B.C.’s Ministry of Finance has released new data that highlights the struggles the Okanagan hospitality sector has faced during the coronavirus pandemic.
In Kelowna, hotel tax revenues decreased to $2.2 million from January to October, compared to $3.5 million over the same time period last year.
In Penticton, hotel tax revenue was down as well. The lakeside city saw visitors pay $550,243 in hotel taxes from January to October, compared to $669,732 over the same time period last year.
In Kelowna, the Municipal and Regional District Tax (MRDT) is a 3 per cent tax applied to sales of short-term accommodations, like hotels and motels.
Taxable accommodation also includes resorts, bed and breakfasts, houses, cottages and cabins.
The MRDT applies in the same manner as the eight percent provincial sales tax (PST) on accommodation.
The levy provides funding for local tourism marketing initiatives, programs, and projects with the intent to help grow B.C. revenues, visitation, and jobs.
Tourism Kelowna said hotel tax revenue is down due to decreased travel during the COVID-19 pandemic.
“Like other destinations across Canada, Kelowna saw a complete halt to visitation in early 2020 as the global pandemic reached British Columbia and travel restrictions were imposed,” said Lisanne Ballantyne, president and CEO of Tourism Kelowna.
“Over the summer months, when travel restrictions were eased, Kelowna and the Okanagan saw above provincial and national averages for visitation and overnight stays, though these were still much below 2019 levels.”
Ballantyne said visitor spending was also down.
“Coming into the end of 2020, travel slowed and restrictions and recommendations against non-essential travel were again imposed, resulting in limited overnight travel. Naturally, overnight stays and spending in destinations is far below 2019 levels, which, for Kelowna, was the highest year on record for accommodation levels and revenue,” she said.
Ballantyne added that Kelowna also suffered major economic losses from reduced business travel and postponed or cancelled conferences and major events, including several high profile national and international events like the Memorial Cup and World Curling Championships.
“These major events usually take place in the spring or fall months when travel levels are naturally a bit lower,” she said.
Tourism Kelowna said it anticipates 2021 hotel tax revenue will also be below 2019 levels as it will take years to fully recover from the impacts COVID-19 has had on the tourism industry.
The tax is at 2 per cent in Penticton and was increased to 3 per cent in Osoyoos in September 2019.
Osoyoos visitors paid $677,857 in hotel tax in the first ten months of 2020, while $597,077 was collected in the same time period the year prior.
The BC government said it has provided 61 organizations with a one-time $10 million grant to help them retain staff and offset expenses the organizations faced with a reduction in MRDT funds, “allowing them to better support economic recovery efforts in the tourism sector when travel restrictions are eased,” it said.
B.C.’s remains under a non-essential travel advisory as health officials attempt to curb the spread of COVID-19.
B.C. had explored the idea of an inter-provincial travel ban, but Premier John Horgan said last week the province cannot legally prevent non-essential travel.