CITY CLERK

Clause embodied in Report No. 9 of the Economic Development and Parks Committee, as adopted by the Council of the City of Toronto at its meeting held on October 29, 30 and 31, 2002.

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Toronto Tourism Sector 2002 Performance Update (Various Wards)

(City Council on October 29, 30 and 31, 2002, amended this Clause to provide that the following Members of Council be appointed to the Tourism Sector Advisory Committee:

- Councillor Brian Ashton; - Councillor David Miller; - Councillor Denzil Minnan-Wong; - Councillor Joe Pantalone; and - Councillor Kyle Rae.)

The Economic Development and Parks Committee recommends the adoption of the report (September 30, 2002) from the Commissioner of Economic Development, Culture and Tourism, subject to adding:

“(a) the composition of the Tourism Sector Advisory Committee be amended to include as voting Members a representative from Exhibition Place, the Toronto Transit Commission, the Toronto Zoo and the Cultural Sector; and

(b) the Budget Advisory Committee and the Commissioner of Economic Development, Culture and Tourism be requested to protect and enhance the budget of Tourism Toronto during the 2003 budget deliberations due to the sensitivity of the industry at this time.”

The Economic Development and Parks Committee reports, for the information of Council, having received the report (September 9, 2002) from the Commissioner of Economic Development, Culture and Tourism.

The Economic Development and Parks Committee submits the report (September 30, 2002) from the Commissioner of Economic Development, Culture and Tourism:

Purpose:

To provide further information on the tourism sector as requested by the Economic Development and Parks Committee at its September 12, 2002 meeting. Toronto City Council2 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1

Financial Implications and Impact Statement:

There are no financial implications resulting from the adoption of this report.

Recommendations:

It is recommended that:

(1) the Economic Development, Culture and Tourism Department work with representatives from the tourism sector, including the City’s ABCs, to identify strategies to revitalize Toronto’s tourism economy;

(2) City Council establish a Tourism Sector Advisory Committee to look into the revitalization of the tourism industry in Toronto; and adopt the terms of reference (Attachment No. 1) for the Advisory Committee;

(3) the Economic Development, Culture and Tourism Department present to City Council in early 2003 a five-year Tourism Development Action Plan that takes into consideration the work of the Advisory Committee;

(4) City Council reaffirm its commitment to request the Provincial Government to approve and expedite the implementation of a hotel room tax or levy; and all proceeds raised from the tax be directed to marketing Toronto as a business and leisure travel destination;

(5) the Commissioner of Economic Development, Culture and Tourism report to the Economic Development and Parks Committee on an semi-annual basis on the state of tourism in the City of Toronto; and

(6) the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Background:

Tourism is a key economic activity within the City. In recent years, Toronto has experienced a gradual decline in tourism. In other North American regions tourism has increased. The Toronto Tourism Sector 2002 Performance Update, presented to the Economic Development and Parks Committee on September 12, 2002, illustrated that the tourism sector in Toronto is experiencing significant declines. The slippage in market share in Toronto can largely be attributed to two factors. First, other jurisdictions have more financial resources for tourism destination marketing. Second, sound long-term strategic planning, progressive tourism policies and renewed investment in attractions, facilities and products are making other North American cities more desirable for business and leisure tourism.

The purpose of this report is to address issues deferred for consideration resulting from the presentation to the Economic Development and Parks Committee on September 12, 2002 of the Toronto Tourism Sector 2002 Performance Update report and to present a co-ordinating strategic approach to improve the outlook for this important sector of the economy. Toronto City Council3 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1

Comments:

Strategic Planning

Sound strategic planning is the key to success for long-term growth of any sector of the economy. The Economic Development Strategy adopted by City Council in August 2000 identified tourism as one of the three largest economic clusters in Toronto. The creation of the Tourism Division in the Economic Development, Culture and Tourism Department in 2002 represented the first step to reinforce the City of Toronto’s commitment to building the strength of the tourism sector. One of the first objectives of the Tourism Division will be to immediately work with the representatives of the tourism industry to expedite a collaborative and results oriented tourism action plan for Toronto.

Toronto’s last Tourism Development Strategy was completed in 1994. It was developed in partnership with the Municipality of Metropolitan Toronto, the Metro Toronto Convention and Visitors Association and the Ontario Ministry of Tourism and Recreation and funded partially through the Canada-Ontario Tourism Development Agreement.

