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THEBACHA/FORT SMITH
A proposed hotel levy designed to help each NWT community promote itself as a conference and event destination will benefit Yellowknife, but drown out smaller communities, says one hotel owner.

Dana Jackson, co-owner of Fort Smith's only hotel, the Pelican Rapids Inn (pictured above), does not support the Yellowknife Hotel Association's proposed hotel levy. She said her hotel would not be able to compete with the potential $500,000 annually that the levy would give Yellowknife to use to attract conferences and meetings. - NNSL file photo

Dana Jackson, co-owner of Fort Smith's lone hotel, the Pelican Rapids Inn, said the problem with the levy is Yellowknife. Jackson said the city's numerous hotels will allow it to collect so much more from the tax than surrounding communities that its resulting advertising budget will leave smaller towns struggling to be heard.

Under the proposal, each municipality would have the option to collect a two per cent tax levy on each hotel room rental and use the revenue for promotional needs, with an intent to to attract conferences to the community. Based on occupancy figures collected from hotels in Yellowknife, Jenni Bruce, president of the city's hotel association, estimates the tax could generate up to $500,000 for promotion annually in the capital alone.

"There is no way that I can compete with $500,000," said Jackson. "I don't even think our township would be able to compete with that."

Jackson said if a 200-delegate conference typically held in a smaller community decides to move to Yellowknife as a result of the increased publicity, the neglected community would lose the potential economic benefits such as retail and restaurant spending.

"If (a conference) is lost to the smaller communities, that would effectively (erase) $300,000 directly from the community's economy," she said.

Bruce said the intention of the levy is not to take business away from smaller NWT communities.

"We only want to create new business for partners who will benefit from positioning Yellowknife and the NWT as a place to host meetings and conferences," said Bruce, who manages Yellowknife's Chateau Nova.

Bruce, who is also the NWT Tourism chair, said NWT communities would see positive benefits with more events coming to Yellowknife, adding most travellers are interested in visiting destinations outside of the capital.

"Our goal is not to take pieces of the pie, but to make the pie bigger," she said.

She hopes other communities will follow Yellowknife's lead, but added municipalities would not be forced to adopt the levy.

Ali Mirza, general manager of Capital Suites in Inuvik, said it has been a good year for hoteliers in Inuvik, with the community hosting the Truth and Reconciliation and National Energy Board conferences.

Mirza would not comment on whether he supported the levy or not, as he is traveling to Yellowknife to get more details on it later this week. However, he said that Inuvik wouldn't see much spin-off benefit from additional conferences held in Yellowknife, as the high cost of flying north discourage travellers from making the trip.

"If someone is going to Yellowknife, most likely they are not coming to Inuvik," he said.

Bruce said the association opposed the GNWT's proposed hotel tax last year, because funds generated from that tax would have gone into a general revenue pool, which may not have necessarily put money back into tourism promotion.

In response, the association proposed the government change its current legislation to allow communities to impose their own levy – so money collected from hotels would stay within the industry. The association is currently lobbying the territorial government for approval. The NWT Association of Communities (NWTAC) also passed a resolution in support of the levy last year.

After Jackson voiced her opposition at a town council meeting on Nov. 15 , Fort Smith has decided it will not be adopting the levy.

Janie Hobart, Fort Smith's mayor, advised the NWTAC's board of directors of the decision, adding the town initially supported the levy under the assumption that funds would be pooled for a territorial marketing campaign.

"We understood that it was to be a lobby for the entire NWT, not a private enterprise that would be lobbying on behalf of one community only," she said. Hobart said she will also raise Jackson's concerns with Thebacha MLA Michael Miltenberger.

Bruce said Jackson could partner with hotels in Hay River to sell the region as a conference destination using funds collected from both communities.

Jackson said she isn't opposed to working with local businesses to target a specific event, but added she has concerns about whether resources could be shared equally. Jackson added advertising spending is a cost of doing business and the government and the Canadian Tourism Commission are already tasked with promoting the NWT as a business destination.

Jackson said she was also speaking with hotel and business people in Hay River last week to discuss her issues with the levy.

"I'm just generating a voice for everyone on this side of the lake," she said.

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