Destination Marketing Fees

A Destination Marketing Fee (DMF) is voluntarily collected by hotels in some communities. These funds are used for destination marketing and tourism promotion. DMFs are not legislated by government, and they are not a tax or a levy.

DMFs are used to support tourism marketing and product development. They exist in a number of communities in Alberta and around North America. As destination marketing programs are administered locally, questions about how their initiatives are delivered should be addressed directly to specific DMF collectors.

Every property in Alberta with more than four guest rooms is required to collect and remit the Tourism Levy, however not every property participates in a destination marketing program. Hotels may charge a variety of fees, including parking, Wi-Fi, and destination marketing. It is in the sole discretion of the hotel to apply any such fee. Properties that charge a DMF should inform the guest about the fee at the time of reservation and/or upon check in. Guests who want to know whether their hotel charges a Destination Marketing Fee should confirm this at the time of reservation and/or upon check in.

The AHLA encourages consumers who have questions about DMFs to ask the General Manager of their hotel, or to the DMF collector in the community where they are staying.

The AHLA supports the transparent and accountable collection and expenditure of DMFs to promote tourism marketing for the benefit of all Albertans.

Consider Before Implementing A DMF

Hotel groups considering implementing a DMF in their area are encouraged to consider the following questions:

• Do you have a strong local hotel group with engaged members?
• Is your community a tourism destination?
• Do you have enough local room nights annually to generate the amount of revenue required to mount a meaningful marketing campaign?
• Do you have a destination marketing organization (DMO) with the capacity to develop and execute the marketing plan?
• How will you define and measure success?
• How will you hold the DMO accountable?
• Who will act as your trustee?

Properly Calculating DMF

*Please note, this is a hypothetical calculation of a 2% DMF. DMFs vary across Alberta. 

If your hotel collects DMFs, you must ensure you are calculating them correctly. DMFs form part of the cost of accommodation. Both the GST and Tourism Levy are calculated separately on the DMF amount.

For a hotel that added a 2 % DMF on a $100 guest room, the calculation on the folio should be:

DMF Voluntary Code of Conduct

The AHLA developed the Voluntary Code for DMFs for DMF collectors based on the AHLA’s  Recommendations for the Governance and Administration of DMFs.

The Code advises DMF collectors to:

• Create the DMF collector as a legal entity with its own bylaws.
• Develop a strategic plan and business plan for the DMF collector, and a marketing plan for how funds will be used.
• Engage stakeholders.
• Develop policies that promote accountability.

DMF Task Force

In 2011, the AHLA Board of Directors created a task force to develop an industry-driven solution for the implementation, governance, and administration of DMFs that complemented the existing tourism marketing model. When the task force was created, there were concerns about DMFs that had the potential for consumers and elected officials to question their legitimacy, including:

• Disparate and increasing DMF fee levels.
• Inconsistent application of DMFs across the province.
• Inconsistent governance, participation, and partners between communities.
• Inadequate measures of the effectiveness of the DMF programs.
• Inconsistent accountability and transparency of the administration and management of DMFs.

After consulting with individuals involved in private and community DMFs, the Task force recommended:

• The AHLA work with industry to encourage DMFs to review and implement the elements contained in its Recommendations for the Governance and Administration of Destination Marketing Fees. 
• The creation of a voluntary code of conduct for DMFs based on key elements of the Recommendations.

Since most tourism marketing dollars are generated through direct taxes and fees on our industry, AHLA members should ensure the accountability of tourism marketing expenditures on all levels. DMFs are not effective in all areas and, in some cases, are promoted by municipalities to encourage economic growth rather than tourism.

Tourism Levy

The Tourism Levy Act requires that providers of temporary accommodation in Alberta collect and remit the levy to Alberta Finance Tax and Revenue Administration. The AHLA estimates that 1,200 hotels and motels from communities across Alberta collect and remit the levy. Roughly 96% of the guest rooms on which the levy is charged are owned by AHLA members.

When the Tourism Levy came into effect on April 1, 2005, the Minister stated that all of the funds collected would be used for tourism marketing and development.

Our ask:

Allocate the full amount of the Tourism Levy to Travel Alberta through legislation.

Exempt rooms provided to contractors (sub-contractors) for the purposes of capital improvements and maintenance from having to remit the Tourism Levy. The AHLA maintains the position that the full amount of the Tourism Levy should be allocated to these types of initiatives.

Effective October 1, 2024, online travel agencies and short-term rentals must also pay the Tourism Levy.

It is up to you to ensure you are collecting and remitting the levy properly. A number of hotels around the province have been audited, and some have received significant assessments for not charging the Levy properly. 

Review the Government of Alberta’s Tourism Levy Top 10 Tips.

Exemptions from the Levy

As stated on the Government of Alberta website, the levy does not apply to:

• Rooms occupied continuously for 28 days or more by the same individual.
• Accommodation provided by a person who does not list the accommodation on an online marketplace where:

  • the purchase price for the unit of lodging is less than $30 per day or $210 per week

  • the person’s gross revenue from the provision of lodging in Alberta in the previous 12 months was less than $5,000; and

  • the gross revenue in the next 12 months is reasonably estimated to be less than $5,000.

• Social care facilities, nursing homes, or hospitals.
• Licensed supportive living accommodation.
• Accommodation provided on a reserve in Alberta to a person or entity exempt from tax under the federal Indian Act.
• The Government of Canada (direct billing).
• Members of the diplomatic or consular corps.

The operator can omit the Tourism Levy charge only if an exemption condition is known at the time the room is paid for and is recorded on the invoice. Operators must retain relevant documents to support all tax exempt revenue recorded. These documents are subject to inspection and audit by appointed representatives of the Provincial Treasurer.

If at first the levy is charged, and the qualification for an exemption is later established, the operator may refund the levy to the payer and deduct the amount on its next tax return. The operator should then retain the documentation to support its own deduction.

 Tourism Levy Information