Proposed Yellowknife hotel tax could raise gov't revenue, drive up prices

The City of Yellowknife is proposing a new tax that would add a surcharge of up to five per cent to tourists' hotel bills. The money would fund Yellowknife's new Destination Marketing Organisation, in an effort to increase summer tourism.

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Newton Grey, regional manager for Capital Suites, a hotel chain with a Yellowknife location, said he doesn't want to see the levy go through. "There's no secret that the Yellowknife market is considered to be an expensive market," said Grey. "There is some price resistance right now."

Start-up funding for the new marketing organization comes from the City of Yellowknife and the Canadian Northern Economic Development Agency. But those are temporary sources of funding; proceeds from the levy would finance the marketing effort in the future.

Grey said he's not convinced the marketing strategy will be strong enough. "I've seen too many of these taxes go into general funding," said Grey. "I'm not opposed to tax, but I think the timing is bad and I think there is more work to be done."

Nalini Naidoo, director of planning and development for the city, said she is confident the new marketing organization can "generate great projects and increase numbers on tourism."

The city created a survey to assess the concerns citizens have with the proposed hotel tax. Naidoo said the survey is also being used to generate conversation about the levy.

Grey said he will be voicing his concerns in the survey.