‘A balancing act’: Local hotel industry asks City of Calgary for relief on taxes and fees

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Local hotel industry asks City of Calgary for relief on taxes and fees
Calgary hotels are feeling the financial pinch due to repercussions from the COVID-19 pandemic. As Adam MacVicar reports, the industry is hoping for relief from the City of Calgary. – Jan 21, 2022

Ongoing financial challenges caused by the COVID-19 pandemic have forced Calgary’s hotel industry to request financial aid from the City of Calgary.

The Calgary Hotel Association penned a letter to city council and the mayor requesting an abatement on municipal property taxes and utility fees until May 31, 2022.

“The whole first quarter is lost,” Calgary Hotel Association president Sol Zia told Global News. “We’re likely not going to be back to whatever the new level of business is until May, hence the May 31 ask — to get us through the first quarter and into the second quarter before we know things will improve in the summer.”

The financial impact of the pandemic on local hotels is estimated to be $500 million over the last two years, according to the hotel association.

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At the Carriage House Inn in south Calgary, daily challenges continue to persist, including a roll-back in cash flow, staffing, changing health measures and the Omicron variant.

“The impact of Omicron on our industry, especially with the United States recommending not to travel to Canada, has immensely hurt us,” Carriage House Inn general manager Lino Savino said Friday. “We were looking at a pretty good 2022 and we were expecting a little bit of a return to normal business, but it’s been devastating.”

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The Calgary Hotel Association has also made a similar request to the provincial government.

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According to Zia, the province has already abated the Alberta Tourism Levy until March 31, 2022, for hotels that have a documented revenue drop of 40 per cent or more.

The most recent request would also see the levy abatement extended until the end of May.

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“We’re not asking for the government or the City of Calgary to cover all of our costs,” Zia said. “We’re just asking for some relief from the tax portion… as we look through this year.”

Calgary city council has already approved a property tax deferral for hotels until the end of 2022.

The CHA confirmed it has met with the city and the mayor’s office regarding their request, which would also apply the same revenue loss criteria as their request to the province.

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Mayor Jyoti Gondek said the changing environment with COVID-19 and it’s toll on local businesses must be addressed.

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In an interview Friday with 770 CHQR, Gondek said property taxes for hotels are based on both assessed value of the property as well as revenue.

“The assumptions that are made in a pandemic environment about their revenue combined with the value of their property is something that needs to be taken quite seriously and reviewed for the times that we’re in,” Gondek said. “We’re committed to working with them on making sure they get the best possible outcome. ”

Ward 7 Coun. Terry Wong said he hopes to raise the issue with city council and administration next week, to determine what options are available.

The city’s finances are tight, Wong said, after a property tax increase as well as new figures on inflationary pressures in Alberta.

“It’s a balancing act,” Wong told Global News. “The question administration has to help us with is what are the priorities, where are the opportunities and how can we support Calgary’s economy, businesses and our residents.”

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Zia said half of the hotels in the city are family owned businesses and that government assistance will be an important measure to keep businesses from closing down.

The latest repercussions due to the Omicron variant have pushed back any sort of recovery to 2019 levels another few years down the road, Zia said.

“Beggars can’t be choosers,” he said. “But really anything the city can do to ease the burden for the hotels, it’s going to be critical.”

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