The strategy presented six primary action steps:

(i) Develop a clear, consistent image supported by an innovative marketing program. (ii) Develop Toronto as a gateway City. (iii) Pursue additional convention and trade show potential. (iv) Gain leverage from regional demand generators such as Niagara Falls. (v) Enhance Metro Toronto’s position as a regional centre. (vi) Develop Metro Toronto’s unique selling propositions.

Two of the six actions have been achieved. Toronto’s Pearson Airport expansion and the planned expansion and renovations of Union Station clearly establish Toronto as the main gateway to Canada. The Metro Toronto Convention Centre and National Trade Centre expansions have been completed. The four remaining actions have not been accomplished but they still remain valid objectives.

The Tourism Investment Study presented to Council in May 2002 also made some strategic recommendations to address how more investment in tourism projects could be generated as well as confirming the need for more resources to be dedicated to tourism marketing. The study examined Toronto’s tourism infrastructure in comparison to competing North American cities.

The Tourism Division of the Economic Development, Culture and Tourism Department has been established to work with the tourism industry to develop an action plan for tourism. The plan must be developed with the guidance and support of the tourism industry. The Tourism Division needs to work with Tourism Toronto, City Agencies such as the Toronto Zoo, BIAs and representatives from all parts of the tourism industry.

It is recommended that a tourism sector advisory committee of the Economic Development and Parks Committee be established to oversee the development of a five-year Tourism Action Plan. Toronto City Council4 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1

The Committee would be comprised of Councillors and senior tourism sector leaders. Terms of Reference for the establishment of the Committee are presented in Attachment No. 1.

The Tourism Action Plan will review the previous Tourism Development Strategy, Tourism Investment Study, The Economic Development Strategy, Culture Plan and tourism development documentation from the Provincial and Federal Governments.

The plan will examine a wide range of issues. How the City of Toronto can improve relations with Canadian Tourism Commission and Department of Foreign Affairs offices in Canadian Embassies and Province of Ontario representatives in key tourism markets needs to be examined. As well, the tourism industry may benefit from the department’s International City Alliance initiative and thus needs to be formally integrated into the development plan. Projects such as the Toronto Zoo’s proposed initiative to explore developing a Panda exhibition and strategies to examine the development of tourism landmarks are consistent with creating new events and attractions designed to increase leisure visitation.

Support for Destination Marketing

There is fierce competition for the business and leisure traveller. Toronto is competing against cities from all over North America. Destinations are investing millions of dollars to attract visitors and Toronto’s loss of market share can be attributed to the decline in Tourism Toronto’s marketing budget while competing destinations have increased marketing activities.

Toronto’s lack of competitive funding for destination marketing is well known. The level of marketing support is low, even when compared to other Canadian cities. Toronto receives $8.3 million in marketing support while Vancouver receives $12 million and Montreal receives $16 million.

Toronto remains the only major North American City without some form of a tax, levy or user fee designed to generate a stable source of marketing funds for a destination marketing organization. Studies have proven that there is a direct correlation between increases in tourism marketing budgets and increases in visitation, revenue generation and tax revenue generation.

The Greater Toronto Hotel Association and Tourism Toronto are working together with City staff and other provincial tourism organizations to establish a levy on commercial accommodations that will increase levels of funding for tourism destination marketing. Additional funding for marketing will enhance global awareness of Toronto as a tourism destination. At the April 11, 2000 meeting, Toronto City Council recommended that Council request the Provincial Government to harmonize the sales tax in hotels from 5 percent to 8 percent and ensure that the 3 per cent difference is dedicated to Tourism Toronto.

Tourism Sector Performance Reporting

As per the terms of the service agreement with the City of Toronto, Tourism Toronto is required to appear before Council to present an annual update of operations of the Association and their review of the tourism environment in Toronto. Tourism Toronto was scheduled to appear at the June committee meeting but the presentation had to be postponed due to the labour disruption. Toronto City Council5 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1

The Economic Development Division, in previous years, made annual presentations to Council on the state of the Tourism industry and these reports are now the responsibility of the Tourism Division. The Tourism Division, upon completion of the Tourism Action Plan, will present a semi-annual update to the Economic Development and Parks Committee in order to keep Council fully informed about the status of the tourism sector of the economy.

Conclusions:

A healthy tourism sector is a very important component of a well-balanced economy. Clearly Toronto’s tourism sector is in need of assistance from all levels of government. Recovery and growth require planning and the first step on Toronto’s journey to a revitalized tourism economy is the development of a five-year strategic plan to guide development.

