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Tough economy and 'Olympic aversion' create business casualties

Catering to consumer is key

It has been a strange couple of years for Whistler. A dozen or so months after the global economy tanked, the most famous of the Sea to Sky communities experienced the multifaceted effects of  "Olympic aversion" - a guaranteed, oft-proven tourism dip that haunts cities that host Winter or Summer Games. This combination of factors has been a challenge for many small independent businesses that rely on the abundance of peak season tourists with mega-spending power to get them through the slower shoulder seasons.

Britt Germann recently closed the doors of Path Gallery in Tyndall Stone Lodge on the Village Stroll after nearly six years of business. The 1,200 square foot gallery space now stands empty, save for a few wooden Christmas trees lined up in the window. Most of the commercial real estate on either side of it is also vacant, but Germann is reluctant to blame her former landlord for the rash of closures in the building. That area of the Village Stroll, she says, creates a psychological barrier for pedestrian traffic. A line of planters, construction at Celebration Plaza, and a slightly out-of-the-way location condensed the problem but she credits a depleted economy and lack of vision in the Municipality and Chamber of Commerce for most of the damage.

"I think the recent economic strife globally has affected the buying power of the guest in Whistler and it has also affected the type of guest we get in Whistler. The charter flights are down from Europe and it's now a regional visitor looking for a good time, and that isn't exactly my clientele," she said. "I do agree that there are ways that one needs to modify one's business to adapt but for the long term I don't feel that the organizing bodies - Tourism Whistler, RMOW or the Chamber of Commerce - really are being very effective with respect to vision, with respect to planning, with respect to understanding what a guest needs to become engaged with the whole experience."

Anticipating the needs of this new breed of guest is something that the Whistler Chamber of Commerce (WCC), Tourism Whistler (TW) and Resort Municipality of Whistler are vocally striving to stay on top of, but the town's economic authorities say it is ultimately the responsibility of the business community to take on new and innovative ways to get people into their shops.

"There is a lot of work and a lot of thought going into how to get people to flow better around the village, that's an important consideration," said Scott Carrell, chair of the Whistler Chamber of Commerce board of directors. "What it really comes down to is people coming up with things that people want - viable ideas - then that will bring traffic. It's really about the intellectual capital of the business in the neighbourhood and it's not about what the municipality is going to do or what I'm going to do or what the chamber is going to do - it's about what collective neighbourhoods and collective people with visions are going to do."

The Farmer's Market at Blackcomb and the annual Turkey Sale is exactly the kind of thing Carrell is talking about - events that started small, focus on consumer needs and draw a lot of interest during Whistler's slower seasons. Last weekend's Turkey Sale saw more than 20,000 square feet of shopping space packed with shoppers. Stores, hotels, restaurants and services that weren't directly involved with the event capitalized on the attention it garnered, offering their own specials and discounts to lure the wandering shopper.

A Whistler Blackcomb spokesperson said the number of guests that attended this year's Turkey Sale exceeded last year's. Trevor Flint, a manager at Evolution Whistler, said his store's numbers were up and exceeded 2009 sales.

"It was really, really good. It was crazy busy," he said. "This was definitely the biggest that I've seen. Saturday, Sunday, Monday we probably did $25,000 in retail."

Evolution had 253 individual sales during the Turkey Sale. On a normal autumn weekend they average 120.

Encouraging visitors to explore the Village Stroll hasn't ever been difficult - the wide boulevard beckons with a sparkly, come-hither cobblestone charm and that alone helps keep businesses in that neck of the woods running. But getting guests to shop in outlying areas has its own challenges - as is apparent in the number of for rent signs hung in windows in spaces off Village Stroll.

"The further you get from the mountain the more likely you are to see vacancies," said former Whistler mayor and Whistler Real Estate realtor Drew Meredith. "In other areas - Function Junction, Nesters - they are experiencing higher vacancies than certainly the village. Basically the number one contributor to that is a lack of business in the resort ­- occupancy in the hotels is too low to support this stuff.

"Beyond that this most recent meltdown in the world economy caused everyone to put their hands in their pockets and stop spending, so what's happened is that the commercial footprint is shrinking and so the good stuff at the centre of the target is OK, but as you move away into the not-so-good stuff - those are the people who are suffering."

Any long-term Whistler resident will point out that the current downturn in sales both in and out of the village isn't anything new and that the resort has always had its good years and bad. They'd also say that that autumn, like spring, is a difficult time for business, which makes paying rent hard. While the price of commercial rental space has historically been high in Whistler, an increase in the presence of national and international chains is an integral part of that expense equation - as long as landlords can secure stable and elevated rents from corporations who don't blink at the price tag, rates will remain high and sometimes out of the realm of possibility for smaller independent stores to pay.

"I don't know how you fix that; we've been hearing about that situation for decades," said Meredith.

"From the landlord's perspective he has to choose between a national tenant that has a strong covenant and is going to make it work or he can pick somebody that doesn't have a strong covenant and may not be there next month," continued Meredith. "It's pretty hard to say 'OK, you should go into business with someone who is less strong because it feels good.'"

Meredith said rental rates in Whistler are comparable to other good retail areas in the province and while nationals have an advantage when it comes to weathering economic downturns, many Mom and Pop shops have been making ends meet in Whistler for years.

The impetus for sustainability and improvement, says Whistler councillor and WCC board member Chris Quinlan, falls to the business community.

"You make a conscious decision to enter into a lease and you base it on a business plan and if it doesn't work you make a way to get out of the lease and you go away," he said. "If your business plan works within the terms of that lease and within the terms of the rent then you should be good, so that's why you have to be prepared going into it. Lots of people got smacked in the head with the economic tumble two winters ago, and then last winter lots of people took a hit because of Olympic aversion. Overall you have to take responsibility for that."

Construction at the Celebration Plaza will wrap up next year, at which point that part of the Village Stroll - previously home to Germann's closed gallery and a number of other small businesses - will become some of the most desirable commercial real estate in the village.