New municipal-led tourism marketing/management plan may face legal battle

While the municipality prepares to launch a municipal-led destination marketing organization, a local group that wanted the job, seeks more discussion and possibly legal action.

Richard Barrett, Stay PEC chair, addressed council Tuesday night, asking to delay a decision until the business community and stakeholders can let council know whether they prefer a municipal-led, industry-led or combination of both for a destination marketing organization.

Council approved the municipal-led model and plans public consultation for January. It seeks bylaws to include representation from stakeholders broader than accommodation sector, in the bylaw which could include committees to involve the arts, restaurants, wineries, breweries and all others involved in tourism.

Council, in October, directed staff to establish the municipal Destination Marketing and Management Organization (DMMO/DMO) to help meet requirements laid out in legislation governing the collection of Municipal Accommodation Tax (MAT). This requires an organization independent from the municipality, and it receives half the funds collected for ‘tourism promotion’. The municipality receives the other half. For the past seven years, the County has been acting as its DMO under the ‘Visit The County’ brand.

The Stay PEC (formerly Prince Edward County Accommodation Association) board of directors is not in support of the municipal organization and states that as the County’s only eligible tourism entity entitled to a portion of the MAT, it was ready and willing to become the DMO over an “arms-length” municipal corporation.

Stay PEC was established in 2018 as an accommodations association whose original nine members contributed two per cent of annual room night revenues to a shared marketing fund. On average, the group raised $100,000 per year. The report to council states the funds were spent on staff and administration costs, festival and event sponsorship and consultation fees for marketing support for members.

Its current membership represents 20 large accommodators (including as The Waring House, The Drake, Huff Estates, June Motel, Picton Harbour Inn, Sandbanks Vacations, The Eddie) and smaller accommodators with a focus on its membership.

StayPEC was not recommended at council’s meeting in October as the potential marketing organization. The organization had expected a collaborative multi-year agreement.

“A DMO requires a different lens, focusing on strategic investments in the destination as a whole, with the goal of attracting visitors, improving the visitor experience and, in the case of Prince Edward County, seeking balance between visitor and tourism sector needs and livability of the community for residents,” said Rebecca Lamb, the County’s Destination Development and Marketing Co-ordinator, in her report to council for Tuesday night.

A proposed memorandum of understanding (MOU) with StayPEC had been prepared, offering the group a one-time payment of $100,000 (from MAT funds in 2021) to reflect the funds raised prior to the MAT coming into effect. In exchange, StayPEC would forfeit any claims/expectations to further MAT funding, or to act as the DMO. The MOU was presented to StayPEC Nov. 29.

Barrett noted the StayPEC board of directors does not support the MOU and is told by its legal counsel it deserves at least $104,000 annually. “We will not be signing it in its current state.”

The municipality will continue to seek agreement by February, 2022 or face a legal matter.

Council also approved spending up to $50,000 from the municipal portion of the MAT collection to support the creation of the DMO (to cover up to $10,000 for incorporation; up to $20,000 for consultant fees for board governance and creation of bylaws and up to $20,000 for a three month contract extension to retain the existing digital marketing and communications analyst through the transition).

Plans for the municipal DMO are to go beyond marketing and promotion and take on some of the responsibility around management of visitors and the impacts of tourism, working closely with the County, which retains elements such as parks, beaches, boat launches, trails and wayfinding.

Public consultation is expected in January with results, and a list of core competencies required for a new board, by the Feb. 8, 2022 council meeting when the Visit The County new bylaw is to be presented.

Councillors John Hirsch, Phil St.-Jean and Bill Roberts were appointed as interim directors for the purpose of the application for the certificate of incorporation. A full board is expected to be appointed prior to April 29, 2022.

Council also heard a report from Greg Klassen, of Twenty31 Consulting, on the transition to a destination marketing and management organization action plan. The municipality and the consulting firm have been working together since October to outline analysis, best practices, comparable models, recommendations and the path forward in a three-phase approach.

Lamb adds that following the transition, municipal dollars will no longer be used to promote the County as a destination.

“Less than one per cent of residential tax bills currently goes to tourism marketing or promotion, yet those dollars will be freed up to spend on other community priorities. Until 2021, all tourism marketing and management efforts were paid for through a combination of grants, user-generated fees and municipal taxes.”

Total MAT colleted for the period ending Nov. 24, 2021 is $871,246 with administration costs of $114,016 for a net MAT of $757,229.

The net is to be divided 50/50 to the organization and the municipality – though the numbers are expected to increase as final remittance for MAT concludes Jan. 31, 2022.