What should be the Olympic dream season at Whistler, B.C., is turning into a bust for hoteliers in the tony ski village.

Despite a record snowfall in November that opened the slopes two weeks early, hotels and resorts in the coastal mountain range are struggling to fill their rooms. And it’s not just the economy that is getting them down.

Roger Soane, general manager at the Fairmont Chateau Whistler, has a simple explanation: “Olympic aversion.” International and corporate travellers are shying away from the ski resort this year out of fears their plans will be overrun by the 2010 Games.

Remarkably, the Fairmont Chateau Whistler still has rooms available during the 17 days of the Games — despite the Vancouver Organizing Committee taking 80% of the hotel’s inventory for its delegates for the period.

Mr. Soane said Olympic sponsors and other corporations are scaling back their glitzy galas and invitations for the games this year. GM Canada, for instance, which spent millions of dollars flying clients, dealers and executives to the Calgary Games in 1988, will be hosting a much more modest affair in Vancouver. The automaker has none of the expense-account schmoozefests it has hosted in the past. And it’s not alone.

“It’s been a bit of a double whammy with the economic downturn and the Olympics,” Mr. Soane said. “It’s going to make for an interesting year.”

This doesn’t mean the Olympics will be an economic failure. An estimated 250,000 people are expected to attend the Games. But expectations have certainly been pared down since the initial bid. Even VANOC narrowed the window it asked its hotel partners to hold rooms for delegates.

As one Canadian airline executive put it, the Games are great for raising brand awareness, but bad for immediate returns. The airlines will see the bulk of their Olympics business on just two days — the first and the last days of the Games. The Vancouver airport is bracing primarily for March 1 — it expects 39,000 departures from the airport on the last day of the Olympics. This contrasts with events like Expo ’86 in Vancouver, which brought visitors for six months.

Still, the tourism industry — and British Columbia business in general — remains upbeat about the legacy of the Games, the so-called “halo effect” of the Olympics.

Research shows that tourism to the host city and country of mega-sporting events like the Olympics or World Cup, spikes dramatically in the years following the event — if executed well. While tourism may drop in the first year post-games, it increases substantially over the subsequent five years. Olympic officials expect three billion television viewers worldwide will watch the Vancouver Olympics, with an additional 1.5 billion following online.

A recent study by Vancouver’s InterVISTAS consultancy group, on behalf of the B.C. and Canadian governments, suggests the 2010 Olympics could bring between 1.1 million and 2.7 million tourists to the province between 2008 and 2015. Those travellers, in addition to the business deals signed at the games, are expected to add between $2-billion to $4.2-billion to the province’s economy over the same period.

Add in the economic impact of Vancouver’s new convention centre, and the amount generated by the Games is expected to balloon to between $6.1-billion and $10.7-billion.

That impact is already being felt. The new convention centre, constructed in the lead up to the Games and to be used as the broadcast centre during the event, has already increased advance hotel reservations in Vancouver by 53% (excluding the Games) according to recent figures from PricewaterhouseCooper. Add in the two months of the Olympics, and the increase is about 106%.

“That’s what it’s all about,” said James Chase, chief executive, B.C. Hotel Association. “It’s the legacy.”

The B.C. government is in peak form to capitalize on the estimated 16,000 business leaders, government officials and other delegates from 80 different countries that will roll through Vancouver for the Games.

“Our goal is to capture the international attention that’s going to be on our city and drive economic opportunities that will result from that,” said Iain Black, B.C.’s minister of small business, technology and economic development. “We’re going to play the role of concierge more than anything else.”

The provincial government is hosting nearly 80 different events, including galas, peer introductions and political meetings, over the course of the Games at five different venues to facilitate trade with B.C. and Canada.

“The Olympic Games attract the titans of industry,” Mr. Black said. “It’s an opportunity for us to get a very small slice of their time and to make a very positive impression on them on what British Columbia is about.”

