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Politicians have endorsed hiking London’s hotel tax, even if some hotel and business owners don’t agree with it.
Councillors voted 13-1 at a meeting Tuesday of the strategic priorities and policy committee in favour of a motion raising the municipal accommodation tax to five per cent from four.
The tax is charged on hotel, motel and short-term rental stays through sites such as Airbnb.
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“This would be the first increase we’ve seen here in London, realizing some cities have already raised theirs and some are already above ours,” said Coun. Elizabeth Peloza, one of council’s three representatives on the Tourism London board of directors.
Coun. Jerry Pribil voted against the increase, Coun. Skylar Franke was absent, and all others voted in favour.
Revenue from the tax, brought in by the city in 2018, is split in half. Half of the money goes into a city reserve fund for tourism-related infrastructure, while half goes to Tourism London for marketing and events.
“It brings in funds from tourists, visitors to our city, to help enhance the offerings that they get and enjoy better services, and then Londoners also get the benefit of money coming in from out of town to enhance their experience,” Peloza said.
Tourism London received letters from the airport, Budweiser Gardens and Grand Theatre supporting the increase, she said.
While no specific timeline was set for the change to take effect, Peloza and deputy mayor Shawn Lewis’s motion said it should happen no later than January 2026. Staff said it would take a little as three months to set in motion.
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Pribil pushed back on the proposed tax increase, saying the city and Tourism London should consult with hotels and the wider accommodation industry before making the change.
“Based on the last six years, they’ve been great in collecting these funds for us, I do believe that we should give them this opportunity,” he said. “If we do that . . . I think we still have time to implement it.”
Lewis, another council representative for Tourism London, said talks have been happening since April, and it is “a political decision” rather than an industry one, as all hotels aren’t likely to agree.
During talks with tourism industry officials at the Association of Ontario Municipalities conference, Lewis said he learned London was behind several other cities including Windsor and Hamilton in increasing their tax.
“There are a couple of hoteliers who don’t like it, and continue to insist that we are taking from their profits, which is not true,” Lewis said. “There are others that absolutely recognize the value of this and are supportive of it.”
The value can be seen in the ongoing renovations of Budweiser Gardens, Lewis said, of which the city’s contribution is coming from its hotel tax reserve fund.
Pribil said the sector feels left out of the talks, and unsuccessfully pushed for a deferral of the increase.
“Everything that was said . . . I don’t disagree with them,” he said. “All I want is the sector that’s collecting the money for us to have the opportunity to give their feedback and their comments.”
The move still will require final approval at council’s meeting on Sept. 24.
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