By Jaclyn Irvine
The Ottawa business community is concerned the city’s decision to cut all funding for Ottawa Tourism in 2007 will hurt economic development in the capital.
Ottawa Tourism is a non-profit organization, responsible for promoting Ottawa to outsiders.
Aside from the cancelled grant from the city, it receives funding from its member fees and from marketing fees collected by the Ottawa Gatineau Hotel Association.
“I think it’s not only disappointing, but it’s shortsighted,” says Dick Brown, executive director of the Ottawa Gatineau Hotel Association, which has 56 members, including all major Centretown hotels.
“To withdraw any money from tourism makes no sense.”
In the 2006 city budget Ottawa Tourism funding was $790,000. This year, the city first proposed reducing it to $500,000 but on Feb. 26, city councillors voted to cut all funding for 2007.
“Five hundred thousand dollars is a drop in the bucket in a $2 billion budget, but it means the world to tourism,” says Liisa Peer, policy consultant at the Ottawa Chamber of Commerce.
The decision was made to cut tourism funding because the organization no longer needed the funds, says Somerset Ward Councillor Diane Holmes.
In 2004, Ottawa Gatineau Hotel Association members started voluntarily collecting a three per cent marketing fee on every hotel bill.
The marketing fee significantly increased Ottawa Tourism’s budget so there’s not the same need for city funds, says Holmes.
The city funding covered half of Ottawa Tourism’s operating costs, says Michael Murr, manager of economic development at the City of Ottawa.
It went towards rent, utilities and core staff member salaries. Another portion of the funding was used to support research and industry development.
The marketing fee will now have to make up the bulk of Ottawa Tourism’s budget, says Murr. Originally the fee was intended for promotional purposes, not for covering the organization’s operating costs, says Brown.
“It’s not implemented to replace city funding, that would be counter-productive,” he says.
Thirty-five thousand people are employed in Ottawa’s tourism sector, says Jantine Van Kregten, director of communications for Ottawa Tourism.
It’s the third largest economic sector in Ottawa, surpassed only by the federal government and the high tech sector.
“Cuts to tourism are inconsistent with the city’s overall economic development plan,” says Brown who believes the city should have a role in creating tourism jobs.
If Ottawa Tourism cuts back its promotions, the entire sector will be hurt, says Brown, naming retail, restaurants and any other business that sell goods to tourists as examples.
“If any industry needs a shot in the arm, it’s tourism,” says Peer. Tighter border controls with the United States mean more money is needed to market Ottawa to Americans and to ensure everyone knows it’s still easy to cross the border, she says.
Any effects the cuts do have will not be felt in the next year.
Ottawa Tourism has a contingency plan so no major changes will have to be made until 2008, says Van Kregten. She says she is hopeful the city might reconsider its decision before then.
Other than cuts to tourism, the business community should be mostly satisfied with the 2007 budget, says Peer.
The city’s decision to preserve the economic development industry’s capital budget was considered good news, as was a zero per cent property tax increase.
The decision to fund $1.25 million of the economic development industry’s capital budget, which supports shows, conferences and other events, will also benefit tourism because it will enable the funding of proposals from the sector on a project-to-project basis, explains Murr.
City councillors also remained committed to supporting the expansion of the congress centre, says Murr.
“Ottawa hasn’t been getting the conventions it could have been getting, which means attracting fewer people to the city,” but an expanded convention centre could potentially mean more tourists, says Peer. “I would call this the hopeful side of the picture.”