Information Overview of Destination Marketing Programs in Ontario
Considerations for Tourism Organizations
Purpose:
Many tourism organizations in Ontario have implemented industry-developed approaches to generate additional revenues for the purposes of marketing or other tourism development initiatives. The Ministry of Tourism, Culture and Sport (MTCS) recognizes the industry’s interest in developing revenue-generating tools to meet the needs of the regions and cities that they service.
This information is intended to inform organizations that are considering implementing fees or surcharges, such as a Destination Marketing Program (DMP).
Background:
In Ontario, Destination Marketing Programs or other tourism fees are voluntary, industry-led initiatives that have existed in several destinations and have been recognized by many accommodations and tourism operators as an effective means of supporting regional tourism marketing development.
Typically, participating hotels have collected these fees of their own accord and remitted them to their accommodation industry association. In turn, the association then transfers funds to a local or regional non-profit destination marketing organization for marketing activities promoting their city or region as a whole. Contributions to DMPs from participating hotels are calculated in a number of ways, including for example, as a flat rate per room night sold or a percentage of room revenues, typically up to 3%. DMPs or other industry fees are not legislated by the government and the monies collected do not go to government.
Planning Considerations for Industry:
To encourage transparency and coherence in terms of the visitor experience across Ontario, tourism organizations are encouraged to align their DMP programs. The following considerations should be made before deciding to pursue implementation of a DMP:
- How the funds will be used and how decisions will be made regarding use of funds (e.g., advertising, marketing, product development, research)
- All participating businesses should be prepared to respond to consumer inquiries about the DMP. Staff should be trained to ensure that they understand and can explain the fee, in particular that the fee is not a government tax or levy
- Businesses may include fees in the price or make the amount to be charged known in advance to the prospective consumer and must accurately represent/describe its purpose
- Businesses participating in DMPs must also adhere to any applicable provisions of provincial and federal statutes, for example, the provincial Consumer Protection Act and the federal Competition Act
For Consumers:
Consumer protection is a priority for this government. Businesses collecting fees are responsible for ensuring that fees are not misrepresented as taxes. Businesses may include fees in the price or make the amount to be charged known in advance to the prospective visitor and accurately describe its purpose.
Businesses are also required to adhere to the Consumer Protection Act. Under the Consumer Protection Act, it is an offence to misrepresent the purpose of any charge or proposed charge. Consumers in Ontario that have any questions or concerns should contact the Consumer Protection Branch at 1-800-889-9768, or visit the Consumer Protection Ontario website for more information.
