The Greater Toronto Hotel Association has expressed concerns about the impact of a hotel tax increase implemented for Toronto’s FIFA World Cup games next year, suggesting it could negatively affect tourism beyond the tournament. The Municipal Accommodation Tax (MAT) saw a 2.5% rise in June, with an expected revenue of $56.6 million by next July. According to Sara Anghel, the President and CEO of the GTHA, this increase could discourage visitors and event organizers from choosing Toronto due to decreased competitiveness compared to other cities. Last year, the city council raised the MAT to 8.5% temporarily to cover World Cup expenses, effective until July 31, 2026.
Anghel emphasized the potential deterring effect of the tax increase on attracting conventions and city-wide events, citing concerns about Toronto’s overall competitiveness. She highlighted the challenges the city faces, such as traffic congestion and safety issues, which could further diminish its appeal to potential visitors and event planners. Vancouver also introduced a 2.5% tax on short-term accommodations for its FIFA games, starting in February 2023, while U.S. and Mexican host cities have relied on corporate sponsorships instead of implementing similar taxes.
Despite these concerns, Anghel acknowledged the possibility of Toronto hotels exceeding revenue expectations due to a successful summer and the Toronto Blue Jays’ playoff run. She suggested that any surplus funds raised should be reinvested in tourism initiatives to promote the city during the tournament. City spokesperson Elise von Scheel mentioned the monitoring of MAT performance and potential adjustments based on financial outcomes.
While higher hotel prices may not deter the anticipated influx of World Cup spectators in Toronto next June and July, Destination Toronto CEO Andrew Weir emphasized the positive economic impact these visitors could bring to the city. He highlighted the long-term benefits of hosting the World Cup, anticipating increased global interest in Toronto as a result of the event. Weir also emphasized the promotional opportunities for Toronto during the tournament, aiming to showcase the city’s vibrancy and attract future visitors worldwide.
