The head of Tourism Windsor-Essex Pelee Island is applauding a recommendation in Windsor's proposed 2025 budget that would see an increase to the municipal accommodation tax.
Gordon Orr says the move could actually make TWEPI more money.
City administration is recommending that the municipal accommodation tax, or MAT rate, increase to six per cent from four per cent effective April 1, 2025.
The four per cent MAT rate, first introduced in 2018, is charged on the bill of users of hotel rooms in the city.
Under the terms of the program, TWEPI was named as the designated tourism entity receiving 50 per cent of the annual revenue collected after deducting administration fees.
The MAT revenue was intended to replace the city’s contribution to TWEPI, and as a result of the proposed increase, administration is also recommending the elimination of an annual transfer to the Tourism Development Infrastructure and Program Reserve fund of $300,300.
The reserve is intended to make sure TWEPI makes its base budget of $923,300 from the city, but the proposed MAT increase would allow TWEPI to use the additional revenue to establish its own reserve.
Gordon Orr, CEO of Tourism Windsor Essex Pelee Island, says the tax rate increase is projected to make TWEPI $700,000 over what the base budget is and make their own reserve fund for bigger initiatives.
"So they're really not cutting. If anything, we're making more money than ever based on the hotel tax as the city's contribution. The city's contribution will allow us to have that $300,000 to be in a reserve fund for city-led initiatives in our Tourism Windsor-Essex budget," he says.
Orr says it's estimated that they will actually make $1.6 million in 2025, if the increase is approved.
MAT revenue is projected to be $3,040,387 in 2024, up from $2,696,862 in 2023.
Orr says those dollars are raised revenues to allow the marketing and programming by TWEPI.
"At the same time, it allows the city to receive more money from the hotel accommodation tax and allows them to invest in more tourism infrastructure projects within the city," he says.
The County of Essex also provides $782,000 a year in per capita funding to the TWEPI base budget.
On Jan. 3, Windsor Mayor Drew Dilkens tabled the 2025 budget with a proposed 2.99 per cent municipal tax increase.
The public and city council will have two weeks to review the budget. Council will then hear from delegations on Jan. 13, 2025.
At the conclusion of that meeting, the council will meet to deliberate the proposed budget on Jan. 27, 2025, with any additional rounds of deliberations scheduled, as required, between Jan. 28 and Feb. 3, 2025.