New DMF Rules: Why Alberta Hotels Need to Get Involved Now 

Alberta's new Destination Marketing Fee (DMF) rules will come into effect on January 1, creating a clearer framework for how DMFs can be charged, collected, managed, and spent. For hotels, this is more than a regulatory update. It is a local business issue that impacts competitiveness, guest communication, destination marketing, and how visitor dollars are spent in communities across the province.

DMFs remain voluntary. Hotels are not required to charge one. However, if a hotel chooses to charge a DMF after January 1, it must follow the new rules. That includes clearly showing the fee, remitting the full amount to the designated trustee, keeping proper records, and operating within a designated destination marketing structure.

 

Why this matters for hotels

DMFs are local decisions, but they have real operational and competitive impacts. Local decisions about the DMF rate, geographic boundaries, governance, accountability, reporting, and how funds are used may be made quickly. If hotels are not part of those conversations now, decisions may be made without the input of the businesses that will explain the fee to guests, collect it, remit it, and live with the results.

 

Key changes hotels should understand

• Participation is voluntary. Hotels do not have to charge a DMF, but those that do must follow the new provincial rules.
• DMFs can only be charged in designated areas. A hotel may only charge a DMF where a designated destination marketing organization is in place.
• Hotels and tourism businesses must have a voice. A DMO board must include a majority of directors from accommodation and tourism businesses in the area.
• The local DMO sets the rate. Hotels that charge a DMF must use the rate set for their area, which makes hotel involvement in local decision-making essential.
• Municipalities will not control DMF funds. DMF collection, management, sharing, and spending must remain outside municipal direction or control.
• Plans and reporting are required. DMOs must publish annual plans and report on revenue, spending, participation, projects, and results.
• DMF dollars must support the visitor economy. Funds must be used for eligible activities such as marketing, sales, event bids, destination development, visitor services, research, and reasonable administration tied to DMF work.

 

The new system includes checks and balances, so hotels can have more confidence in how decisions are made, managed, and reported.

DMOs must meet basic requirements. A DMO must be a society or non-profit company. It must have at least one paid staff member and annual operating capacity of at least $500,000.

• DMO governance must change. DMO boards must include a majority of accommodation and tourism experience providers, with a best practice of no more than one representative per ownership group or management company. This means hotels that participate in DMFs need to get involved in DMO strategy and accountability, such as serving on DMO boards, attending meetings and AGMs, voting, and ensuring the voice of local hotels is heard in rate setting, boundary composition, and marketing strategy.
• Plans and reporting are required. DMOs must publish annual plans. These plans must show their goals, DMF rate, board makeup, planned use of funds, and how success will be measured. They must also report on revenue, spending, fund balances, participation, major projects, and results.
• DMF uses are limited. Funds must grow the visitor economy through eligible work such as marketing, sales, event bids, destination development, visitor services, research, and related administration.

 

What hotels can do now

• Get informed. Ask what local model is being proposed, how hotels will be represented, and how decisions will be made. AHLA can help you understand the rules and what they may mean for your property or market.
• Decide whether to participate. Charging a DMF is voluntary, but hotels that choose to charge one need to be ready to meet the rules.
• Take a seat at the table. Attend meetings and AGMs, vote where possible, ask questions, and ensure local hotel operators have a real voice in rate setting, boundaries, governance, accountability, and marketing strategy.
• Prepare your systems. If your property charges a DMF, review booking, billing, remittance, and record-keeping processes now.

 

DMFs and the Tourism Levy are not the same

A DMF is separate from the Alberta Tourism Levy. The Tourism Levy is mandatory and goes into provincial government General Revenue. It is effectively a hotel sales tax. A DMF is voluntary, but once a hotel chooses to charge one, it must show the fee clearly, collect it, remit it, and maintain records under the rules.

 

Get Involved Locally

The most important DMF decisions will happen locally. Hotel owners and operators need to understand what is being proposed in their market, ask who is speaking for hotels, and make sure their property’s voice is heard before decisions are finalized. AHLA will continue to support hotels with practical guidance, but hotels need to be active participants in shaping the local systems they may be asked to operate within.

If your hotel charges a DMF now, or is considering one after January 1, this is the time to review your systems, understand your local governance model, and get involved in the decisions that will affect your property and your destination.

 

If you have any questions, contact Laurie Chandler at lchandler@ahla.ca.

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