B.C. Tourism is focusing its efforts on the estimated 10,000 international media that will descend on the province, while Western Economic Diversification Canada has been working with all four provinces in the West to ensure that the influx of tourism is not limited to B.C. To that end, it has contributed $4.3-million to help market the West in the build up to the games.

Raymond Chan, B.C. Tourism vice-president, said more than 67,000 stories on the province and Canada have been generated as a result of the Olympics, in markets as far away as India, Mexico and China. He estimated that translates into approximately $153-million in equivalent advertising spending.

The bet in B.C., as with most Olympic hosts, is that the halo effect of the Games will help cover the cost of much of the infrastructure built for the event. But there is a big risk to that bet, said Harry Arne Solberg, a professor at Norway’s Trondheim Business School, who studies the impact of such large-scale sporting events.

While there is certainly evidence to support that such events can attract substantial tourism, host cities and nations have a propensity for overestimating the long-term benefits and underestimating the costs involved in hosting them, the professor said.

In fact, since the 1984 Los Angeles Olympics, there has yet to be a Games able to show a net profit, he noted.

“The economic benefits for the region and for the host nation tend to be exaggerated. It doesn’t meet with the expectations of the consultancy reports of those who want the sporting event,” he said in an interview.

Moreover, there is no guarantee that Vancouver and B.C. will ever see a legacy from the games — particularly if violent protests or other unforeseen events occur, said Harry Hiller, a professor at the University of Calgary, who also tracks the impact of the Olympics.

“There’s only a halo effect if everything is wonderful, and that’s the issue,” he said. “There are people in Vancouver who don’t want to make it so wonderful and want to use it as an opportunity to protest. You never know. Look what happened in Munich. People were killed. The media still hasn’t forgiven Atlanta for the fact that its transportation network was screwed up.”

The tab is running and the long-term payoff of the Games have much to cover. Already the construction of the Olympic venues is about $110-million over the original budget. The security budget alone has spiralled to $900-million from the original estimate of $175-million.

The B.C. auditor-general has concluded that the province’s share of the full cost of the Olympics is “considerably higher” than the $600-million figure often quoted, and B.C.’s original estimate of $470-million during the bidding process.

The total cost estimated is closer $2.5-billion, the auditor-general said in a 2006 report. That includes the cost of Sea-to-Sky highway and part of the Canada Line, a tunnel link from the airport to downtown.

Gordon Campbell, B.C. Premier, recently told the National Post he expects the cost of hosting the Olympics to be about $1.5-billion, and contends that much of the infrastructure spending would have occurred anyway.

“If we had lost the Olympics in July 2003, the convention centre would still be built today. If we had lost the Olympics in July 2003, the Sea-to-Sky highway would still have been done. The Canada Line would have still been done,” he said.

The Games have contributed about $788-million to B.C.’s gross domestic product between 2003 and 2008, and about 18,000 jobs per year stemming primarily from construction, according to PricewaterhouseCoopers’ estimates.

But the PwC studies also suggested that province could expect $5-million from tourism leading up to the Games — and that hasn’t materialized.

Overall, B.C. is expecting the Games to contribute 1% to the province’s GDP next year, Mr. Campbell said.

“The one thing I’m worried about is not taking full advantage of the opportunity,” he said. “We spend millions of dollars trying to get out in the world. Now [people] are coming to us. Let’s maximize the benefits. It’s an enormous opportunity for promotion, for building relationships.”

Douglas Porter, BMO deputy chief economist, said it is nearly impossible to do an accurate cost/benefit analysis of the Games before they occur. However, he said he expects B.C.’s GDP to grow faster than the broader Canada economy next year — 3% in B.C. vs. 2.6% for Canada.

And the Games are only part of the reason for that forecast. He explained that since B.C.’s economy was harder hit by the recession, it will see a sharper rebound.

“It’s fair to say that the Olympics will give the B.C. economy a small, short-term bump,” Mr. Porter said. “A more interesting question is whether there will be this so-called halo effect, and we won’t really know that for years.”

scdeveau@nationalpost.com