The creation of the Tourism Division reinforces the City of Toronto’s commitment to reversing the declining fortunes of the tourism sector. The Tourism Division will immediately work with the proposed Tourism Sector Advisory Committee to expedite a collaborative and results oriented tourism action plan for Toronto.

Contact Name:

Mr. Duncan H. Ross, Executive Director - Tourism, Telephone: 416-397-5395, Fax. 416-392-2271, [email protected].

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Attachment No. 1 Tourism Sector Advisory Committee Terms of Reference

Purpose:

The Tourism Sector Advisory Committee is a special advisory committee of the Economic Development and Parks Committee. The Task Force acts on Committee’s direction to examine how Toronto’s tourism industry can be re-vitalized and strengthened in order to reverse the loss of tourism market share and the loss of employment in this important sector of the economy that has occurred from 1997 to the present.

Term of Office:

The Tourism Sector Advisory Committee will be in existence until the activities specified are completed.

Activities:

(a) Review key tourism development documents including “Tourism Investment Study”, Cameron Hawkins and Associates, December 2001 and “Competitive Tourism Toronto City Council6 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1

Development Strategy for Metropolitan Toronto”, KPMG, 1992 and identify any gaps or changes in context that suggest different conclusions, directions or priorities for action.

(b) Identify current reality and perceptions of issues that need actions and new initiatives under development through consultation with senior staff in the Tourism Division, senior officials at Tourism Toronto, the Canadian Tourism Commission, the Ministry of Tourism and Recreation and selected sector representatives.

(c) Consult with travel and tourism industry representatives based in jurisdictions outside of Toronto to determine their perspectives of Toronto tourism development challenges and opportunities.

(d) Identify other jurisdictions that are successful and showing leadership in developing their tourism industries and summarize best practices relevant to the Toronto context.

(e) Participate and facilitate a one-day Toronto Tourism Industry Summit to seek ideas for action with key tourism industry representatives.

(f) Draft a five-year tourism development Action Plan for the period January 2003 to December 2008 and present same to the Economic Development and Parks Committee in early 2003.

These activities will be undertaken with staff from the Tourism Division and Tourism Specialist who will be responsible for external research, organizing stakeholder meetings and preparing reports.

Composition:

(a) Three Councillors who are interested in the tourism industry with preference being given to achieving a geographical balance;

(b) one representative or member from each of the following:

- Tourism Toronto; - Toronto Board of Trade; - Greater Toronto Hotel Association; - Ontario Restaurant Association: - Attractions Ontario; and - a member of a Faculty of Business, Economics, Hospitality/Tourism or Urban Studies of a University located in Toronto.

(c) a total maximum voting membership of nine;

(d) if a member has not attended the Task Force for three consecutive meetings without leave of the committee, they will be deemed to have resigned and another member will be sought; and Toronto City Council7 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1

(e) the following City Departments, Divisions, Agencies, Boards and Commissions or other City Organizations and Corporations be requested to appoint a representative to attend meetings and act as a non-voting advisory member with otherwise full participation privileges:

- Exhibition Place; - Toronto Transit Commission; - Toronto Zoo - EDCT, Culture/Parks and Recreation/Economic Development; - Works and Emergency Services, Transportation Services/Solid Waste; and - Corporate Services, Facilities and Real Estate

Meetings:

(a) Meetings to be regularly scheduled with a maximum of four full Task Force Meetings, including the Toronto Tourism Industry Summit;

(b) proceedings of the meetings to be recorded;

(c) co-chairs be elected from among the membership; one to be a Council Member, one a citizen member;

(d) the Committee be supported by staff of the Tourism Division;

(e) the Economic Development and Parks Committee be authorized to appoint their own citizen membership in accordance with the composition recommended by this Terms of Reference; and

(f) the presence of five members, including at least one co-chair, constitute a quorum.

Reporting Deadline:

The five-year Tourism Action Plan shall be presented to the Economic Development and Parks Committee no later that February 2003.

The Economic Development and Parks Committee also had before it during consideration of the foregoing matter the report (September 9, 2002) from the Commissioner of Economic Development, Culture and Tourism:

Purpose:

To advise City Council of key 2002 mid-season performance indicators and business issues specific to Toronto’s tourism sector.

