Niagara Falls Businesses Make Millions From Bogus “Destination Marketing Fees”

Niagara Falls is a popular tourist destination and home to many non-existent girlfriends of nerdy high schoolers. Equally imaginary is the 3% “destination marketing fee” charged by numerous area businesses.

According to CBC News, businesses in the area began charging the fee — under a variety of names — back in 2004. Four years ago, the Ontario provincial government politely asked them to stop slapping these extra charges on tourists’ tabs because it’s not an actual tax, nor are the “marketing” fees being remitted to a legitimate organization that would use the cash to promote tourism.

And yet, says the CBC, hospitality businesses around the falls continue to charge the fees, to the tune of an estimated $15 million a year ($14.63 million in U.S. dollars).

What many visitors to the area don’t know is that they can ask to have the fee removed from their bills.

A recent look around the area by CBC reporters found 80% of the hospitality businesses near the falls are charging the fees, sometimes as “destination marketing and development fees” or “tourism infrastructure funding fees.”

The chair of Tourism Niagara tells the CBC that he has “no idea” how much money is collected by these fees and that the cash isn’t pooled and handed over to any group that would promote the area, but is instead held onto by each business to do with as they wish.

“It’s an individual property owner’s assessment,” he says. “Are they getting three per cent and putting it in their pocket? If you think that, you don’t know much about tourism in Niagara.”

Similar fees do exist elsewhere in the U.S. and Canada, but those fees are generally pooled and funneled to non-profit agencies that promote tourism and development.

“[T]he monies collected go into the individual business’s coffers and there’s no control over where or how the money’s spent,” one local politician who has openly opposed the fees, tells the CBC.

Some businesses have refused to collect the fees because there is no oversight or concentrated focus on promoting tourism in the area. Operators of these abstainers say they would collect the fees if there was an organized pooling of the funds.

The Tourism Niagara chair says that businesses haven’t just been lining their own pockets with the fees. He points to the millions spent by local hotels on tourism projects like fireworks and a convention center (or “centre,” since we’re talking about Canada).

Niagara Falls’ tourist fees collected with little oversight [CBC]

Thanks to Gord for the tip!

Comments

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  1. AtlantaCPA says:

    I wonder if they would be legally obliged to remove it if asked since it wasn’t part of their quoted price? Or if it would just be on a case by case, if they feel like it basis?

    • nugatory says:

      I was wondering that. I’ll be headed up there with family later in the year.

      I certainly have no intent on paying it.

    • TheRealDeal says:

      I would imagine that you could argue that it is essentially fraud.

      • AtlantaCPA says:

        Of course what if they say something like “$100 per night plus fees” does that cover them? They didn’t say ‘plus legitimate fees.’ Most people won’t ask what fees and if they are really required. Whole thing is so sketchy.

        • TheRealDeal says:

          Oh, I agree on the sketchiness. Of course, I would think that if you simply challenged them about it and stated that you are aware that the provincial government is against it, they would back down. But it is so shady that there aren’t clear legal requirements one way or another.

    • Robert Nagel says:

      It says in the article that you can have the fee removed on request. Most people either don’t notice it or don’t care enough to ask.

      • OSAM says:

        Tried that: Went to the Outback Steakhouse on the Canadian side (Disclosure: we’re from Toronto). We saw this added fee to the bill, asked what it was, and was told it was mandatory and – get this – government mandated.

  2. Taylor Rolyat says:

    I’m missing the cultural reference. Whose non-existent girlfriend?

    • VintageLydia says:

      There is this stereotype that nerdy guys everywhere have a “long distance girlfriend” somewhere in Canada, often in Niagara Falls. Someone they could’ve met going there on vacation or something (though nowadays, the nerdy guy in question just met her on the internet.)

      The idea is, there is no girlfriend. It’s a lie to make themselves look better somehow.

    • agent 47 says:

      Wasn’t it in The Breakfast Club?

    • El_Cheapocabra says:

      It was also immortalized in Avenue Q’s song, “My Girlfriend Who Lives in Canada,” sung by a closeted character trying to convince everyone he’s straight.

  3. paladin732 says:

    You CAN remove it by asking. I am pretty sure they HAVE to remove it. We went there over last summer and I saw a forum thread on TripAdvisor about this. So I knew to have it removed. Everyone removed it, some argued for a minute or two, but as soon as you asked for a supervisor, they were always magically able to remove it. It adds up, a LOT. I think I knocked a few hundred dollars off our hotel room alone.

    • Chmeeee says:

      Removing the 3% fee knocked off a few hundred dollars? Your hotel room cost $10,000?

      • paladin732 says:

        It was 3 rooms for a full week. about 3K. The hotel had theirs at 10%. (It was the same BS fee though, was not disclosed at time of booking even when the price quoted said it included all fees and taxes)

    • OSAM says:

      As indicated two threads up:

      Tried that: Went to the Outback Steakhouse on the Canadian side (Disclosure: we’re from Toronto). We saw this added fee to the bill, asked what it was, and was told it was mandatory and – get this – government mandated.

  4. highfructosepornsyrup says:

    Definitely one of the fees I hate the most, regardless of whether it’s pooled or not.

    If you want to charge more, just raise the damned price.
    If you want money to do stuff like fireworks or whatever that benefit the region, then raise taxes in the region.

    • ajaxd says:

      You are just not understanding the way this scam works. If you raise the price then you have to pay tax on the profit. If you add the fee to tax then you have to send it to the tax authority. But as described in the article, you just get to keep the fee itself – pure untaxed profit.

