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COUNCIL MEETING OVERVIEW
COTA held a Council meeting on October 29, 2009 to solicit member input to
achieve unambiguous direction around the next steps for the September 2,
2009 Council meeting recommendations with regard to:
1. Dissolution of Tourism BC and COTA's role vis-à-vis
provincial-level marketing initiatives.
2. Community and regional marketing system redesign post-Hotel Room
Tax / Tourism BC.
3. Harmonized Sales Tax (HST) - impacts on tourism and mitigation
strategy.
The
October 29 Council meeting was preceded by a four-hour strategic planning
session relating to HST, Tourism BC's dissolution, and the
community/regional marketing system redesign. The day was facilitated
by Dr. Nancy Arsenault and a panel of tourism experts from around the
province, and is complementary to planning processes undertaken by the
Ministry of Tourism, Culture and the Arts, as well as the Ministry of
Finance.
Notes
from this session will be made available to COTA members in the coming
days.
Members
of the COTA Board will be meeting with Finance Minister Hansen on November
10, 2009 to discuss the above issues, with particular emphasis on HST
impacts and mitigation. COTA will keep its members apprised of the
outcomes of this meeting.
TOURISM BC DISSOLUTION
The Council continues to be strongly opposed to government's decision and
rationale to dissolve Tourism British Columbia.
In
order to clarify its earlier resolution regarding the specific components
required for the marketing system, the following resolution was endorsed by
the Council:
Resolution: Tourism BC Dissolution
Notwithstanding
the endorsed resolution of September 2, 2009 "Tourism BC
Dissolution"
That
COTA work with the Province to ensure that an effective consumer-driven
marketing organization be established that meets the mutual needs of
industry and government, including the incorporation of these key
principles: an autonomous, industry-led governance model free of political
interference that operates on sound business principles, with
formula-funding that enables long-term strategic planning over a multiple
year long-term planning horizon.
Citing a COTA Board resolution of September 30, 2009, COTA also brought
forward for discussion and resolution the issue of COTA's relationship to
the newly structured provincial marketing organization (within
government). Of chief interest was the issue of whether COTA would
sit on the proposed Minister's Advisory Council.
The
COTA Council endorsed the following resolution:
Resolution: Minister's Council on Tourism (MCT)
The COTA Council therefore recommends:
That
COTA not participate in, or endorse any such proposal for a Minister's
Council on Tourism, nor should a member of the COTA Board be assigned or
nominated for such a Council.
COTA has communicated its updated position statements to Tourism, Culture
and Arts Minister, Kevin Krueger. To view a copy of this letter, click here.
Tourism BC Budget Estimates
Tourism
budget estimates occurred in the legislature this week, on Monday, November
2. To review, click
here.
Community DMO System
COTA has been working with members to ensure that the community DMO system
has an effective replacement when the Additional Hotel Room Tax (AHRT)
comes to an end in July 2011.
The COTA Council endorsed the following resolution on
September 2nd:
That
COTA unite the entire tourism industry within the next month to discuss a
strategy to develop a uniform position on the community DMO system with the
goal of formulating one position to present to government in the upcoming
consultations.
In response to this motion, A COTA CEO's committee comprising
representatives from the BC Destination Marketing Organization (DMO)
Association and the BC Hotel Association was formed. The work of this
committee has resulted in the development of a conceptual framework for the
implementation of a voluntary Destination Marketing Fee (DMF).
In
order to focus the efforts of the authors of this conceptual framework, the
following assumptions were necessary:
1. That
the concept of a voluntary DMF must pre-suppose an effective, efficient
vertically integrated marketing system which includes provincial, regional
and community level DMOs,
2. That community level DMOs are integral to the overall performance
of the vertically integrated marketing system,
3. That further consideration must be given to securing the important
role of Regional DMOs (RDMOs) in the tourism system.
4. That the current Additional Hotel Room Tax (AHRT) would cease to
exist on July 1, 2011,
The
authors of this DMF conceptual framework realize that our efforts have been
undertaken within a much broader tourism framework and that the concept of
a DMF has a connection to and bearing on many other elements of the overall
marketing system. The purpose of developing this conceptual framework was
to, in the absence of any other scenario, propose a clear and concise model
which can be considered and possibly endorsed by various organizations and
their boards of directors as a potential replacement for the current AHRT.
To
view the draft DMF Conceptual Framework, click
here.
COTA
recommends that all DMO boards review and develop a considered opinion on
the future of AHRT and the viability of a replacement DMF framework.
For more information, contact Stephen Regan, COTA's President and CEO at sregan@cotabc.com.
Government Liaison on B.C.'s Marketing System
COTA
continues working with the provincial government to align its activities
with those of government. COTA held two meetings with provincial
representatives from the Ministry of Finance and Ministry of Tourism,
Culture and the Arts in early October. COTA also helped organize and
facilitate the Ministry of Tourism, Culture and the Arts' October 28
meeting of tourism marketing stakeholders, which sought input on the
marketing system related to funding and organizational structure at the
provincial, regional, and community level.
This
meeting served as an informative precursor to COTA's own meetings on this
topic (among others) the following day, October 29th.
COTA's
goal is to ensure as much as possible that government and industry are
aligned behind common interests and positions in the development of a
compelling business case for the funding and structure of B.C.'s marketing
system.