Financial Implications and Impact Statement:

There are no financial implications resulting from the adoption of this report. Toronto City Council8 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1

Recommendations:

It is recommended that:

(1) the Economic Development, Culture and Tourism Department work with representatives from the tourism private sector to identify strategies to revitalize Toronto’s tourism economy; and

(2) the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Background:

The Economic Development Strategy, adopted by Council in August 2000, confirmed that the tourism cluster is one of the key contributors to the health and diversity of the City’s economy. The Strategy articulated the need to attract new tourism investment and tourists to Toronto by building on and promoting the City as an exciting, event filled year-round destination.

The Economic Development, Culture and Tourism Department established a Tourism Division in March 2002 to strengthen the City’s commitment to the tourism sector. The Tourism Division will strive to position Toronto as a dynamic and culturally vibrant year-round international destination and foster the development and rejuvenation of innovative attractions, facilities and globally significant events and festivals that will enhance the quality of life for citizens and visitors.

In recent years however, Toronto has experienced a gradual decline in tourism. In other North American regions tourism visitation has increased. Toronto’s visitation increased 4.5 percent from 15.5 million in 1997 to 16.15 million in 2000. Over the same period, Chicago increased 19.6 percent, Boston 16.2 percent and Montreal 14.7 percent. In 2001, Toronto’s total visitation declined marginally to just over 16 million visitors. The slippage in market share in Toronto is predicted to continue in 2002 and the decline goes beyond the overall industry impacts of September 11, 2001.

Key 2001 Sector Performance Statistics

(1) Toronto attracted 16 million visitors in 2001, the largest of any Canadian destination.

(2) Tourism expenditures total more than $3.4 billion creating an economic impact of $7.3 billion.

(3) There are over 34,000 hotel rooms in the City of Toronto.

(4) The average yearly hotel occupancy rate for Toronto is 66 percent.

(5) Toronto hosted 637 meetings and conferences attracting 1.9 million delegates and generating $750 million in direct revenue. Toronto City Council9 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1

(6) 87,000 jobs depend on tourism in Toronto.

(7) $1.5 billion in tax revenues are generated; $690 million Federal, $550 million Provincial and $270 million Municipal. (Municipal includes commercial assessments on accommodation and a portion of the assessment of restaurants, transportation facilities and retail as calculated by the Tourism Economic Assessment Model. The TEAM model, developed by the Canadian Tourism Research Institute and the Conference Board of Canada, is used by all levels of Government as the industry.)

Source: Tourism Toronto

While these statistics are on the surface impressive, many are decreasing and any increases are offset by losses of market share relative to the industry as a whole and to competitive destinations such as Chicago, Boston and Montreal.

Toronto has experienced a number of challenges that are unique compared to other jurisdictions in Canada and North America during 2002. These unique events will have had an impact on the City’s tourism economy. These include Canada’s largest strike of municipal workers at the beginning of the peak summer travel season, cancellation of the Celebrate Toronto Street Festival and an extended labour dispute involving many major downtown hotels. The cancellation of the Street Festival represented a direct loss of an estimated $8.7 million in tourism expenditure. The impact of the two labour disruptions is more difficult to assess. Media coverage of the strikes influences travellers perceptions of Toronto as a destination and thus could have impact on future intentions to travel. Playing host to World Youth Days, on the other hand, had a strong positive impact on tourism.

The purposes of this report is to bring to Council’s attention various preliminary 2002 results and interpretations which reinforce the fact that the tourism industry in Toronto is experiencing serious operating challenges.

Comments:

A. International Arrivals to Canada and Ontario

The arrival statistics to Ontario and Canada are key to assessing the health of the tourism sector in Toronto. It must be noted that 88 percent of all international arrivals come through Pearson International Airport. Toronto City Council10 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1

Entries 2002 Year to Date through June 30, 2002

Ontario Canada Percent Percent Total US -14.2 -11.0 US Auto Overnight +6.5 +6.3 US Non Auto Overnight -18.4 -14.0

Total Overseas -18.8 -13.9 UK -19.3 -13.9 Japan -44.6 -19.4 Germany -18.1 -19.2 France -15.8 -18.9

Figure No. 1 Source: OTMP/Statistics Canada

These results are troubling in that if Toronto is the most visited Canadian destination, these decreases in visitation will be reflected in accommodation occupancies and in some cases attraction attendance. These mid-season results are also disturbing, as there have been significant declines in arrivals from high yield markets pointing to speculation that there may be decreases in the amount of total revenues generated from tourism activity. Forecasters predicted growth from domestic markets but the domestic market traditionally has lower daily per person expenditures than US and overseas markets.

