Mark Ive, the general manager of the Renaissance Toronto Downtown Hotel, says he was counting on a large block of bookings set aside by the Pam Am organizing committee.
But the committee cancelled 60 per cent of those rooms earlier this year, he said.
"This was very unusual for a booker to reduce their block by so much," he said. "So frankly we were caught off guard."
Ive said his budget is off by about $600,000 and believes the hotel would have done better in July without the Games, which run from July 10 to 26.
Other hotels report a similar experience with their Pan Am contracts.
Some have even dropped the Pan Am bookings altogether because they weren't filling up.
Terry Mundell, president of the Greater Toronto Hotel Association, said filling blocks of rooms abandoned by organizers is a challenge with only three weeks to go before the Games.
Ive said some visitors are telling him they're reluctant to come downtown during the Games because they think it will be too busy.
In a response released Wednesday morning, Pan Am organizers said they worked with the the Greater Toronto Hotel Association and tourism agencies to decide on the January release date for rooms — a plan they say was widely shared.
The date was chosen to give hotels months to rent out those rooms.
Transit getting ready
Meanwhile, Metrolinx is promising that increased signage will make getting around the city clear to the influx of travellers arriving for the Games.
Officials with the Ontario agency say they'll have 800 extra signs going up across GO Transit lines.
Chris Upfold, chief customer officer of the TTC, said construction inside Union Station will be completed in time for the Games.
The TTC will have also extra staffing.
"We have 1,600 TTC back office staff, our accountants, our planners, our lawyers, finance people that have each signed up for a number of shifts and will be there to help our customers as well," Upfold said.