Ottawa. Prince Edward County. Sault Ste. Marie. Kitchener, Waterloo, Guelph & Cambridge

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1 Sault Ste. Marie Kitchener, Waterloo, Guelph & Cambridge Ottawa Prince Edward County PRINCE COUNTY ECONOMIC EDWARD IMPACT STATEMENT ABSTRACT: This study was prepared by inc on behalf of its Client, Airbnb. Tourism is an integral part of the Ontario economy. From sunsets north of Lake Superior to the white sandy beaches of Prince Edward County, Ontario offers unforgettable experiences to visitors of this vast province. This study provides a third-party assessment of the economic impacts associated with the Airbnb home-sharing platform in the context of four regions located in the province of Ontario. These regions include a mid-sized City (Ottawa), a Northern Ontario City (Sault Ste. Marie), a weekend retreat (Prince Edward County), and a university area (Kitchener, Waterloo, Cambridge and Guelph). This report concludes that Airbnb guests in these regions contribute $43 million in spending annually to the provincial economy, supporting over 500 full time employment positions and $23 million in labour income. The information contained in this report is based on a variety of published sources which have been deemed by the authors as both reliable and accurate for the purposes of this study. The study leverages survey data gathered by Airbnb and relies upon the Ontario Tourism Regional Economic Impact Model (TREIM), which was developed on behalf of the Ministry of Tourism, Culture and Sport for the expressed purpose of measuring expenditure impacts with the Ontario tourism, hospitality and events sector. February 8th, 2017

2 CITY OF OTTAWA Canada s Capital Region is a bucket-list destination for Canadians from coast-to-coast. This vibrant City attracts tourists, business travelers, journalists, policy-makers and history-buffs throughout the year. Next to government, tourism is Ottawa s primary calling-card. In 2016, Airbnb guests to the City of Ottawa spent an estimated $32 million in our nation s capital, generating an economic impact of $24 million for businesses in Ottawa. Within the province, Airbnb guests to Ottawa generated $25 million in economic activity, supporting nearly 400 full-time employment positions. estimates that the loss of Airbnb in the Ottawa market would, in effect, strip away approximately $4 million in spending and trim approximately 50 full-time positions. REGIONAL TOURISM ORGANIZATION (RTO) 10: TOTAL VISITORS: 9.0 MILLION 4.0 MILLION (overnights) OVERNIGHT TOURIST SPENDING: $1.2 BILLION SPENDING ON ACCOMMODATIONS: 354 MILLION AVERAGE LENGTH OF OVERNIGHT STAY: 2.95 nights 1: CELEBRATING OUR HERITAGE Museums, art galleries, parks, politics and monuments are Ottawa s signature draws. Ottawa has always been a festival city. In 2017, Ottawa will be centerstage for Canada s 150 th birthday celebration. This year-long event promises to bring a big surge in visitation to the nation s capital. Airbnb provides an ideal opportunity to ensure that every Canadian and every family that wants to be part of the 150 th celebration can find a safe and comfortable place that meets their budget. 2: HEALTH AND HEALING As major regional health centre, patients and their families routinely travel to Ottawa to undergo specialized medical treatments that are often not available in smaller communities. With Airbnb, patients and families from more remote areas can easily find an array of accommodations that provide many of the comforts of home while focus on their treatment and recovery. 3: OPPORTUNITIES FOR EMPLOYMENT Ottawa is Ontario s second largest labour market. In addition to over 100,000 federal government jobs, Ottawa is also home to several large educational institutions and boasts a robust climate for business, R&D and innovation. Ottawa attracts job seekers from across the country and around the world. Airbnb provides a simple platform for job seekers to land their dream job without the stress of finding a place to live immediately. 4: FOOD AND DRINK Whether its grabbing fresh produce grown by local area farmers in the famous Byward Market or a quick meal in Chinatown, Ottawa has a variety of top-rate culinary options. Staying in an Airbnb accommodation provides guests with an opportunity to use kitchen facilities to whip up a meal with fresh food they gathered while traveling throughout the City. MARKET SNAPSHOT POPULATION: 883,400 (City) TOURISM-BASED BUSINESSES: 12,200 OCCUPANCY RATES: 72.4% AVERAGE DAILY HOTEL RATES: $140 AIRBNB GUEST NIGHT RATE: $48 AIRBNB LISTINGS: 2,300 AIRBNB GUEST ARRIVALS: 82,300 AIRBNB AVG BOOKING: 3.3 Nights 2

3 WHY PEOPLE VISIT OTTAWA Ottawa has a very well-diversified tourism market. Based on Ontario tourism data, about half of people who visit Ottawa annually do so to visit friends and family. Ottawa also attracts a large share of pleasure and business travelers. Tourism in Ottawa continues to grow. According to Ottawa Tourism, hotel occupancy, average daily rates and revenue per room were all up in The most common purpose people stay in hotels in Ottawa is for leisure (pleasure), which grew by 3.5% from the previous year. Airbnb provides important alternative accommodation option for those visiting Ottawa to see family and friends, experience Parliament Hill or go skating along the Rideau Cannel. Conventions (Personal) 1% Shopping 0% Prupose of Trip (Overnight Visitors) Business 17% Other Personal 4% VFR 54% Pleasure 24% Source: Ontario Ministry of Tourism, Culture and Sport, RTO 10, (2014) HOW AIRBNB FITS THE MARKET Airbnb offers a diverse array of accommodation options for tourists, overnight visitors, or people who need to be in Ottawa for a short period of time. From an entire house in Orleans, to a spare bedroom in Stitsville, from an elegant apartment with an unforgettable view Parliament Hill, to a modest townhouse in Nepean minutes away from the Ottawa Airport, visitors to the nation s capital can pick the perfect spot to make the most of their stay. When Airbnb guests travel, they routinely cite living like a local as a primarily consideration when choosing the right type of accommodation. In Ottawa, most hotels are located near in Centretown (near Parliament Hill), or situated near major highway interchanges. Airbnb accommodations, however, are spread throughout the City. They provide travelers with the opportunity to truly live like a local, and at the same time, explore specific neighbourhoods off the beaten path. When Airbnb guests stay outside of conventional tourist areas, shops and services in those neighbourhoods are directly impacted in ways they never were before. According to in-house data, Airbnb guests spend more than half (53%) of their expenditures in the neighbourhoods they stay. 3