The number of arrivals at Pearson International Airport show the same trend. Eleven percent fewer people landed at Pearson from January to July in 2002 than in 2001. The decrease was sharpest for US travellers, down 15 percent from 2001. However, there also were decreases in international (5 percent) and, contrary to forecasts, domestic (12 percent) travellers.

It should be noted that there has been a decrease in Ontarians travelling to the United States. The number decreased 8.8 percent in 2002 versus the same period in 2001. This is consistent with forecasts that predicted Ontarians would be vacationing at home in 2002.

B. Toronto Hotel Occupancy

The first half of 2002 was disappointing for Toronto area hotels. Occupancy rates, average daily rate and revenue per available room all declined compared to the same period in 2001. Revenue per available room is the application of a hotel’s average occupancy to its average room rate and is a key industry performance measure as it is the true indicator of property’s ability to generate revenue. Toronto City Council11 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1

Room Operations, Year to Date June 2002 versus June 2001

Occupancy Rate Average Room Rate Revenue Per Available Percent Percent Room Percent

Ontario -5.3 -1.0 -6.3 GTA -7.4 -1.2 -8.5 Ottawa -7.5 -1.9 -9.2 Niagara Falls -0.3 -0.6 -0.9 Quebec -2.0 3.9 1.9 British Columbia -3.4 1.1 -2.3 Canada -2.7 0.6 -2.2

Figure No. 2 Source: OTMP/Panell Kerr Forster

Statistics provided by the Greater Toronto Hotel Association show declines in occupancy in downtown hotels in July 2002 versus July 2001. July is traditionally the month where Canadian and Toronto hotels achieve their highest levels of occupancy. Downtown Toronto has the highest concentration of restaurants, services, and tourist attractions and reduced numbers of tourists in downtown hotels means less tourist activity throughout the City.

Occupancy Rate July 2002 versus July 2001

July 2002 July 2001 Region Percent Percent

Toronto Downtown 75.6 77.5 Toronto West 68.6 67.2 Toronto Northeast 75.2 72.7

Figure No. 3 Source: Greater Toronto Hotel Association

Industry forecasts predict continued declines in Toronto’s hotel occupancy rates. Panell Kerr Forster, a consulting firm who produces detailed reports on the Canadian hotel sector, is predicting that Toronto’s average occupancy for 2002 will be 65 percent, down from an actual 66 percent in 2001. The 2003 forecast predicts a further decline to 63 percent. For comparative purposes, Montreal’s average occupancy is predicted to increase from the 2001 actual of 68 percent to 70 percent for 2002 and 71 percent for 2003.

Globally, according to PriceWaterhouseCoopers, occupancies are at the lowest levels in 75 years. Their revised forecast has postponed any recovery in the hotel sector until 2004. Business travel has not recovered as predicted and there is greater dependence on the leisure sector. Leisure consumers are reserving trips with shorter lead times, forcing hotels to discount room rates and consumers continue to postpone reservations because rates are low. Toronto City Council12 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1

C. Travel Information Requests

Travel information requests are another indicator forecasters use to predict how a tourist season in a particular destination is shaping up. The news is mixed for Ontario and, therefore, for Toronto. Calls to the Ontario Tourism 1-800-Ontario call centre decreased 25 percent in July 2002 versus July 2001. There has been a 15 percent decline in call centre volume in 2002 versus January to July 2001. In June 2002 there was 6.8 percent decrease in enquires and 11.2 percent decrease in visitors at all Ontario Travel Information Centres. Enquiries are down 25.2 percent and visitors are down 27.0 percent this year to date January to June 2002 versus the same period in 2001. On the other hand, user sessions on Ontario’s tourism information website have increased by 60 percent January to June 2002 versus the same period in 2001, somewhat mitigating the decrease in person-to-person enquiries.

Tourism Toronto reports a similar trend, with call centre enquiries 13 percent less January to July 2002 than in 2001. Enquiries at the visitor information desk at Toronto City Hall were 37 percent less in June and August 2002 than in 2001 (July data are not included since the centre was completely closed two weeks during the municipal workers’ strike).

D. Tourist Attraction and Special Event Performance

Consumer attendance at local and regional tourism attractions must be assessed carefully. Forecasters have predicted that Ontarians will be vacationing closer to home in 2002 and thus it is hypothesized that tourist attractions and events in the GTA may experience attendance gains resulting from people spending time in their own backyards. It is difficult to provide audience profiles for daily access attractions. As well, innovative programming, new exhibitions and attraction expansion have proven to motivate increases in attendance.

