Business report suggests optimism in P.E.I. tourism industry

A new report from Statistics Canada suggests the P.E.I. tourism industry may be gearing up in the hopes of a better year than 2020.

The experimental study, created to help track the economy during the COVID-19 pandemic, tracks the number of business openings and closings by month, as well as the number of active businesses.

Overall, the number of businesses operating on the Island in January has mostly recovered from a crash last spring, and is just about half a per cent lower than January 2020. But that is not the case in the tourism sector.

"The tourism industry recovered really fast," noted UPEI economist George Jia, and particularly in food service and accommodations.

"In fact we're actually, for these two sectors, past the January numbers of last year."

Overall, the number of tourism businesses is up about 3.5 per cent, but in food services and accommodations it's about double that.

These business people may be betting that travel will open up quickly as more people get vaccinated, said Jia, and if they are going to be ready they need to start planning now.

"A lot of the surveys are talking about travel, so the Americans and Canadians actually have a lot of pent up energy to go outside and to go somewhere else, and also to sit down in a restaurant," he said.

"The thing people want to do once the pandemic is over, it's actually just travel."

Fewer businesses closing

The Statistics Canada report also shows that from month to month fewer businesses are closing since a spike last spring, than were before the pandemic.

From January of 2019 to February of 2020 about 220 businesses on P.E.I. would close every month. But from May 2020 to January 2021 it fell to about 185 a month.

Jia suspects there was some culling that happened in the spring.

"All of the ones that were struggling already, well, I mean, that was a point. So we're going to quit and then not come back," he said.

"If we didn't have a pandemic or some of them might actually quit throughout the year, because they're struggling. But then since there was a shutdown and then they ultimately all shut down."

There are a couple of other factors that may be having an impact, he said.

New businesses are likely geared to the very specific conditions of the pandemic, and so will be less vulnerable. As well, businesses that made it through the worst of the spring still have a lot of government support to fall back on.

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