The Fall Of Niagara Falls

Just after sunrise on Aug. 28, some 40 hot-air balloons will take off from Niagara Falls, Ont. They'll sail over North America's most famous waterfall, then alight on the U.S. side.

The balloons headline a four-day festival called Uplifting Niagara. The area needs it. Tourism in the place once known as The World's Most Famous Address has plunged almost as precipitously as those barrels daredevils used to ride over Horseshoe Falls.

Last year, recession and one of the coldest summers on record drove tourism revenues down some 40% from their peak in 1989, to less than $350 million, according to the Niagara Falls [Ontario] Visitor & Convention Bureau. The occupancy rate for the town's hotels plunged to just 38%, thanks in part to a 1980s building boom that pushed the number of rooms up 30%, to 10,000. And this year, room rates are 20% below the levels of the late 1980s, estimates Dino A. DiCienzo, director of operations for Canadian Niagara Hotels Inc. "Very, very few hotels are making money," he says.

END OF THE RIDE. Kinder weather has boosted tourism a bit this summer, but "we don't anticipate bouncing back until the end of the decade," says Amy Bignucolo, the Convention Bureau's president. Indeed, signs of lasting depression aren't hard to spot. The famous Ferris wheel at Maple Leaf Village has been torn down. The Village itself, the town's largest shopping mall, recently emerged from receivership under new local owners. Across the street from the Minolta Tower, with its commanding view of the falls, a souvenir shop advertising "low, low prices" has shut down for good.

The stunning falls still have the power to attract visitors (table). But officials say tourists stay an average of only four hours. Take Kathryn Hoskins, an American vacationer. She stopped "for just a few hours" one recent Saturday before continuing home to Cincinnati from her trip to Toronto. "We've become the pit stop rather than the destination," worries James V. Glynn, president of Maid of the Mist, the famous fleet of boats that steam under the falls.

Interest in more fashionable destinations is part of the problem. "Niagara Falls faces a lot more competition today," says Constance Lieder of planning consultant LDR International Inc. And after gawking at the falls, there's not much to keep visitors interested. The Canadian side's big draw: a dated, carnival-like strip featuring wax museums, haunted houses, and glow-in-the-dark miniature golf.

The New York side offers even less. The town's ambitious recent development, Falls Street Faire & Station, sits virtually abandoned. The center failed to attract many tourists, and most of it was shuttered last year. The Ramada Inn, which offered the most hotel meeting space, closed earlier this year.

DOUBLE WHAMMY. Worse, the tourism slump has coincided with a drastic drop in local manufacturing. Niagara Falls, N.Y., with a population of some 62,000, has lost a third of its manufacturing jobs in the past decade, mainly from cuts at chemical makers. Similar losses on the Canadian side have pushed unemployment there to a staggering 14.4%.

Hence, some unusual attempts to rebuild the tourist trade. Mayor Wayne Thomson of Niagara Falls, Ont., is pressing for a 75,000-square-foot casino, and there's talk of a new convention center. Plus, the mayor is backing a proposal from Maharishi Mahesh Yogi and magician Doug Henning to build a $630 million theme park, called Maharishi Veda Land, featuring "the world's only levitating building."

But the Ontario government says it won't approve any additional casinos until it sees how its first gambling hall--set to open next year in Windsor--fares. A convention center is no more imminent. And even Thomson admits that he's not "putting any eggs into" Veda Land.

Ambitions are more traditional on the U.S. side. Niagara Falls (N.Y.) Mayor Jacob A. Palillo stopped a plan for a huge factory-outlet mall that would have required $30 million from the city. Instead, he's pushing gradual redevelopment of the depressed downtown.

Until then, it's balloon time.

A snapshot of
      tourism at Niagara Falls
      ONTARIO                         NEW YORK
                   PASSENGERS         500,000
      10,000       HOTEL ROOMS          3,700
      38%          1992 OCCUPANCY RATE    52%
      14.4%        UNEMPLOYMENT RATE    11.9%
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