A cash grab called Destination Marketing Fee

Meet Destination Marketing Fee or DMF, an equally ugly cousin of the “Resort Fee”. DMF is an item on hotel and restaurant bills that most tourists ignore, assuming it is part of taxes. Many cities in Canada and USA levy this fee on the customer without much explanation.

What is a DMF

DMF is a fee levied by hotels who contribute to a collective fund  used for promotion, marketing and “other tourism development initiatives”. Hotels in cities like Toronto, Montreal, Ottawa, Niagara, Washington, New York City, Chicago, to name a few, can charge you up to 3% on room rates, as DMF.

Do you have to pay?

It depends. In Ontario (Toronto, Ottawa, Niagara, Kingston etc.), this fee is voluntary and you can ask for it to be removed from your hotel bill. Same applies in Alberta. Understandably hotels don’t promote the voluntary nature of this fee and staff  are quick to quip “it’s a tax”. However, it is NOT! The paper trail is just as ambiguous as the fee – The hotel collects and transfers to a local association, which then transfers it to a non-profit marketing organization. And you can only hope they do what they are supposed to with it. Who monitors if the hotel actually transfers all the fee collected? Not the government! DMF is not legislated by the government hence not monitored by them. Here is how the Ontario Ministry of Tourism, Culture and Sport describes it;

Typically, participating hotels have collected these fees of their own accord and remitted them to their accommodation industry association. In turn, the association then transfers funds to a local or regional non-profit destination marketing organization for marketing activities promoting their city or region as a whole. Contributions to DMPs from participating hotels are calculated in a number of ways, including for example, as a flat rate per room night sold or a percentage of room revenues, typically up to 3%. DMPs or other industry fees are not legislated by the government and the monies collected do not go to government.

In British Columbia or New York City on the other hand, the fee is assessed by the government and makes this fee mandatory. So it depends on the city/region you are in and how firmly they have their hands in your pockets.

The Hotel Bill

3% may not seem a lot until you see the breakdown over several days of your stay at a hotel. Imagine you scored a good deal to Niagara region for a week, your room rate of $200 could look like this;

Room Charge: $200 x 7

Room HST: $26 x 7

Destination Marketing Fee: $6 x 7

Destination Marketing Fee HST: $0.78 x 7

Suddenly your room rate is $232.78/night, of which the additional DMF $6.78/day amounts to $47.46 for the week! In a hobby where I track every point earned and spent by the cent, this amount is a serious ding. Add the 3% cash grab on restaurant bills and other activities and it turns into downright robbery. The kicker, staff is only trained to explain this fee IF you dispute it. Getting it removed may even require a manager’s approval, but it can be done.

Take Away

This wicked fee comes in various other forms and acronyms. Beware of DMP (Destination Marketing Program), DMDF (Destination Marketing and Development Fee), PF (Promotion Fee), TIFF (Tourism Infrastructure Funding Fee); they all mean the same thing. You are essentially throwing your money in a marketing well. While I always opt out of the fee where its voluntary, my gripe is that it appears on bills by default, alongside other taxes. I think it should be treated as a donation and customer should be asked at check-out if they would like to donate money to a corporate giant, before adding it to a final bill. No matter how you slice it, this fee comes with zero clarity and no government oversight in many cities. Destination Marketing Fee gained further notoriety when it was highlighted in this CBC Marketplace episode .

Have you noticed this fee on your hotel bill? What are your thoughts?