Toronto collects record numbers of visitors

Over 25 years on from Toronto’s amalgamation, the megacity and red-hot commercial capital stands tall as a shining beacon of prosperity. This year, it will host the Pan Am Games, and last year it saw the largest influx of visitors on record. The city’s tourism credentials are heating up – and so too is its corporate appeal: “The world is continuing to take notice of Toronto’s emergence as an exciting leisure travel and meetings hot spot”, said David Whitaker, President and CEO of Tourism Toronto, in a press release earlier this year. “This is a sophisticated city with a growing reputation and people want to come see for themselves what all the buzz is about.”

Growing not just outwards but upwards, towering office blocks and skyscrapers have pierced the skyline and pushed prices ever further into the stratosphere. Cranes dot the cityscape and the sound of construction works echo on every major street, as wealthy residents – both corporate and individual – keep the city’s ongoing improvements ticking along.

Last year, 18 brand new buildings, including three office towers, were approved over only two days of city council meetings. The non-stop procession of construction works has more than once been referred to as the ‘Manhattanisation’ of Canada’s largest city.

Reaching skywards
In a period where housing throughout much of Canada is becoming more affordable, prices in Toronto are skyrocketing, brought on by the city’s breakneck rate of expansion and growing business appeal. According to a recent report penned by RBC Economics, this situation has only come about in the last four years or so, as high and rising prices continue to stretch those on a typical household income – unlike in Vancouver, where affordability has long been an issue.

One Bloor East, Ïce Condominiums, Harbour Plaza Residences and Ten York: each is only one in a long and growing list of housing projects, with the first on course for completion next year and set to rise 257 metres, containing 73 floors of condominiums perched above two floors of retail space. But even this mammoth construction could soon be eclipsed by the newly proposed and neighbouring The One at One Bloor West, which, when completed, could reach a vertigo-inducing 318 metres. In fact, the development industry has taken hold so completely that competing firms are queuing up for the equipment, and commuters can often be seen scrapping for space in congested and construction-hit roads.

Behind the building works and ever-audible sounds of drilling lies a city in the midst of a major transformation. Toronto has fast made a name for itself as a first class destination for both businesses and individuals, and while much of the focus has fallen on the growing pains recently heaped upon it, the city’s capacity to absorb these stresses and emerge out the other side all the better for it is a rather more deserving case for attention.

Tourism explosion
Owing both to a weaker currency and a gathering US recovery, for the first time in history Toronto is on course to outperform its Canadian peers. According to the Conference Board of Canada’s Metropolitan Outlook: Spring 2015 report, the manufacturing, transportation, warehousing and retail trade services have each made a major contribution, though perhaps the most noticeable beneficiary is travel and tourism.

Findings from Tourism Toronto confirmed that last year was a record-breaking period for the city, with the business and financial heartland of Canada having welcomed 14.3 million overnight visitors throughout the 12-month period. Buoyed by a fourth consecutive year of growth in visitors from across the border and the highest number of overseas tourists on record, Toronto currently sits in first place in terms of hotel occupancy rates and the number of hotel room nights sold nationwide.

Overall, some 9.45 million hotel room nights were sold through all of last year, with an average occupancy rate of 71.4 percent; the highest of any city in Canada. “In just two years we have generated 444,000 more hotel room night stays toward our five-year goal of one million”, according to Terry Mundell, President and CEO of the Greater Toronto Hotel Association. “More room nights are not only good for hotels and their employees, but equate to more visitor spending in our community.”

Focusing on high-value visitors from major US cities, as well as those from key overseas markets including the UK, Germany, China, Japan and Brazil, the sector’s marketing strategy is to capitalise on free-spending international tourists, though it also considers holidaymakers closer to home. Representing an increase of 3.7 percent on the year previous, 2.3 million American tourists enjoyed at least a one night’s stay in Toronto in 2014, with 64 percent having travelled by air. Including day trips, 25 million people in total visited the city in 2014. However, more important still was the emergence of China as the city’s leading overseas market: with over 230,000 visitors landing on the city’s soil, a number that was up 27 percent on the previous year, China knocked the UK and its 217,000 tourists down to second place.

Far from being significant in terms of numbers alone, the economic contribution of tourism is well worthy of note: the combined spend of overnight visitors last year was $4.5bn (not including airfares) and Canadians, who made up the majority of inbound visitors, contributed a healthy dose of $2.44bn. “We’re thrilled with Toronto’s ongoing reputation as a top international destination”, said Michael Coteau, Minister of Tourism, Culture and Sport. “And we’re proud that our government, working together with Tourism Toronto and other partners, continues to successfully attract tourists, create jobs and grow our economy here in Ontario. Looking ahead, we expect an even bigger economic boost this year as we host the TO2015 Pan/Parapan Am Games.

“The outlook is not without its challenges, but there has never been a more exciting time to visit Toronto – from new attractions, the new Queens Quay promenade, UP Express, new and renovated hotels and a summer-long line-up of festivals, events and special promotions.”

