Hotels

Calgary hotels seek tax relief due to ‘serious’ situation

Projections for 2022 suggest lost revenue from the pandemic could exceed half a billion dollars

Content of the article

Calgary hotels are asking the city for a break on property taxes, calling the fallout from the Omicron variant and a recent U.S. government travel advisory a “disaster” for local businesses.

Advertising

Content of the article

Calgary Hotel Association (CHA) chief Sol Zia has called on the city to waive utility fees and municipal taxes from Jan. 1 to May 31 for hotels capable of posting a 40% revenue drop or more compared to 2019, in a letter distributed to city council last week.

“The situation for Calgary hotels is once again serious and much more serious than we imagined… at the start of 2021,” Zia wrote.

“With the impacts of the new Omicron COVID variant, and more so the impact of the US government’s call for Americans not to travel to Canada, the outcome has been disastrous for Calgary hotels, and examples of loss of revenue can be seen all over Calgary, not just downtown.

The US State Department upgraded a travel advisory for Canada on January 10 to a Level 4 ‘avoid travel’ warning, citing the risk associated with the ‘very high’ level of COVID-19 circulating in the country .

Advertising

Content of the article

The CHA estimates that hotels in Calgary have lost more than $450 million in projected revenue for 2020 and 2021, and projections for 2022 suggest the loss of revenue due to the pandemic could exceed half a billion dollars.

The province has already reduced Alberta’s tourism tax until March 31 for hotels able to show a 40% drop in revenue – although the CHA hopes the province will extend the reduction until the end may. CHA is also proposing that the city base municipal tax relief on the same 40% revenue drop threshold.

The city previously agreed to a tax-deferral program in 2021 after Calgary’s hotel and motel sector saw the lowest occupancy rates of any major market in Canada during the first part of the year. ‘year. But Zia wrote that conditions have only gotten worse and more help is needed.

Advertising

Content of the article

“More than half of Calgary’s hotels are family-owned and operated…all hotel owners provide operations, payroll, taxes and utilities as of March 2020,” Zia wrote. “Calgary hotels are struggling with cash flow and the ability to cover basic operating, utility and people costs, even more so now than in (as of) Q1 2021 when the CHA requested a deferral .

“(We) believe that the measures we are proposing (will work) to protect certain hotels from failures, failures that would be dramatic for the health and morale of our entire city and those who visit, work and live in Calgary,” he wrote.

Hotels and motels have suffered a precipitous drop in value relative to other commercial properties in the city, plunging their value 20% in 2022 compared to an average drop of 2% for typical commercial property, data shows. annual assessment released last November.

Advertising

comments

Postmedia is committed to maintaining a lively yet civil discussion forum and encourages all readers to share their views on our articles. Comments can take up to an hour to be moderated before appearing on the site. We ask that you keep your comments relevant and respectful. We have enabled email notifications. You will now receive an email if you receive a reply to your comment, if there is an update to a comment thread you follow, or if a user follows you comments. Visit our Community Rules for more information and details on how to adjust your E-mail settings.