Talks to end a conflict between the Penticton hospitality industry and city hall have broken down.

Mayor Litke told Oliver Daily News that an agreement was to be signed Monday January 6th after a handshake last week – but a communication received Saturday has nixed the deal. That prosed deal between the City of Penticton and the PHA (Penticton Hospitality Association representing hotels and motels.

Litke says no one will really win if the matter goes to court. He says it’s about the money, turf and at least one person who could lose a job.

Council has asked the Penticton Hospitality Association to hand over control of a two per cent hotel room tax, which amounts to about $400,000 annually,  to Tourism Penticton.

From Global Okanagan

PENTICTON — Every time a tourist checks in and spends the night in the City of Penticton, a 2 per cent fee is added in their bill.

The Penticton Hospitality Association (PHA) uses this hotel room tax to promote the city.

In 2012 about $400-thousand dollars was raised, but only a quarter of that money was used.

“We found out a significant amount of money was not used during the summer, and that was a major concern for us, because every dollar collected ought to be spent and not to be sitting in the bank account,” explains Penticton Mayor, Garry Litke.

Earlier:

The Penticton Hospitality Association has hired a Kelowna law firm to represent them in their legal battle with the City over the hotel room tax issue.

The services of Alf Kempf with Pushor Mitchell LLP were retained.

“The city of Penticton’s recent attempt to unjustly wrest control of the  Hotel/Motel MRDT (Municipal and Regional District Tax) funds away from the good stewardship of the PHA, flies in the face of public opinion and the will of the business community generally,” said President Rob Appelman.  “The immediate effect of their decision is to all but pull the plug on tourism for the people of Penticton and, in so doing, also jeopardize the positive inroads, the PHA has made to date.”

ODN attempted to contact two members of the PHA board of directors including Mr. Appelman but we were met with “this number no longer in service”.

David Prystay of the Lakeside Hotel said he did not want to comment as he is not on the PHA board.