Corporate appeal
Where Toronto’s ongoing economic development and thriving tourism scene really interact is within the corporate travel segment, which has posted impressive gains recently as Toronto has become one of the most popular destinations in the region. Looking at the city’s convention sector and at the many events that it has hosted in recent months, what’s clear is that Toronto is fast making a name for itself as a corporate travel hub.

Aside from the city itself racking up record numbers of visitors last year, its convention sector also reached new and unseen heights: throughout 2014, Tourism Toronto and its partners confirmed 665 future meetings and conventions, including 13 major events at the Metro Convention Centre, which together should bring 463,400 attendees and 640,345 hotel room nights to the already buzzing city.

In 2014 the city played host to a series of key events and congresses, including the Million Dollar Round Table, host to 7,000 attendees; the Lions Club International, to 15,000 attendees; the International Astronautical Federation, 2,500; the American Association for Thoraic Surgery, 4,500; and Amway India, which brought in a further 4,000. Additionally, 2015 has already seen Toronto welcoming the meeting of the American Psychiatric Association, which earlier this year brought in 20,000 psychiatrists to the city. A second meeting in August brought a further 10,000.

These visits, while often fleeting, have far-reaching implications for the city at large, with many subsequently choosing to extend their stay or occasionally to bring family and friends with them. Most importantly, a great many of these individuals visiting on business choose to return to the city for leisure purposes and to explore the region further. Nonetheless, the city has long been home to an abundance of thriving businesses, which have each contributed to the city’s continued prosperity over recent years.

Bringing in big names
Coca-Cola, KPMG, Scotiabank and Volkswagen all boast a sizeable presence in Toronto, alongside a host of other high-profile names. A web of interconnected businesses, a deep talent pool and a supportive municipal government together promise a great deal for companies that are seeking an accommodating environment, with the depth and variety of innovation on show having done a great deal to the underline the extent of the city’s leadership. One KPMG report showed that Toronto was the most tax-competitive major city in Canada last year, behind Vancouver and neighbouring Montreal in second and third. Another account, by the Economist Intelligence Unit, puts the city eighth out of 50 countries in its Safe Cities Index 2015, with digital and health security, infrastructure and personal safety all scoring highly.

The Toronto Stock Exchange, meanwhile, is the largest exchange in Canada and the third largest – in terms of traded value – on the continent. Some of the biggest names in the country’s banking community have now erected their headquarters in Canada’s biggest city, and the head office of a great many financial firms are located on much the same grounds. Home to the headquarters of five leading Canadian banks (who together control 80 percent of the market) and 80 percent of the mutual fund industry, Toronto is nothing short of a playground for financial services.

For seven years running now, the World Economic Forum has ranked Canada’s banking system as the soundest in the world, and – as the heartland of the nation’s rich financial community – Toronto has done much to spearhead the latest developments: here is a financial services sector that employs 251,000 people, meaning that its size in this regard is third only to New York and Chicago.

As a hub for culture, sports and entertainment, Toronto’s deserved status as an economic powerhouse has attracted both businesses and individuals in their droves. Home to over 40 percent of the nation’s business headquarters and 19 percent of national GDP, studies conducted by Moody’s have forecasted that by 2017 the city will surpass London in terms of jobs in financial services, with an additional 100,000 added in the period through 2012 to 2020.

A growing city
It’s not only major names that benefit from Toronto’s better parts, but SMEs and start-ups also, which have in turn contributed a great deal to the city’s growth story. Property tax rebates, charge and fee exceptions and energy savings incentives all play a part in the attraction, though it’s in the city’s web of industries and deep pool of talent that the major opportunities really lie.

Among the city’s most notable advantages is its commitment to Business Improvement Areas (BIA). There are currently 81 such projects, each designed to facilitate business development and raise the city’s profile as Canada’s cultural and economic capital. First introduced in 1970, the public-private business partnership model has since been emulated around the globe. Those in the applicable catchment area now employ upwards of 400,000 people and generate $10 for every $1 invested.

Elsewhere, Shopify, Indiegogo, Hurrier, Varagesale and others have all done their bit to jumpstart a thriving start-up scene. A highly educated workforce, together with an accommodating government, have done a great deal to bring novel ideas to market: innovation is rife, and so too are networking opportunities in a city bursting with ingenuity and invention, so it’s little surprise that the city is fast becoming a major corporate travel destination.

Toronto’s budding business network and entrepreneurial flair have done much to boost corporate travel, though travellers have also benefitted businesses in return. Speaking at a Global Business Travel Association conference earlier this year, the firm’s Vice President of Research, Joe Bates, stated that business travel spending in 2013 contributed $23.5bn to Canada’s GDP and played a considerable part in business growth. “Business travel drives business growth, and these numbers show that business travel matters when it comes to positively impacting the economy”, he said. “Nothing can replace face-to-face interactions when it comes to getting business done, so it comes as no surprise the huge impact the business travel industry has on the nation’s economy.”

Questions still remain about whether or not Toronto’s rocketing rental prices and the headaches caused by its ongoing developments could exclude those who are living on average or below average wages. However, what’s certain is that the present climate has done a great deal to boost both business and business tourism in the city.