4 SAULT STE. MARIE Located in the geographic heart of the Great Lakes basin, Sault Ste. Marie is Northern Ontario s third largest city. Sault Ste Marie is an important regional hub for estimated 125,000 people living within the Algoma District which spans over 48,000 square kilometres. Sault Ste Marie is not only an important urban service centre for those living in rural and remote northern communities, it also acts as a gateway/transfer point for many anglers, hunters and resource workers across the north. Sault Ste. Marie is a city with a rich tradition in steel and forestry products. Over the years, Sault Ste. Marie has embraced tourism as one of its economic pillars. The Soo as it is affectionately called, is home to many fine shops, restaurants and entertainment venues. It is also home to several important institutions including Sault Area Hospital and Algoma University. Although a small and growing presence in Sault Ste. Marie, in 2016 Airbnb guests contribute nearly $218,000 annually to the local and provincial economy, including approximately $84,000 to hosts, which can be an important source of income, much of which gets redistributed throughout the local economy. MARKET SNAPSHOT POPULATION: 75,000 (City) TOURISM-BASED BUSINESSES: 1,590 OCCUPANCY RATES: 51.8% AVERAGE DAILY RATES: $104 AIRBNB GUEST NIGHT RATE: $44 AIRBNB LISTINGS: 40 AIRBNB GUEST ARRIVALS: 900 REGIONAL TOURISM ORGANIZATION (RTO) 13B: TOTAL VISITORS: 1,724, ,000 (overnights) OVERNIGHT TOURIST SPENDING: $155,800,000 SPENDING ON ACCOMMODATIONS: $35,000,000 AVERAGE LENGTH OF OVERNIGHT STAY: 3.3 nights AIRBNB AVG BOOKING: 2.4 Nights 1: REGIONAL SERVICES Sault Ste Marie is an important centre in Northern Ontario that provides many services for the surrounding region. The Sault Area Hospital, International Airport and Algoma University are important institutions that attract visitors from across Northern Ontario. Whether it s a visiting professor at Algoma University or someone helping a loved one through medical care, the presence of Airbnb in Sault Ste. Marie can help provide flexible accommodation for visitors with diverse needs. 2: GATEWAY TO NATURE Sault Ste Marie is ideally located as a gateway to provide unparalleled access to nature. Hiking, hunting, canoeing, fishing and ice climbing are just some of the activities available around Sault Ste Marie, making it an ideal outdoor destination that attracts visitors year-round. Almost 40% of people who visited Sault Ste. Marie participated in outdoor activities, including boating, fishing, hiking and viewing the best fall colours. 4

5 WHY PEOPLE VISIT SAULT STE. MARIE Sault Ste. Marie s location attracts visitors for many different reasons. In 2014, there were approximately 694,000 overnight persons visits to RTO 13B. This means that on any given night, there are about 1,900 people looking for somewhere to stay overnight. Conventions (Personal) 0% Shopping 0% Purpose of Trip (Overnight Visitors) Other Personal 10% Business 7% Nearly half of overnight visitors to Sault Ste. Marie visited for pleasure, the majority of whom participated in outdoor activities. The City also functions as a gateway to a regional hospital and university, an international airport and the United States. VFR 36% Pleasure 47% Although still a small presence, Airbnb Source:Ontario Ministry of Tourism, Culture and Sport, RTO 13B (2014) can provide guests and visitors with the flexibility to find accommodations that serve their individual needs. Airbnb can also provide the City with a flexible way to expand overnight accommodations as their tourism sector grows. HOW AIRBNB FITS THE MARKET AFFORDABILITY For many families, traveling in a large group can become exceedingly expensive when overnight accommodations require a family to book multiple hotel rooms. Airbnb provides an opportunity for families to stay under one roof at an affordable rate. Airbnb accommodations also provide amenities such as kitchens, multiple bedrooms and laundry, that differentiate them from traditional hotels and make travel more affordable. In guest surveys conducted by Airbnb in other markets, including Toronto, the majority of guests say they chose Airbnb because they wanted more amenities than a hotel had to offer. OPPORTUNITY The labour market in Sault Ste. Marie is closely tied to the steel industry and the resource sector, particularly forestry. While these industries remain the life-blood of the Soo, global economic cycles can hit communities like Sault Ste. Marie very hard. Fortunately, an abundance of natural beauty and the presence of a busy municipal airport has enabled the City to pivot toward tourism as a major economic pillar. Over the past 20 years, the local, provincial and federal governments have worked diligently to re-position the Soo as destination for business and leisure travel. Building on that success, Airbnb provides an exciting opportunity for Sault Ste. Marie residents to directly participate and help grow the local tourism industry. 5

6 PRINCE EDWARD COUNTY Prince Edward County ( PEC, the County ) has quickly emerged as a rural hotspot for weekend and extended getaways. From a weekend visiting shops, wineries and spas, to a weekend fishing in the Bay of Quinte; from a family vacation on white-sandy beaches, to couplesonly week of culinary indulgences, the County has something for just about everybody. In 2016, