Pan Am boom is a bust for many downtown Toronto businesses

The Pan Am games were supposed to be one of the busiest times of the year, not only for traffic, but also for businesses around the games hoping to get an influx of tourists and spectators.

Instead, businesses in downtown Toronto say they have been struggling to even get the usual number of customers into their stores since the start of the games, despite sales data showing a small increase in consumer spending on the opening weekend.

For some owners and managers, this has meant cutting hours, hiring freezes and even layoffs, as the streets are emptier than expected, and the boom in business is turning out to be anything but.

When Toronto was announced as host city for the 2015 Pan Am games, many touted the benefit to the local economy. Hosting the games would mean tourists, and tourists would be spending money, especially on nights out in the city.

Ghanshyam Joshi, co-owner of Aroma, an Indian restaurant on John and King Streets, believed that would happen. He hired two part-time temporary workers, anticipating how busy things would get. Even without any traffic from the games, Mr. Joshi said he was expecting tourists from the United States to come and spend money, taking advantage of the weak Canadian dollar.

“This is usually the time we get a lot of Americans,” he said.

Instead, he says not only has there not been an increase, traffic has been even slower than usual. Regulars are avoiding the area because they don’t want to deal with tourists. But the tourists aren’t coming, either, he said.

“It’s much less than the summer slump. I’m amazed [by] that,” he said. The two part-time workers Mr. Joshi hired had to be laid off, he said. One of them is on for another week, but then he’s gone as well.

Jason D’Anna, co-owner of Parlor Foods & Co., a restaurant on King Street, said he saw a little bit of traffic on the day of the opening ceremony. But since then, things haven’t picked up.

“It’s not what I was expecting it to be … I mean especially this district, a majority of the hotels are here. … We really anticipated a lot bigger and better,” he said.

Even Hooters wasn’t immune from the slump. Jimmy Chan, general manager of the downtown Toronto location on Adelaide Street West, said he wasn’t expecting an increase for the games, but still wasn’t ready for how slow things would be.

“We weren’t expecting it to be this bad. … Percentage wise we are down in the neighbourhood of around 30 per cent,” he said.

Usually Mr. Chan hires new people for the summer. Instead, he said there’s a hiring freeze.

“Between June 15 to July 31 we would add about 10 to 15 employees … we’re not going to be doing that this year,” he said.

Consumer transaction data from Moneris shows a slight increase during the opening weekend of the games, from July 10 to 12. In the downtown area from Bloor to Waterfront, Jarvis to Bathurst, spending was up about eight per cent from the same weekend in 2014, and almost four per cent up from a week before.

Hotels, restaurants and entertainment spending saw some of the highest increases week-over-week. Restaurant spending was up almost 11 per cent from the week before, while bar spending was up almost 20 per cent.

Liam Gilhooly, a manager at Gabby’s Grill and Bar on King Street, said business has been better than usual.

“We’ve seen a lot of tourists come in, from Costa Rica, from Brazil, from Mexico. A lot of Americans, which is fantastic, because they spend money,” he said.

However, the customers Mr. Gilhooly usually sees have skipped town for the duration of the games.

“Our regulars are like our family here. We keep in contact with them, saying ‘Why aren’t you coming in?’ and they’re like, ‘I don’t want to deal with tourists,’” he said.

But for many, the numbers haven’t translated into more customers. Mr. Joshi said he’s given up hope for more customers between now and July 26, the end of the Pan Am games.

“It’s a national pride to host, pride for Toronto. That’s something different. But … I don’t think it helped many businesses here,” he said.

 By: Globe and Mail