Hype outdoes economic reality of the Games

The numbers were $70- to-$100-million. The question that prompted them: how much profit — in the stark dollar and cent numbers that anchor…

The numbers were $70- to-$100-million.

The question that prompted them: how much profit — in the stark dollar and cent numbers that anchor balance sheets — will the Canada Winter Games bring to Whitehorse?

“Judging from previous games, we’ve seen economic impact in the $70- to $100-million range,” said Canada Games host society president Piers McDonald in September.

Add up the price for the venues built for the two-week event and one quickly arrives at a number close to McDonald’s prediction.

The Canada Games Centre cost more than $40 million, paid for by Ottawa, Whitehorse and the Yukon government.

Add about $34 million for the athletes’ village and around $1.8 million for upgrades at Mt. Sima and you’re already above $75 million.

Thousands of litres of gasoline and diesel were doubtlessly sold to fuel vehicles carrying athletes, coaches, reporters and spectators to and from venues during the Games.

Hundreds of hotel rooms and dozens of airplanes were full.

And Whitehorse played a starring role on television broadcasts courtesy of CBC, TSN and APTN.

But many Whitehorse retailers expected a big spike in business during the Games that simply didn’t arrive.

The lack of business has been hard for some: many businesses hired extra staff, bought increased inventory and extended their hours.

So what happened?

“You get caught up in the hype,” said Michael King, owner of Bean North Coffee Roasting Co. located outside of Whitehorse.

Bean North exports coffee and supplies local cafes.

Expecting increased business from local clients, the company worked hard to clear Outside coffee orders before the Games.

“We assumed, like a lot of other businesses in town, that we were going to be a lot busier,” said King. “So we set time aside to provide local cafes and stuff like that. And it just didn’t turn out to be that way.

“In the end we were probably the slowest we’ve been in while,” he said. “Again, that’s because of the way we organized it — to solely supply our locals during that two weeks — it was just another way to understand how much you depend in the food sector on your local clientele.

“It’s going to cost us a little bit of money, but in the end some of the money we would have ended up spending anyway, we just wouldn’t have spent it when we did.”

Cindy Beasley, owner of the Java Connection café in downtown Whitehorse, admits she got caught up in the hype, too.

Instead of increased traffic at the coffee shop, the Games created an unanticipated research project on the clientele that supports the Java Connection.

Beasley and her staff discovered government workers account for 75 per cent of the coffee, muffins and sandwiches they sell.

“I didn’t know it until these last two weeks,” said Beasley in her office on Wednesday. “We lost our regular customers and didn’t get the Games customers.”

Beasley was expecting her staff would be “run off their feet,” and hired four students and bought extra food supplies to help them, she said.

Three of the students were let go after the first week of the Games, and much of the extra food wasn’t sold and ended up being donated to the Salvation Army.

Beasley donates unsold food to the Salvation Army every day, but estimated she doubled her donation during the Games.

“I guess, just maybe through the radio and people talking, we were all led to believe it was going to be busier,” said Beasley, who underlined she is supportive of what the Games did for the community.

From a business point of view, however: “I’m glad they were only two weeks long,” she said.

Many expected local businesses to suffer and the well-known national chain stores to thrive.

But Orval Smith, store manager at the Wal-Mart in Whitehorse, debunks that myth a bit.

Smith is hoping for a business afterglow following the Games after a quiet two weeks in the store.

“Business was slow,” said Smith on Wednesday. “Realistically, people came to watch the Games; they didn’t come to shop at Wal-Mart. So, the amount of traffic that we saw in the store was lower than usual.”

Wal-Mart tried to have extra staff working at the store during the first few days of the Games but struggled, as many were volunteering for the Games.

Wal-Mart didn’t need them anyway.

“From talking to other businesses around town, we were told that was pretty much the norm,” said Smith.

Wal-Mart did have a small boom, however, selling pillows to athletes who discovered there were none on their beds in the athletes’ village, and boots to kids with cold feet.

Smith likes to look at the bigger picture rather than focus on the lack of business during the Games.

“I don’t think we were disappointed in it at all,” he said. “It’s good for the community, one, and two, for the people that did come up, there’s got to be a percentage that are going to come back as tourists. So that’s residual business that you’re going to get from it.”

Aroma Borealis owner Bev Gray is also hoping Games visitors remember her products.

The small, unique store didn’t increase staff in anticipation of Outside customers, but did extended business hours only to find a lack of traffic.

 “We just realized pretty soon into it that that’s not going to happen,” said Gray of increased business during the extended hours. “There was so much culturally going on.

“I think the weather had a lot to do with it,” she added, pointing to the minus 30 Celsius temperatures that descended on Whitehorse during the first week of the Games.

“And the fact is, people are here to do sport; they’re not here to shop.”

Many people took the store’s catalogue with them and Gray is expecting residual business from her webstore as a result.

“We had a great time meeting people from all over the place,” said Gray.

Businesses that did see the expected spike in business were hotels and airlines.

“We certainly did far better than we would at that same time any other year,” said Heather McIntyre, general manager of the Westmark Hotel in Whitehorse.

“We never would have done that kind of business in February or March had it not been for the Games,” she said.

The Westmark sold three times as much beer and other beverages than it usually does in the same time period. Food sales doubled.

The hotel, however, was not bursting at the seams and squeezing wannabe-guests into broom closets as some may have envisioned.

It was running at about an 85 per cent occupancy rate, said McIntyre.

During the 20 days book-ended by the opening and closing of the Games, Air North was using its afterburners.

The airline flew 52 flights. The weekly average number of flights for Air North is about nine.

“It was a very busy period,” said president Joe Sparling on Thursday. “We probably saw a 50-per-cent increase in business.”

But not all of that translates into profit: the company had to scramble to deal with incredible spikes of demand during the beginning, middle and end of the Games, he said.

 “Because it was such a concentrated bit of activity, there was a lot of overtime work,” said Sparling. “It definitely was a boost to February and March, we’re definitely very happy, but it certainly all wasn’t profit by a long shot. A lot of expenses went into it for sure.”

Back to the hype, then: Who’s to blame for potentially overselling the economic boost of the Games?

“Everybody’s asking that question — ‘Who said this?’ ‘Who did this?’ — and in the end I don’t know who said it and did it,” said King.

“All the media was hyping the Games and I think that’s needed for the community to get excited, so we got caught up in that hype, too,” said King. “Hindsight is 20/20. When you look back and think about it, this all makes sense.”