Tourism Outline
The economic impact of tourism
A large number of non-resident tourists visited PEI in 2019. They came from many locations outside the province, some stayed for a short while; others for a longer period and they spent differently but significantly on food and beverage, accommodation, souvenirs and transportation. The total gross expenditures of tourists, residents and non-residents, in 2019 exceeded $486.5 million, which represent an increase of about 0.5% in current prices over 2018. Not all of these expenditures can be considered new or incremental. The incremental value, although still substantial, is associated conservatively only with the nonresident tourists and this accounted for $392.2 million of these expenditures in 2019. The nominal incremental value is 0.18% lower than the corresponding value of $392.9 million in 2018. Both levels of expenditures; however, decreased in real terms as inflation in PEI stood at 1.17% between 2017 and 2018. Total gross real tourism expenditures decreased by 0.165% over 2018, while the real incremental tourism expenditures decreased by about 1.35% from their level in 2018.
Only a summary of these results will be discussed here. The presentation of results is organized as follows. First, the economic impact of tourism expenditures organized by origin and by season in terms of the standard impact measures is presented. Second, the incremental economic impacts associated with those arising from the expenditures of non-resident tourists which can be considered legitimately as new money in PEI are highlighted and discussed. Resident tourism expenditures are treated as recirculation of money. This is on account of the general premise that residents who choose to spend their money on tourism in the province may have changed the address of where they spend but not the origin of their disposable incomes. This may not necessarily be totally true as it is possible that these resident tourists could have elected to travel outside PEI but stayed in the province suggesting that the economic impact of their tourism expenditures could be considered incremental representing import substitution expenditures.
A total of 8,900 person years (full time equivalents) of employment are sustained by the total tourism expenditures in the province in 2019. This represents a net gain of 401 full-time-equivalent jobs over the corresponding employment impacts in 2018. This increase (4.72%) in the employment impacts is higher than the nominal
increase in total tourism expenditures and in the opposite direction to the slight decrease in real total tourism expenditures, This is on account of a shift in tourism expenditures to sectors that are more labour intensive than those in 2018. Of the total employment impacts of tourism expenditures in 2019, over 6,940 person years can be considered as incremental employment.
The employment impacts are sustained by a high volume of provincial sales that exceeded $863.5 million province wide in 2019. Total net income (value added) associated with these impacts is estimated to be about $420.3 million, of which about $339.2 million can be considered as incremental. This increase in value added impacts of tourism expenditures is on account of larger expenditures on commodities that have high domestic components.
Tourism Industry Snapshot
Throughout 2020, the tourism industry was deeply and adversely impacted by the COVID-19 pandemic. Border restrictions and public health orders drastically affected the availability of source markets, business capacity, and consumer behaviour.
Prince Edward Island welcomed an estimated 532,600 non-resident visitors during 2020, a -62.9% decrease over 2019. Estimated tourism spending by both residents and non-residents was approximately $237 million, a 51% decrease over 2019.
Total paid overnight stays decreased -55% to 461,373 from a record high of 1,031,513 in 2019. Campground site-nights sold were down -38%, while fixed-roof room-nights sold were down 64%.
In 2020, airport traffic at the Charlottetown Airport was down -81% compared to 2019. Ferry traffic at the Wood Islands ferry terminal decreased -62% compared to 2019. Two-axle and motorcycle traffic at the Confederation Bridge was down -64% compared to 2019. Cruise passengers and crew traffic were eliminated, compared to 183,592 in 2019.
In 2020, golf as represented through Golf PEI experienced a decline of -13% in paid non-member rounds. The meetings and conventions sector attracted 22 meetings/ conventions, that drew 1,980 delegates and generated 2,574 room-nights sold.