Fears of a Pan Am Games flop: Toronto faces empty hotel rooms, unsold tickets and angry locals
By Peter Kuitenbrouwer (Financial Post).The mascot for the 2015 Pan Am Games, which open in Toronto next week, is a porcupine named Pachi. The porcupine seems an appropriate symbol. Many across greater Toronto have discovered that the Toronto 2015 Pan Am and Parapan Am Games, like a porcupine, are an uncomfortable creature to embrace.
With a week to go, there are signs that these games, triple the price of the last Pan Am Games, will be an expensive flop — at least when looking at them through an unsentimental lens. It’s true that thousands of athletes will compete in the biggest sporting event in the history of Canada. And the games will give 1,500 accredited journalists a chance to describe the wonders of greater Toronto to viewers and readers from Alaska to the Caribbean and down to Tierra del Fuego. That’s one appeal. “This is a moment when Toronto will look its hot, sizzling, diverse best, and that will be broadcast back to viewers” across Latin America, says Andrew Weir, chief marketing officer for Tourism Toronto.
Still, these are the most expensive Pan Am Games in history, with a budget of $2.5 billion. In economic terms, it is hard to see how Ontario, already running record deficits, will derive a benefit that makes up for the cost.
When it bid for the games in 2009, Ontario produced an economic impact analysis, which concluded that the games would create 26,000 jobs and grow Ontario’s real GDP by $3.7 billion. That report is not public and a spokesperson for Ontario’s Pan Am Games Secretariat suggested a reporter file a Freedom of Information request to obtain a copy. The spokesperson did not respond to numerous requests for an interview with someone who could explain the economic benefit.
But already there are signs that the 250,000 tourists that organizers expect for the Games may not show up. Organizers set the 1.5-million tickets starting at $20, but have sold fewer than half, and the games start in a week. Hotels in Toronto fear they will welcome fewer visitors than they did last summer.
“We are very, very worried,” says Terry Mundell, president of the Greater Toronto Hotel Association, which represents 170 hotels across the city, with 36,000 hotel rooms. “A lot of our hotel partners are running below their levels from last year.” He remains hopeful that guests will book at the last minute.
And, as Mundell points out, city authorities have been sending out conflicting messages to potential fans. They plead with commuters to carpool or use transit during the games or work from home. At the same time, they want everybody to come to town to see the Pan Am Games.
Which is it: come to Toronto, or don’t come to Toronto?
“The overwhelming message of these Games is ‘Stay away from Toronto, it’s going to be chaos.'” says Todd Smith, MPP, Prince Edward-Hastings.
The most tangible symbol of the games to date came this past Monday, when the region began enforcing new, extra restrictive High Occupancy Vehicle lanes on highways. That snarled traffic across greater Toronto and enraged motorists, perplexed why authorities chose to manufacture traffic chaos two weeks before the games even started.
Only journalists accredited to the games, athletes, buses, taxis and cars with three or more occupants may use the lanes. John Tory, the mayor of Toronto and a big booster of the Games, called on the province to let cars with two people use the lanes, which used to count as “high occupancy.” Organizers have not budged.
"Part of our challenge is to get a balanced message out,” says Mundell. “If you are coming in through Porter (Airlines, which flies out of the downtown airport), you are in the heart of the city. If you are coming down for a few days to enjoy it, you can get in. People have to get the message that there is a real reason to come here, and that is the Games. It’s the place to be.”
Also, more than just athletes and tourists will come to Toronto. The International Economic Forum of the Americas shifted its Toronto event from October to July, to coincide with the games, renaming it the Toronto Global Forum—Panamerican Edition. A few high-profile Hispanics will attend, including Daniel Servitje, chief executive of Mexico-based bakery giant Grupo Bimbo, as well as the leaders of Grenada, Bermuda, Aruba and the British Virgin Islands. But the two headliners, Shimon Peres, former prime minister of Israel, and Ben van Beurden, CEO of Royal Dutch Shell, are hardly symbols of the Americas.
“This is a huge opportunity to bring an economic flavour to the games,” insists Nicholas Rémillard, chief executive of the non-profit Economic Forum. “Leaders in health, trade, energy, finance, governance — they will see how Ontario is a good place for investment.”
A key part of the games’ strategy is to market this region to potential tourists.
“We have all been working together for years on this,” says Tourism Toronto’s Weir. “We have hosted hundreds of media from those markets (in Latin America) to build more awareness of Toronto. The economic benefit will be long-term growth in tourism demand in key markets such as Mexico and Brazil.”
But Marvin Ryder, a professor of marketing at the De Groote School of Business in Hamilton, is not so sure.
“The GTA will be wonderfully showcased for 2½ weeks,” he says. “We will be the green leafy Ontario and happy smiling people. But the long-term impact is highly questionable. When it’s over, people won’t remember that we were a part of it.”
Big, glitzy sport facilities, with $500 million in funds from Ottawa, are a key part of the games’ legacy. Hamilton has a new $146-million football stadium for Pan Am soccer games, though it isn’t in its struggling west end where the stadium might have been part of some urban renewal plan. Instead the new stadium went up where the old one was: surrounded by houses, so that it has 22,000 seats and 212 parking spaces.
Toronto has a new $205-million aquatics facility in the east end and a $45-million stadium in the north end. Markham, north of Toronto, has a $79-million gym for badminton, ping pong and water polo. Another jewel is the $56-million velodrome in Milton, paid for mainly with federal money, its track built with spruce imported from Russia.
But who will pay to keep the lights on in these sports chateaux once the athletes leave? Milton agreed to host the velodrome after Markham and Hamilton rejected it as a white elephant.
“My concern is 2016, 2018,” says Rick Malboeuf, a Milton city councillor who voted against the velodrome. “The wood has to be maintained at a certain temperature. How is it going to hold up? There is a honeymoon, but my concern is that the novelty will wear off.” Montreal’s velodrome from the 1976 Olympics became the Biodome; Montreal replaced the cyclists with penguins. Atlanta dismantled its velodrome after the 1996 Olympics.
“Is there enough money, enough volume to sustain a velodrome?” asks Ryder. “Historically that answer has been no.”
Among other benefits, Toronto opened a rail link from its airport to downtown in advance of the Games. The athletes’ village will become a mix of market and affordable homes after the Games.
A year ago the Ontario Chamber of Commerce released a report: Beyond the Finish Line: Ensuring a Successful Legacy for the 2015 Pan Am and Parapan American Games. It raised concerns. Ontario does scant trade with Latin America, the report noted, and needs to do more to attract students from the Americas. It also warned that traffic snarls could hurt Ontario’s trade flows, and added, “many major sporting events have actually coincided with a decrease in tourism as regular tourists and business travellers stay away from crowds.”
Now Allan O’Dette, chief executive of the chamber, is upbeat on the games. His wife has tickets for trampoline and gymnastics events.
“Let’s get on with it,” he says. “The government has taken bold steps on infrastructure. Maybe people might want to step back and celebrate what’s happening.”
Cesar Palacio, a city councillor in Toronto originally from Ecuador, criticized games organizers two years ago for excluding the Latino community. He, too, has changed his tune. “Constructive criticism brought common sense from the bureaucracy,” he says now; an advisory committee of Toronto Latinos has helped shape what the Games will be, and Palacio is ready to party.
“I’ve been buying tickets but most are sold out,” he says. “I was trying to get basketball. It’s sold out. Soccer I got just one ticket.”
Take a sneak peek of the athlete's village and listen to lukewarm resident feedback on the games
