As the global economic downturn continues to affect Whistler, at least one accommodation provider is questioning the way the provincial government manages the hotel tax it shares with the resort community.
At the root of the issue is the way the provincial government describes those who must remit the eight per cent hotel tax and the additional two per cent municipal and regional district tax.
The province states that only accommodation providers renting out four or more properties in B.C., which meet certain standards, must collect the 10 per cent tax and remit it to Victoria. Owners with less than three properties don't need to collect the hotel tax.
Many of these owners now reach prospective renters through web-based facilitator companies, which have grown in number as the Internet and self-booking vacations becomes more and more popular.
Property management companies, on the other hand, must charge vacationers the hotel tax on accommodations rented out. This is not a level playing field said Dave Norris, president of WhistlerAccommodation.com.
"It's just an advantage that they have that is not a positive advantage for the collection of the tax, and it is not a positive thing for Whistler resort or any other resort," he said.
WhistlerAccommodation.com, which has been in business since 1989, is so concerned it is looking at re-structuring so that rather than acting as a property manager it will simply be the go-between for owners and renters, thus avoiding having to charge the tax.
"We are reviewing the option to restructure our company..." said Norris in a letter.
Generally property management companies charge owners a fee, say 25 per cent, to maintain and market units for rent. This is usually built into the accommodation cost.
Those owners who maintain their own properties and offer them for rent through facilitator web companies - owner-direct rentals - are not charged fees of this nature. In some cases this can make their accommodations more affordable.
Norris is also concerned that the growth in owner-direct rental will impact the quality of the vacation experience in Whistler.
".... On any given Friday or Saturday night you can see people driving all over the place trying to find a street: Where is Blackcomb Way, where is Spearhead Drive, where is this building?" said Norris.
He has no argument with owners who rent properties themselves in "Mom and Pop" type operations, but he believes that large web-based accommodations providers, with hundreds of homes listed, should have to collect the 10 per cent hotel tax.
Not so says the provincial government. While no one was available to comment on the record during the current interregnum - the period between governments - it was clarified that a web-based facilitator is not considered a property manager. Nor is a web-based facilitator considered to be "offering accommodation." Rather, they are marketing, not offering.
And the web-based companies can act as a go-between for owners and renters for credit card transactions. The government considers that scenario no different than a credit card company taking payment from a buyer to give to a seller. The credit card company is not subjected to sales tax as it is simply the go-between, not the vendor.
Norris has written to Liberal MLA Joan McIntyre about the issue.
"I think it probably warrants a review to make sure that there is some sort of level playing field," said McIntyre, who has been reviewing the issue following correspondence from Norris.
"It could cause some confusion... for some clients who are not sure why in one situation they pay tax while in another they don't.
"I will follow up if I am re-elected, as it is obviously an issue."
Sue Chappel, founder and owner operator of Allura Direct, the largest of the web-based facilitator companies in Whistler, said her operations have been audited and inspected by the Canada Revenue Agency, the B.C. Government Consumer Taxation Branch and the B.C. Business Practices and Consumer Protection Authority. At all times her company has been in compliance.
Allura has been in operation since 1997.
While Allura does not police its advertisers, if it receives a complaint against one from an authorizing body that proves to be true the offender is removed from the site.
"We are completely following the rules," Chappel said, adding that the owner-direct market is probably as much as 10 per cent in Whistler now.
The majority of owners who list on Allura are simply trying to offset the cost of owning a place in Whistler, she said.
"Just to turn on the lights on in a rental property in Whistler can cost between $10,000 and $15,000 a year, that is even before you start paying for the extras," said Chappel.
"The cost of the privilege of owning the property is quite big. Most owners rent it themselves to minimize their financial loss, not to make a profit."
Property managers, on the other hand, said Chappel, are in the business of accommodation.
She takes exception to the suggestion that owner-direct vacationers get a poor experience compared to a more traditional model of accommodation.
Allura, which charges $795 annually to list, runs an arrival support service for its clients and asks owners to provide a local emergency contact for properties. Vacationers also have a check-in login profile that is available anywhere there is web service if the renter forgets or loses details about the property.
"It is just a different product," said Chappel.
"In the end you have to ask, does this product hurt or help Whistler? And I think that is a fundamental question and I, of course, am going to argue that it helps Whistler."