Preliminary data collected from Toronto’s major attractions confirm a high degree of variability in attendance trends. Some attractions report significant increases in visitors in 2002 whereas others report up to a 10 percent decrease.

The Royal Ontario Museum has hosted several successful exhibitions in 2002, including the Great Asian Dinosaurs and the Images of Salvation: Masterpieces of the Vatican. General admission attendance at the ROM is up 51 percent from January through July 2002 versus the same period in 2001. Many World Youth Day participants visited the ROM due to the Images of Salvation exhibition.

The CN Tower experienced a 10 percent decline in visitation from January through July 2002 versus the same period in 2001. This represents attendance to the observation levels only. The CN Tower, more than any other Toronto attraction, depends on visitation from US and overseas markets. It is an icon attraction and thus the decline in visitation is predictable given the overall declines in arrivals to Canada and Ontario.

Casa Loma, another icon attraction, reported a modest visitation increase of 1.4 percent from January through July 2002 versus the same period in 2001. Toronto City Council13 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1

The Toronto Zoo reported a 9 percent decrease in attendance January to August 2002 compared with the same period in 2001.

Ontario Place is reporting no significant changes in attendance from 2001 to 2002. Ontario Place traditionally draws over 80 percent of its visitors from within a 100-kilometre radius of the park. Ontario Place’s performance can be attributed to the demand for performances at the Molson Amphitheatre and the season’s exceptional summer weather, which increased family demand for the waterpark activities.

The Art Gallery of Ontario does not release its attendance figures. It notes that last summer’s Reubens exhibit drew large crowds and that this summer’s attendance is lower, as would be expected by the differences in programming. The Gauguin exhibit opening in October 2002 is also expected to be a major draw.

The Ontario Science Centre does not release its attendance figures. Anecdotally, it reports a slight increase in attendance in 2002 over 2001 in most of the months not impacted by its closure during the Ontario Public Service strike.

Canada’s Wonderland also does not release its attendance figures. One might anticipate that it also was the beneficiary of a long hot summer coupled with a major expansion of a new waterpark, Wonderland, a classic family theme park experience.

Most Toronto festivals and events report no significant changes in attendance from 2001 to 2002. This includes the Downtown Jazz Festival, The Molson Indy, Beaches International Jazz Festival, Caribana and Taste of the Danforth. Festivals traditionally post modest increases in visitation from year to year. The Celebrate Toronto Street Festival attracted over 1.1 million visitors in 2001 but the event had to be cancelled because of the Toronto municipal strike.

Conclusions:

The 2002 mid-season performance of Toronto’s tourism industry is not good. Globally the travel industry is still coping with impacts resulting from September 11, 2001. The declines in Toronto’s tourism sector performance had started four years before 2001 as Toronto’s market share was being eroded by competitors in Canada and in the United States. Five years later, the situation has intensified and it is predicted that there will be further job losses and losses in tax revenues to all levels of government unless immediate action is taken.

There are some developments looming on the horizon that will help. The Greater Toronto Hotel Association is continuing negotiations with the Provincial government to establish a hotel tax or visitor levy which would provide an increase in the amount of funds available for destination marketing. Studies have proven that there is a direct correlation between increases in tourism marketing budgets and increases in visitation, revenue generation and tax revenue generation. A hotel tax is desperately needed, as Toronto is the only major destination in North America without a stable source of tourism funding and Toronto’s marketing budget pales by comparison to cities such as Montreal. Toronto City Council14 Economic Development and Parks Committee October 29, 30 and 31, 2002 Report No. 9, Clause No. 1

The creation of the Tourism Division reinforces the City of Toronto’s commitment to reversing the declining fortunes of the tourism sector. The Department’s Tourism Division will immediately work with the representatives of the tourism industry to expedite a collaborative and results oriented tourism action plan for Toronto.

Contact Name:

Mr. Duncan H. Ross, Executive Director, Tourism Telephone 416-397-5395, Fax. 416-392-2271, [email protected].

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The following persons appeared before the Economic Development and Parks Committee in connection with the foregoing matter:

- Mr. Ralph Strachan, Chairman of the Board, Tourism Toronto; - Mr. Rod Seiling, President, Greater Toronto Hotel Association; and - Mr. Gino Giancola, Senior Vice-President Sales, Tourism Toronto.

The Chair, on behalf of the Committee, thanked Mr. Strachan, Mr. Seiling and Mr. Giancola for their presentation.