As all the world is aware, SARS has delivered a crippling blow to Toronto's economy, not unlike what New York City experienced with 9/11, or what Britain experienced with Mad Cow disease.

The immediate effect has been that over one-third of the 95,000 workers in the tourism industry in Toronto have been laid off, with many more working only part-time. Smith Travel Research has reported RevPAR results for downtown Toronto, compared to last year: for the week ending May 3, a decline of 71.5% for the week ending April 26, a decline of 56.3%; for the week ending April 19 (including Easter), a decline of 54.2%; for the week ending April 12, a decline of 40.0%; and for the week ending April 5, a decline of 15.4%. This translates into hotel occupancy rates in Toronto in the 30% to 40% range, instead of the seasonal 70% range. 

At least five major citywide conventions have been cancelled, with a loss of over 20,000 attendees, not to mention the vast amount of individual-hotel convention business that has been cancelled. Other SARS casualties include over 800 bus tours, music concerts, corporate travel, and school field trips; the list goes on and on. 

Downtown hotels have experienced last-minute group, leisure, and corporate cancellations valued in the hundreds of thousands of dollars. Given that tourism is among the top five sources of economic activity in all provinces, and is responsible for one fifth of the trillion-dollar Canadian economy, the repercussions are obviously quite serious. 

Ontario accounts for 40% of Canada's GDP, and Toronto 20% alone.

This could cost the Canadian economy up to $2.1-billion dollars in lost growth, according to Toronto Dominion Bank Financial Group. The Conference Board of Canada has estimated that the "outbreak will shave nearly $1-billion off of Toronto's real GDP in 2003. In a $200 billion economy, the impact represents half a percentage point on real GDP growth, so our outlook for the Toronto economy has been revised down from 3.8% to 3.3% this year. The SARS outbreak will have a heavy impact on the tourism, transportation, and retail trade sectors," said Mario Lefebvre of the Conference Board of Canada. The expected impact of SARS on tourism alone - excluding airport traffic - is estimated to be a loss of $350-million this year, a nine-percent decrease. Reduced accounts for an additional loss of $220 million, and non-tourism related retail sales will be reduced by $380-million.

Where does this leave the tourism market in Toronto? In need of massive financial aid! The three governments plan to spend $25-million on an economic-revival strategy for Toronto, mostly to promote the city to companies and potential tourists. At risk is the almost $5-billion that the 16.3-million visitors to Toronto spent in 2001, the latest year on which Statistics Canada has data. This advertising and marketing blitz will use television, radio, and newspaper ads to target not only U.S. border cities and states, but also "tourism influencers," organizations that put together tours and business conventions travel writers and business travellers.

The provincial government has also committed itself to an additional $118- million SARS Recovery package. A two-year tourism recovery plan is being undertaken to rebuild global confidence in Toronto and Ontario as world-class travel destinations. This package includes $66.8- million to rebuild global confidence in Toronto, $9-million for event marketing, and an additional $8-million for a special event to promote Toronto to the world.

Also included in the package are tax exemptions on Toronto accommodations and event admissions from May 1 to September 30, 2003.

Toronto has been trying to woo back tourists in a big way. The airlines have jumped on board to help promote Toronto, offering greatly reduced fares from Canadian and U.S. cities. Jetsgo is offering 1,000 free tickets to Toronto each weekend until Victoria Day. Many hotel chains are offering never-before-seen promotions on hotel rooms, food and
beverage, and theatre tickets. Gas stations have even been slashing their prices to encourage tourism.

Rod Seiling, president of the Greater Toronto Hotel Association, believes it will take Toronto two years to get back on track. Despite SARS and other issues, such as a weaker-than-expected U.S. economy, and the fallout from the war with Iraq, the hotel industry will make it through, and hopefully come out for the better. Maybe the long-awaited legislated hotel roomnight tax, as exists in many other Canadian cities, will need to be more seriously considered if Toronto is to reverse this damage and be able to financially sustain a permanent, much-needed international marketing program.