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!