rocket boat cruises, a food tour business and others.
Pepe said it's encouraging to see business owners showing confidence in the market and giving visitors more reasons to spend more time in Thunder Bay.
"We're going to see this trend continue in 2019," he predicted.
