Visitors to Niagara Falls will soon face higher hotel bills as the city prepares to increase its Municipal Accommodation Tax (MAT). Starting May 1, 2025, the tax rate will rise to 4% under By-law 2025-009, up from the current 3% implemented in 2024. The tax applies to short-term accommodations including hotels, motels, bed and breakfasts, and vacation rentals for stays up to 28 days.
Tourism is essential to Niagara’s economy, generating over $2 billion annually and supporting 40,000 jobs in the region. These jobs make up about 10% of local employment, spanning hotels, restaurants, arts, and recreation sectors. The region attracts approximately 12 million visitors each year, with the broader area drawing around 14 million total visitors.
Tourism fuels Niagara’s economic engine, creating jobs and prosperity across multiple sectors through millions of annual visitors.
Visitor spending in Niagara County topped $1 billion in 2023, showing an 11.7% increase from the previous year. This tourism boom creates significant economic benefits beyond direct spending. For every $100 million in tourism revenue, the region gains an additional $69 million in indirect economic activity.
City officials say the tax increase will fund tourism promotion, infrastructure improvements, and local tourism initiatives. The revenue will be split 50/50 between the city and designated Destination Marketing Organizations, after administrative costs. Officials believe these investments will enhance Niagara’s status as a premier tourist destination.
The tourism dollars help offset local tax burdens, saving area residents an estimated $1,205 annually in local taxes. This benefit extends across accommodation, food services, and retail sectors throughout the region.
Peak tourist seasons in Niagara Falls include summer months (July-September) and spring (April-June). Visitors primarily come from Canada, the United States, and the United Kingdom, with the 25-34 age group representing the largest demographic of travelers. Bookings made before the implementation date will be exempt from MAT even if the stay occurs after the increase takes effect.
The tax increase aligns with regional strategies to enhance visitor experiences through infrastructure improvements. The focus includes developing experiential tourism, cross-sector partnerships, and digital storytelling to attract more visitors to the Falls and surrounding attractions.
For more information follow how the new hotel tax proceeds follow Marketplace Niagara.
