Raptors playoff run an economic slam dunk for Toronto businesses — but will it last?
Bars, restaurants and swag sellers raked in millions, but most spending has already happened
Players and fans aren't the only ones celebrating the Toronto Raptors' first NBA championship in franchise history — local businesses are cashing in.
Payment processing firm Moneris looked at data from last year's finals between Golden State and the Cleveland Cavaliers, and found Canadians were far more inclined to take in the game at a local sports bar this year, since there was a Canadian team involved this time around.
Across the country, Moneris has calculated spending at bars and restaurants was 375 per cent higher during Game 5 than it was the same day a year ago, when the Raptors weren't playing. No surprise, the impact was even greater in Toronto, where spending rose by a whopping 865 per cent compared to the same day in 2018.
Those numbers come as no surprise to Jeff Wrenshall, the general manager at a Jack Astor's sports bar in downtown Toronto.
"It's good for our business — a lot of people that may not have come down and checked us out before have definitely come in," he said. "Each round they win, we start getting busier earlier."
Not all of those jubilant fans are locals, either. New Zealander Ross Bradding came into Toronto with his son just to watch the local team's championship run. "We just jumped on a plane last week and came," he told CBC on Friday.
Bradding was in line to buy merchandise to commemorate the Raptors win on Friday morning, but he'll soon be back home — with a very positive memory of the city, and a desire to come back soon. "It's a wonderful city and we've had a great time," he said. "Everyone is so friendly — it's been really cool, very cool."
Toronto's former city planner Jennifer Keesmaat said experiences like Bradding's — and countless others like him — are priceless for the city's status and economy over the long run.
"There's an energy we can build on," she said.
The one-time mayoral candidate said you can't put a price on the value this playoff run has added to Toronto's prestige elsewhere, as the team's young and diverse fan base have been ambassadors for the city.
"Think about why cities pursue the Olympic games — it's because they want to shine the light on their city," Keesmaat said. "They want to show what they're capable of, they want to draw attention to the character and the quality of their city. Well, we just did that through the NBA championships. We just did that through our Raptors."
There may indeed be nebulous benefits for the city's brand and attractiveness as a destination, but in terms of cold hard economics, the benefits of this Raptors run could be like the hang time on a Kawhi Leonard jump shot: fleeting.
"In the long term, there's very little economic impact," said Marvin Ryder, a professor of marketing at McMaster University in Hamilton, Ont.
Local bars, restaurants and sellers of Raptors-related merchandise likely enjoyed a slice of tens of millions of dollars in spending over the past several weeks — but the vast majority of that has already happened, Ryder notes. "There isn't going to be some big boom in the months ahead."
'It's hard to foresee a big bump'
It can also be difficult to decipher how much of that spending is really new or whether it's just consumption that would have happened in one part of the economy being reallocated to another.
If all that money being spent at sports bars for the past month would otherwise have been spent elsewhere, "it's hard to know how much of this is net new activity," Ryder said.
He adds that bars and restaurants this time of year normally see higher spending because of Canadian teams in the NHL playoffs, but there were none still playing into June, this year or last.
Which is why he doesn't think whatever spending businesses enjoyed will have legs to have a long-term impact. "It's news for a few days and then it just disappears," he said. "[It's] very ephemeral."
"It's not the windfall that I think everyone hoped it would be."
Economist Brett House of Scotiabank agrees with that assessment. "The Raptors' NBA playoff run, while extraordinary in many respects, is unlikely to have any measurable economic impact on Toronto beyond a possible brief uptick in sales in the local hospitality industry," he said.
"Beyond a few more people in Jurassic Park during games, who may spend on food and drink at local establishments, or a few more people buying jerseys, it's hard to foresee a big bump in activity even for businesses around [the arena]."