THUNDER BAY—Some Thunder Bay motel operators feel the City of Thunder Bay's proposed tax on hotel and motel room rentals will hurt their customers as well as their business.
City council this week authorized administration to prepare a report outlining options for the tax. A number of other Ontario communities either have already imposed a 4 per cent tax or plan to do so.
A new provincial regulation authorizes a Municipal Accommodation Tax, with the proviso that 50 per cent of the revenue goes toward projects that promote tourism.
Sam Elmahriki owns the Old Country Motel and the Modern Motel on North Cumberland Street.
He calls the proposed tax "unfair" to smaller operations such as his that accommodate clients who aren't part of the tourist traffic.
In an interview with Tbnewswatch, Elmahriki said he serves a lot of single mothers, people without homes, seniors from rural communities who come to Thunder Bay for medical appointments, and students who need temporary accommodation while they look for apartments.
Many of these clients, he said, can't afford to pay more than what motels already charge.
"We are not a hotel, where we can say if we send money to the city they will build a tourist destination. A tourist destination is not going to serve my guests, but the big hotel is going to benefit from that," Elmahriki said.
Motel patrons are already grumbling
On the same Cumberland Street strip, Andy Kublik, the owner of the Sea-Vue Motel, is already hearing negative feedback from some of his customers.
"Especially the people coming here for medical" purposes and things like that," he said.
Kublik sees a positive aspect to the tax, however.
"In one way it's good, if that money can be spent wisely. But it's the customers who are feeding that thing, and for them that's an increasing cost."
Kublik said it would be nice if a system could be set up to tax visiting tourists only, but "I don't think that, in reality, you can do that," because it would be too difficult to administer.
In any case, he doesn't believe that lower-budget motels such as his will be affected much by the tax because it will only add "a couple of dollars" to clients' bills.
Across town, on the south side, Kingsway Inn owner Major Somal strongly disagrees.
He believes the tax will drive visitors away from Thunder Bay. "That's not good. We're going to lose business. It's going to affect it a lot," Somal said.
Somal questions the commitment to devote half the revenue to tourism development, saying "I don't think they'll do anything. What did they do for the last ten years?"
City staff plan to consult further with the hospitality industry, including the smaller players. They have already met with the association representing the chain hotels, a spokesperson for which has described the tax as "a very positive thing" for developing tourism-oriented products in Thunder Bay.
Elmahriki, for one, will attend the upcoming consultation and intends to speak up.
In addition to his general opposition to the tax, he's concerned that provincial regulations provide exemptions for university and college residences. "In the summer they rent their dorm rooms to any average person, and they rent it for $30 to $40 a night," he said, calling that "an unfair market."
"They're taking the money away from us and giving it to the university," Elmahriki said.
A spokesperson for Lakehead University told Tbnewswatch the minimum charge for a dormitory room rental is $40.
