The Greater Toronto Hotel Association has expressed concerns about the potential negative impact of a hotel tax increase implemented for Toronto’s upcoming FIFA World Cup games on overall tourism to the city. The Municipal Accommodation Tax (MAT) saw a 2.5 per cent rise starting in June, aiming to generate $56.6 million by the following July.
Although the increase may seem modest, Sara Anghel, the President and CEO of the Greater Toronto Hotel Association (GTHA), highlighted that it could discourage certain visitors and event organizers from choosing Toronto. Anghel emphasized that escalating taxes could diminish the city’s competitiveness in attracting conventions and large events compared to rival cities.
Last year, Toronto’s city council approved a temporary MAT hike to 8.5 per cent to offset expenses related to hosting six World Cup matches. This increase took effect on June 1 and is set to remain until July 31, 2026. Anghel acknowledged the city’s financial needs but stressed that the raise is substantial. She expressed concerns that Toronto’s high tax rates could lead to missed opportunities for hosting conventions and city-wide functions.
Drawing a comparison, Vancouver has also introduced a 2.5 per cent tax on short-term accommodations for its seven FIFA games, effective since February 2023. In contrast, U.S. and Mexican host cities have opted for extensive corporate sponsorships and alternative strategies.
Despite concerns over the tax hike, Toronto hotels may be gathering necessary funds faster than anticipated, fueled by a busy summer and the Toronto Blue Jays’ successful playoff campaign. Anghel, a member of Toronto’s FIFA advisory committee, plans to monitor the tax revenues closely. She suggested that any surplus funds should be reinvested in tourism initiatives to enhance the city’s profile during the tournament.
City spokesperson Elise von Scheel mentioned that excess revenue beyond projections could lead to adjustments or budget reallocations to support FIFA requirements and the tourism sector. The anticipated influx of World Cup spectators next summer is unlikely to be deterred by higher hotel prices, according to Andy Weir, CEO of Destination Toronto. He anticipates a positive impact on various business sectors as visitors engage in games, activities, and city attractions.
Weir believes that the World Cup will not only benefit Toronto in the short term but also attract global visitors in the long run. The event’s broadcast will showcase Toronto’s vibrancy and energy to a worldwide audience, potentially boosting future tourism. Destination Toronto plans to intensify tourism promotion efforts in December following the FIFA team announcements, aiming to capitalize on the event’s global exposure and attract targeted international markets.