Since 2004, many Niagara Falls tourist establishments have been charging a 3% tax called a "DESTINATION MARKETING FEE," a CBC News investigation has found.
The scheme, which has existed since 2004, pulls in an estimated $15 million a year from tourists who are likely unaware the fee is voluntary and can be removed from their bills if they ask.
A survey conducted by the CBC confirmed that 80% of the establishments surveyed confirm that the DMFs are now called DMDFs (DESTINATION MARKETING & DEVELOPMENT FEES) or TIFFs (TOURISM INFRASTRUCTURE FUNDING FEES).
In 2008, contrary to an Ontario Consumer Ministry bulletin issued warning Niagara Falls hoteliers and restaurateurs not label a fee 'DMF' or 'DPF' or claim the fee is for a tourism or destination marketing initiative if they are not remitting the fee to a legitimate non-profit agency for the exclusive purpose of promoting tourism.
Furthermore, instead of the money being pooled for joint promotional purposes for the entire region, each establishment collects and holds on to the untraceable fees, spending the money as they see fit, confirmed Wayne Thomson, chair of Tourism Niagara. Thomson is also a consultant for a group of the city's largest hotels as well as being an elected member of city council.
When asked why the fees are not more transparent and put into a pool for tourism promotion, Thomson's response was "Why do they have to?"
Thomson admits he has no idea how much is collected however some estimates have this fee totalling $15 million dollars annually. He reiterated that the fee is voluntary and that if visitors don't like it, they can request not to pay it and it must be removed from their bills.
Some major local establishments have refused to collect the fee, over concern for the optics of the practice and its failure to provide money to a region-wide marketing strategy.
BE INFORMED, BE AWARE & REFUSE TO PAY THIS DESTINATION MARKETING FEE. PARTICIPATING BUSINESSES WILL NOT INFORM YOU OF THIS VOLUNTARY TAX AND THE FEE WILL BE LISTED ON YOUR BILL OR RECEIPT HIDDEN AMONGST THE OTHER NUMBERS.
ASK EACH HOTEL, RESTAURANT AND/OR ATTRACTION IF THEY CHARGE A DESTINATION MARKETING FEE OR ANY TYPE OF SIMILAR FEE.
Source - Canadian Broadcasting Company