The ROI Effect of the Pan Am Games on Toronto Tourism
Do mega-dollar, giant sporting events actually help tourism over time, or are they just short term spectacles with little ROI?
With the Pan Am and Parapan Am Games in Toronto, the naysayers, nitpickers and nervous nellies are all over the media opining on everything from the traffic congestion, to security and the slow ticket sales. However, there is little being said about the long term effects on tourism that the games will bring to Toronto and Southern Ontario. Beyond the obvious boost in tourism spending during the two weeks of the games, is it just a blip or will there be lasting benefits?
Our years of involvement with clients in the travel & tourism industry have given us some insights into events and promotions, from the ones that can measurably be considered successes to those that are only ephemeral curiosities. Are the giant one-off events effective in boosting tourism or is a destination better off with smaller, much less expensive annual events that build and sustain tourist arrivals and spending over years?
History tells us that events like the Pan Am Games and the Olympics, while good at raising short-term awareness of the destination, have little to no long term positive effect on tourism. In fact, two years after the 2010 Vancouver Olympic Winter Games, tourism in B.C. actually dropped. The number of visitors in 2012 were 13% below the 2008 arrivals total. The Toronto Pan Am Games will be the largest multi-sport event ever held in Canada with more athletes than the Vancouver Olympics and an accredited media pool of some 1,500 journalists from 41 countries. You’d think that all those media sending home stories of how much they love the city will bring a horde of new tourists. I think it’s safe to assume that the host city of the previous Pan Am Games, Guadalajara, Mexico, hasn’t seen a massive surge in tourists from the U.S. and Canada as a result. So will Toronto be any different? Probably not.
Hotel bookings just one week prior to the games are well under original predictions. Some of the 170 hotel members of the Greater Toronto Hotel Association are actually reporting lower occupancy than the same time last year. Plus, hotel prices often spike as much as 100% during mega-games elsewhere, but hotels in Toronto are charging just an average of 10% more because there isn’t the demand.
We’ve worked with clients on all types of events, from the Commonwealth Games to small annual music festivals, and it’s clear that the real ROI comes from consistent, annual events that can grow in popularity and bring predictable benefits to the tourism sector over time. There are some strong arguments for a destination hosting the big one-offs like the Pan Am Games. They do bring infrastructure upgrades and certainly.
Paul Chater is a Partner and in charge of PR at Marshall Fenn.