People arriving in downtown Toronto for this week's gay pride festival - billed as the largest in the world - are being welcomed with a dizzying array of advertisements and product samples as companies try to target gay consumers.

Pride Toronto estimates the market for gay and lesbians as being worth more than $75 billion across the country.

"Our sponsors have realized gay consumers generally have a lot of disposable income and they are extremely loyal to brands that support them," says Fatima Amarshi, executive director of Pride Toronto. "They can be a powerful demographic if you do your marketing properly."

A 2004 survey by Ispos-Reid for the Xtra newspaper chain, which serves gay and lesbian readers across Canada, found the average household income of their readers was $72,800, about $25,200 more than the average Canadian household. Nearly 30 per cent of those responding to the survey had household investable assets of more than $100,000.

Andre Fortier photo, courtesy of Pride Toronto
An estimated crowd of 800,000 lined Toronto streets to watch the 2007 gay pride parade.

According to a sponsorship package distributed by organizers earlier this year, the premier level was available for $100,000, while the partner and contributing sponsor levels came in at $55,000 and $7,500, respectively.

The final list of sponsors includes a wide variety of different national brands from banks to beer companies, says Amarshi.

"We regularly attend conferences with the organizers of other events and they can't believe what we have going on in Toronto. The number of things scheduled during the week has really grown the most," she adds. "And certainly sponsorship is a big part of supporting that."

The city's hotels, bars and restaurants quickly filled up this week as tourists started arriving for Toronto's gay pride festival. Close to a million people are expected to take part in the schedule of events, including a sold-out performance by comedian Sandra Bernhard.

Toronto's gay pride festival continues this weekend with a lesbian-dyke march Saturday afternoon, and the larger gay pride parade Sunday.

Last year's parade featured 144 floats and about 5,000 marchers, with police estimating the crowd at about 800,000 people.

"Good luck getting a hotel room anywhere in the city. They'll all be booked solid," says Toronto city Coun. Kyle Rae, who chairs the city's economic development committee. "Maybe if you go out by the airport (about 50 kilometres from downtown) you might find something, but that's about it."

Rae says he has seen reports that show Toronto's annual pride celebration brings in about $91.9 million in economic benefit to the city.

For a few days, the most valuable piece of real estate in the city won't be a luxury condo in Yorkville or mansion in Rosedale - it will be a seat on the patio at Zelda's. The popular Church Street bar, with a patio bedecked in rainbow flags, has been filled all week with flamboyant drag queens flirting with men in tight leather clothing.

Most of Church Street, running north and south along the eastern part of Toronto's downtown core, is closed to traffic this weekend. The area is formally known as the Church-Wellesley Village, which is home to a lot of the city's gay, bisexual, lesbian and transsexual community.

Andre Fortier photo, courtesy of Pride Toronto
These dancers got into the spirit of the music as they performed.

"The event is finally getting good now, but there were so many opportunities lost by the city in the past," says area business owner Ric Tremaine, former president of the now-defunct Gay Toronto Tourism Guild.

"After SARS in 2003 they had the budget to market to gay tourists, but totally missed the chance. Toronto refused to market to the gay community until it had no choice."

But Tremaine quickly adds when Tourism Toronto hired David Whittaker as its president and CEO last spring, luring him away from a similar post in Miami, everything changed. Gay tourism suddenly took on a new importance in the city, he says, especially with attracting visitors to the gay pride festival.

Whittaker was travelling out of the country and was unavailable for interviews, but Tourism Toronto spokesman Andrew Weir says: "David (Whittaker) is absolutely committed to this. We believe marketing to the gay community is lucrative and strategically important to the city."

One of the biggest signs of an increased marketing effort was an announcement that the International Gay and Lesbian Travel Association will hold its annual convention in Toronto next year. The event will be small in terms of attendance, with only 400 delegates, but its members are influential travel planners, especially in the gay community.

"We worked very hard to get that. It was a fairly large effort with Tourism Toronto and several of our partners," Weir says. "It was going to go to another city, but we stole it right out from under their noses."

One of the biggest changes in Toronto's Church Street neighbourhood this year is the addition of a brand new $1.1-million Bank of Montreal branch at the corner of Church and Alexander Streets.

A bronze statue of Alexander Wood, one of the city's first gay merchants, stands outside the front entrance.

One of the first financial institutions to realize the power of gay consumers, however, was Vancouver-based credit union VanCity, which launched an advertising campaign in 2003 saying it was "coming out" of the closet.

"We wanted to align ourselves with the target niche market and let them know we understand what they're going through," said VanCity's manager of sponsorship development Thomas Dolan.

"It wasn't just a one-time advertising campaign. This was a commitment to partner with the community and work closely with them to understand their needs."

The credit union has been a main presenting sponsor of Vancouver's pride parade for the past three years.

VanCity also made sure it used gay people in its print advertisements rather than actors, and closely examined the language in its documents. "We made sure agreements didn't just refer to Mr. and Mrs. or heterosexual couples. They looked at other possibilities. Our employees had same-sex benefits included if they wanted. The approach had to be consistent throughout the organization," Dolan says.

But while the gay community welcomed the approach, others weren't quite as pleased. Vancouver's Catholic archbishop quietly pulled a VanCity junior credit union program out of schools. After local media learned of the decision, public reaction was immediate.

"That news opened the floodgates to letters, e-mails, phone calls and faxes, alleging everything from bigotry to fascism. The word 'Nazis' was even used. A small but angry crowd screamed obscenities and threats outside my window late at night," Archbishop Adam Exner wrote in an October 2003 letter to parishioners.

"Homosexuals have a right to respect, compassion and dignity. But Catholics have a right to their beliefs and a right to act on their beliefs. Some of the public comment seems to deny us these basic rights."

Dolan said despite the reaction, VanCity's senior executives held firm in its campaign and support for the gay community.

"Did we lose a number of members and their accounts over this? Oh, absolutely. There is no doubt of that. But we gained a lot more in terms of goodwill and support with most of our other members," he says. "We wanted to put the message out there that we were for everyone."

Several thousand people watched Calgary's pride parade earlier this month as it moved along Eighth Avenue into Stephen Avenue Walk and finished off at Olympic Plaza, according to local media reports.

A month-long schedule of events finished with a huge dance party scheduled for last weekend.

Sponsorship manager John Skorka did not return calls, but a sponsorship package on Pride Calgary's website listed the top premier level going for $10,000, while the rainbow level was available for $1,000.

Meanwhile, sponsors at the Winnipeg Pride Festival have had a positive reaction from customers, says the event's sponsorship manager, Robert Cote.

"We haven't had a single sponsor who has pulled out because they had a negative reaction from their customers. Not one," Cote says.

"I have two approaches: Telling them it's a good way of giving back to the community, and there is a solid business case for targeting gay consumers."

(David Hatton can be reached at hatton@businessedge.ca)