  5. Blueskylaw says:

    Perhaps CBS news can also do a story on bullsh*t Cellular Phone Fees.

    • sparrowmint says:

      The story is from the CBC, not CBS. Hence the numerous references to the Ontario government, Canada and such.

      • Blueskylaw says:

        Perhaps CBS can do a story on how their company is mistaken
        for a Canadian company with similar sequenced initials.

    • Weekilter says:

      You need to pay better attention. It’s the CBC not CBS. It’s Canada. They don’t have CBS in Canada (that’s where Ontario is by the way.)

  6. Cat says:

    “Are they getting three per cent and putting it in their pocket? If you think that, you don’t know much about tourism in Niagara.”

    You Americans just don’t understand Canada, eh?

    • EasilyDistracted says:

      CBS (Columbia Broadcasting System) != CBC (Canadian Broadcasting Corporation)

      • NewsMuncher says:

        ≠is option+= on my Mac. I think it’s alt+= on the PC. I was doing the != for a while till I figured that one out and started using option+8 (•) lots, too. :) Stay clicky, my friend!

    • EasilyDistracted says:

      Crudmiffins!…replied to wrong thread. Sorry Cat.

  7. scoosdad says:

    Sounds an awful lot like the ubiquitous ‘resort fees’ that hotels routinely tack onto the bill now.

    • Naked-Gord-Program says:

      Yes but here people (on purpose or by happenstance) are thinking this is a tax levied on their bill. So much so that the government has asked them to stop.

      Thing is there’s no consumer protection laws in Canada with any teeth (it’s much worse than in the US) so businesses are used to doing what they want.

      Big business basically runs the Canadian government.

    • Naked-Gord-Program says:

      Yes but here people (on purpose or by happenstance) are thinking this is a tax levied on their bill. So much so that the government has asked them to stop.

      Thing is there’s no consumer protection laws in Canada with any teeth (it’s much worse than in the US) so businesses are used to doing what they want.

      Big business basically runs the Canadian government.

  8. El_Fez says:

    I used to a spry young man back when I was happy. Then one day, that rat came and destroyed forever the happiness I ever known. I’ll never forget that day, I just came home from the grave yard shift, and there was a note on a pillow!

    It was one of those cold blooded notes that went thusly:

    “Dear El_Fez
    I am running away with Ben!”

    I was obsessed with the idea that I must find them. The trail led me to Pittsburgh, I found I missed them by three days when I got there. And swore right there in Pittsburgh that I’d find him and have my revenge, and now on with the chase. Miami, Dallas, New Orleans. . . .

    And then I came face to face with the rat that ruined my life, it was in Niagara Falls. . . .NIAGARA FALLS!

    • Evil_Otto would rather pay taxes than make someone else rich says:

      Slowly I turned, inch by inch, step by step….

  9. stephent says:

    First time I am actually ashamed to say that is where I was born.

  10. who? says:

    I had the same thing happen at a hotel in downtown Denver. I get a fabulous $79/night rate, then pay $28 for parking (I expected to pay for parking, just not that *much*), and some $2+ per day fee for something with a bunch of initials. The hotel desk clerk couldn’t tell me what the fee was for, but wouldn’t remove it, either. I travel to Denver all the time, and this was definitely something new. I emailed my receipt to the corporate office (it was a large chain beginning with the letter H) and asked them about it. Corporate apologized and refunded the fee.

    That hotel was nice, but they lost a customer over a $2 fee.

    That was the same trip that Dollar charged me a $2/day “convenience” fee. I’m still trying to figure out what was so damn convenient about renting a car from them.

  11. Oranges w/ Cheese says:

    Something I noticed for shopping for honeymoons recently – Expedia in very small print and with a lot of *****’s added “Price does not include $15 resort fee per day charged by resort”

    Easily missable, and a similar sort of thing I think – its a fee they can charge because they can get away with it and they’re money grubbing bastards.

  12. oldwiz65 says:

    wonder if they report it properly on tax forms? or hide it somewhere?

    • AtlantaCPA says:

      They definitely have a team of highly paid tax professionals who report it in such a way that it’s still not taxed. I almost guarantee it.

  13. InsertPithyNicknameHere says:

    I guess I’m just really brain-dead, because the following two paragraphs make no sense to me:

    “The chair of Tourism Niagara tells the CBC that he has ‘no idea’ how much money is collected by these fees and that the cash isn’t pooled and handed over to any group that would promote the area, but is instead held onto by each business to do with as they wish.

    ‘It’s an individual property owner’s assessment,’ he says. ‘Are they getting three per cent and putting it in their pocket? If you think that, you don’t know much about tourism in Niagara.'”

    If the chair has no idea where the money is going, why is it so hard to think that the business owners are “putting it in their pocket”? If I’m reading something wrong, someone please correct me, because I feel like my brains have turned to mush.

    • Kitamura says:

      I think the idea is that some of these businesses chip in for things like fireworks displays and the construction of public centers which could be “assumed” to be coming from that fee money.

  14. gman863 says:

    Why don’t they just change to name of the town to Viagra Falls and call it a “Penile Enhancement Fee”?

    At least this way morons would feel the’re getting something for their money.

  15. econobiker says:

    Same scam as the telephone companies’ “government regulatory recovery fee” tacked onto the bills.

  16. Weekilter says:

    It’s all a scam.

  17. buftar says:

    Why can’t they just chisel customers by charging 5 bucks for a Coke and 10 bucks to use the ATM like every other shyster tourist trap? The nerve.