COTA
is working on a business case at present in consultation with its
members. Much of this work will be based on the meetings held on
October 28 and 29.
At
the direction of the COTA Council and Board, the marketing system will also
continue to be a component of any discussions with government officials
relating to Harmonized Sales Tax (HST) mitigation.
REGIONAL DMO SYSTEM
While there was no formal resolution stemming from recent COTA
Council meetings regarding the Regional DMO (RDMO) system, COTA recognizes
the vital role of this segment of the marketing system. COTA received
a delegation of RDMO representatives at its September 30, 2009 meeting and
will ensure that their interests are considered in any discussions going
forward.
COTA's
President and CEO has committed to further engaging the RDMO network and
will ensure that future discussions with government address this critical
element.
COTA's
regional tourism planning work related to the mountain pine beetle
undertaken in the spring and summer of 2009 also identified the RDMOs as
requiring additional resources to support regional/rural destination
policy, planning, and development activities. COTA will continue to
explore this notion in the coming weeks and months with its members and
government.
HARMONIZED SALES TAX
COTA continues to place a priority on identifying and mitigating the negative
impacts of the HST on tourism-related businesses.
COTA's HST Analysis
COTA has completed its HST Impacts Analysis and has presented the report to
the federal and provincial Finance Ministers, Premier Campbell, Minister
Krueger, and other stakeholder groups.
To
download a confidential copy of the report, click here.
The
report has been extensively covered in the media, with wide coverage in
major provincial dailies, talk radio, and business magazines. The
report was also a prominent discussion point, led by the Official
Opposition, in the Legislative Assembly of BC on October 26. Click here to review the debate in the Legislature.
Report Findings and Recommendations
The preliminary findings of the report are as follows:
. The average price impact (increase) of HST across the entire tourism
industry is expected to be approximately 4.66%.
. The anticipated net taxation impact (increase) on the tourism
industry will be approximately $363 million (per year), which could result
in annualized tourist expenditure declines of up to $545 million.
. Direct HST-related job losses in the tourism industry are
anticipated to be between 3,446 and 5,174 jobs.
. Total government taxation revenue losses (federal, provincial,
local) are anticipated to be between $104.9 and $157.5 million per year.
COTA
has been working with the HST Tourism Working Group, chaired by COTA
Director, Richard Floody, to develop a reasonable yet meaningful mitigation
package to bring forward to the provincial government. Potential
mitigation options were identified in the report and have been presented to
the Premier, Minister of Finance, and the Select Standing Committee on
Finance and Government Services.
These
mitigation options were further reviewed and prioritized by the COTA
Council on October 28 and 29, 2009. These priorities are, in order:
1. Ensure the full twelve (12) points of HST are eligible for foreign
visitor rebates through the Foreign Convention and Tour Incentive Program
(FCTIP), while enhancing this program to re-enable point-of-sale rebates
and individual rebates.
2. Establish income tax credits for labour for businesses that were
previously PST-exempt, potentially phased-out over a period of 3-4
years.
3. Ensure the provincial marketing system is redesigned with adequate
and predictable funding and with industry-led oversight and
governance. (NOTE: many members believe that COTA should continue to
link the marketing system to HST-related advocacy, but should ensure that
government considers the system's effective redesign as government's
responsibility, not a "concession" related to HST).
4. Honour existing contracts that did not charge PST (provide rebates
or exemptions for this portion of HST for businesses).
5. Remove the revenue cap requirement for Input Tax Credits for
tourism-related businesses.
COTA
is developing a full advocacy strategy that includes targeted government
advocacy and public / media relations activities. This will focus on
ensuring that provincial and municipal elected officials are apprised of
industry's recommendations, and that champions for HST mitigation are
identified at various levels of government, industry, and the media.
COTA
will continue to present this information in an unbiased, factual manner,
while attempting to positively and proactively engage government.
2010 TOURISM INDUSTRY CONFERENCE
The
17th Annual Tourism Industry Conference (TIC) will be held April 18 - 20,
2010 following the Olympic and Paralympic Winter Games. The format
for TIC 2010 will change significantly from past Tourism Industry
Conferences, to specifically target the delivery of critical business
information to operators, while promoting opportunities for tourism leaders
and operators to discuss policy issues, network, and support business
development needs.
COTA's
President and CEO, Stephen Regan, presented TIC-related analysis and
discussion items at the October 29 Council meeting. To view a copy of
this presentation, click here.
Visit http://www.bctourismindustryconference.ca/
for more information.
UPCOMING INDUSTRY EVENTS
Canadian RV & Camping Convention
November 5 - 8, Victoria
Canada's 5th national Convention for members of the RV and
Camping industries - local partners include the RV Dealers
Association of BC and BC Lodging and Campgrounds Association.
Click here for more information.
Hospitality Industry Conference & Exposition
November 22-24, Vancouver
Join the BC Hotel Association (BCHA), the BC Restaurant and Foodservices
Association (BCRFA), the Alliance of Beverage Licensees of BC (ABLE) and
the BC Lodging and Campgrounds Association (BCLCA) in Vancouver for the BC
Hospitality Industry Conference & Exposition on November 22-24, 2009.
You will have the opportunity to get informed about the most relevant and
timely issues affecting the hospitality industry today.
Click here for
more information.
For
more of the latest news and industry events, visit www.cotabc.com.
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