NBA—It’s all about the ROI for the hospitality industry

In a letter to CLN, ORHMA president Tony Elenis speaks out on how the government payment issued to Maple Leaf Sports and Entertainment affects the hospitalit

There has been mass media coverage recently on a $500,000 government payment issued to Maple Leaf Sports and Entertainment (MLSE) to help secure the 2016 NBA all-star game for Toronto. Of course, the critics have a field day bashing the need for this payment to a successful and large stable company, however, they do not understand the challenges the hospitality has been facing for the last decade.
In speaking of Ontario's hospitality industry we highly applaud this initiative. Critics have failed to see that the hospitality and tourism industry in this province has lost over 20 million international visitors in the last decade while Canada as a tourist destination has slipped from a place in the top ten a decade ago to 16th place in 2012. Its market tourism share continues to slide by 1.5 per cent. The accommodation sector has dropped to a 50 per cent margin in the last ten years and restaurants operate at a less than 3 per cent pre-tax profit margin.
In today's tough economic environment, governments have a responsibility to support business growth, which in return supports the overall economy growth of our province. Globally, tourism is performing as the fastest growth sector compared to most others at a rate of 4%. This is largely due to incentives and partnerships with the government and the private sector. This is a formula for success that pays off with huge economic rewards and job growth.
The ROI from the NBA all-star game is estimated at close to $100 million dollars and is a smart investment in any ones calculations. It's irrelevant whether it's in Toronto, Thunder Bay or London; this is exactly the smart decisions governments should continue to make. We all should be encouraging this. Governments should work with and incentivize private companies to generate a return that benefits all type of businesses including retail, taxis, hotels and restaurants. Companies such as MLSE that have the infrastructure and financial backbone to grow business can bring in the higher ROIs and should be encouraged even more as their success supports success for all type of small business. Here, size does matter.
In these ever-changing times the hospitality and tourism industry has more potential to open more service destinations, grow employment and support Ontario's economic growth. The private sector can do it but not without government support. Let's not forget this significant NBA event, while hosted in the City of Toronto, will be viewed by millions of people around the world putting Ontario on the tourism map.
Yours Truly,
Tony A. Elenis President  & CEO
Ontario Restaurant Hotel & Motel Association (ORHMA)