Whistler sees sharp drop in MRDT revenue

The Resort Municipality of Whistler’s (RMOW) fourth-quarter financial report showed revenue and spending were in line with budget expectations—but a notable decline in hotel tax revenue is raising red flags.

Municipal and Regional District Tax (MRDT) revenue dropped by 11.9 per cent in Q4, the largest quarterly decline since the pandemic, according to preliminary, unaudited information in the RMOW’s financial system.

In a March 25 presentation to council, Carlee Price, the RMOW’s chief financial officer, pointed to hotel tax revenue and parking income as indicators of shifting tourism patterns in Whistler’s economy.

“At the time of the third-quarter report, I noted that both lines appeared to be rolling over. What had been an upward trend appeared to be slipping and potentially heading down. The fourth quarter got even more interesting,” Price said. “MRDT continues to hook down, and parking is continuing up. These trends can indicate an underlying trend in the overall economy, with less tourist visitation from international visitors.”

Price hesitated to identify a definitive cause, but expressed concern because excess MRDT revenue supports employee housing initiatives—a funding model approved by the province in 2023.

“The fact that the excess is what supports employee housing means that the total revenue amount is vitally important,” she said.

Price likened the MRDT model to a tower of champagne glasses: the top tiers are filled first—with funding going to tourist activations such as the Whistler Summer Concert Series, then to projects like lamppost banners and, in 2024, Whistler’s contribution to the Invictus Games.

“Only when those glasses are full does the money—or champagne—flow to employee housing initiatives,” Price said.

If the trend continues, Whistler’s employee housing program may soon be parched. According to the unaudited report, only $1.4 million was transferred into the employee housing reserve this fiscal year, down from $2.4 million in 2023. Price’s report noted MRDT funds were “critical” to the Whistler Housing Authority’s purchase of Lot 5 in Cheakamus Crossing last year.

“Based on the current economic outlook, it seems that another decline in contribution in 2025 is possible,” the report said.

Councillor Ralph Forsyth asked how many quarters of decline it would take before council should start worrying.

“I’ve been worried for a while,” Price replied.

When asked what data might explain the decline, Price suggested the municipality reach out to Tourism Whistler.

In an email to Pique, Tourism Whistler’s Research Department attributed the decline in MRDT and Online Accommodation Platform (OAP) revenues (which also hand over MRDT), to several overlapping factors.

The department said combined revenue from hotels and OAP was down by $1.3 million year over year, and approximately 80 per cent of the decrease occurred during the winter season.

The 2023-24 winter season brought below-average snowfall, which led to lower occupancy and average daily rates. Meanwhile, international room nights declined by four per cent. Tourism Whistler said global inflation and economic uncertainty are reducing discretionary travel spending, and that overall visitor spending in Whistler fell below 2023 levels.

Independent vacation rentals were hit harder than hotels, with MRDT payment from OAP providers down 13 per cent, compared to a seven-per-cent decline among traditional hotels and property managers.

Tourism Whistler also noted strong pent-up demand in 2023, particularly from key markets such as Australia, had inflated that year’s numbers following the post-pandemic reopening of global travel—making 2024's softer performance starker by comparison.

Forward outlook includes impact of U.S. tariffs

In the second half of her presentation, Price addressed the potential impact of U.S. tariffs on RMOW operations.

“There are lots of reasons to think the RMOW’s spending will not be affected,” she said, noting most goods the municipality purchases are not directly impacted, and many supplier contracts include clauses that lock in prices.

“Ultimately, however, no corner of the economy—no good or service—is truly immune.”

Price compared the potential fallout from tariffs to a train: the first cars—companies buying tariffed goods—are hit first, but impacts eventually reach every car behind them.

Higher costs for materials like steel could trickle down to pipes, appliances, laundry equipment—and eventually restaurant meals.

“The RMOW needs to be prepared for and mindful of this potential outcome, while recognizing the effects will not be immediate or necessarily quantifiable,” Price cautioned.

She noted while tariffs can drive up inflation, interest rates often rise in response. In 2024, the RMOW benefited from high interest rates on reserve balances and relatively low inflation.

The contrast was stark compared to 2021 to 2023, when inflation soared but interest earnings lagged.

“So, on the interest income side, for 2024, cause for celebration—and also cause for concern. Maybe less of a silver lining, or a bronze lining—potentially aluminum,” Price said.

Revenue and spending highlights

Overall, municipal revenue slightly exceeded expectations, reaching 101 per cent of the annual budget. Operating spending came in at 100 per cent.

Property taxes and user fees were higher than anticipated, while parking revenue jumped 24 per cent over 2023, suggesting increased local visitation. Meanwhile, MRDT revenue dropped 11.9 per cent year over year.

Recreation and transit fares posted strong gains.

On the expense side, departmental spending rose 10.7 per cent year over year. RCMP, the Whistler Fire Rescue Service and the building department saw increases of about 30 per cent, and together make up 19 per cent of total departmental spending.

“On the other side of the coin, we have departments that are growing quite slowly. These tend to be the low single digits year over year, or even down year over year,” Price said. “These categories together represent seven per cent of total spending. It is very difficult, obviously, to offset fast rates of growth in large categories by constraining growth in small categories, and so overall, expenditures rise when the big departments grow.”

In 2024, the RMOW spent $30 million on projects, including upgrades to watermains in Creekside and Emerald, improved heating at the Meadow Park Sports Centre, and replacement of aging parts of the water system and tech infrastructure.

Long-term investments held by the RMOW totalled $59,199,121 in 2024, primarily in low-risk government bonds and investment funds.