A massive surge in tourism is changing the Toronto economy

Thestar.com
Nov. 26, 2019
Michael Lewis

A surge in tourism is having a growing impact on Toronto’s economy, with a record number of visits driving jobs growth in accommodations, food service and entertainment while legacy sectors such as manufacturing continue to decline.

A new report, released Monday by Tourism Toronto and the Toronto Region Board of Trade, shows that Toronto’s 27.5 million tourists generated $10.3 billion in economic activity last year, with tourism spending and industries including entertainment, recreation and food services growing ahead of the overall economy.

“The visitor economy is an important pillar in Toronto’s diverse economy, and an incubator for the broader economy that fuels industries and creates jobs for residents,” said Scott Beck, president of Tourism Toronto. “This is a destination with visitors as diverse as the city itself. From the leisure travellers, to the delegates here for meetings, conferences and events, Toronto’s visitor economy is thriving.”

The report, called “Toronto’s Visitor Economy: An Economic Catalyst for the City and the Region,” says tourism accounted for 70,000 full-time equivalent jobs or about 4.6 per cent of Toronto’s workforce in 2018, a net addition of 10,000 over the past five years. The jobs generated $3.1 billion in wages for residents and $1.8 billion in tax revenue for all three levels of government. Visitor arrivals increased 17 per cent during the same period.

Statistics Canada data shows the accommodation and food services sector posting the fastest employment growth from 2000 to 2017 in Toronto, beating out sectors including computer systems and finance and insurance. The manufacturing sector, meanwhile continues its long-term retreat.

While visiting is on the rise, the analysis says visitor spending is growing even faster, with a 46 per cent increase from 2013 to 2018. The increase in visitor spending is driven by Toronto’s growing share of the international visitor market, with long-haul international visitors staying longer and spending more, the analysis shows. It says Toronto accounted for 57 per cent of all room nights sold in the region, as well as 65 per cent of all hotel room revenue.

Job growth in select sectors in Toronto, 2000-2017. Graph from "Toronto's Visitor Economy" report prepared for Tourism Toronto by Tourism Economics.

A spokesperson for Tourism Toronto said the data offers more evidence of the importance of tourism as an economic driver, adding that Toronto has benefited from a global upswing in tourism with spending on luxuries taking a larger share of household budgets amid growing individual wealth.

He said Toronto is enjoying particular momentum due to factors including its world-class air access, surging tech, entertainment and recreation industries and its reputation for diversity and inclusiveness.

The report also found that the benefits of the visitor economy are felt beyond the city of Toronto. When looking at the Toronto region, in 2018, the economic impact of the visitor economy reached $17.6 billion, creating more than 121,000 total jobs, and $5.2 billion in wages. Visitors also provide a significant economic boost for communities outside the Toronto region, as they spend a further $2 billion in communities including Niagara Falls, Ottawa and Muskoka.

“We are Canada’s downtown -- more and more people want to visit Toronto to enjoy everything our city has to offer. This report makes it clear how important our vibrant visitor economy is to supporting jobs and businesses here in Toronto and across Ontario,” said Toronto Mayor John Tory.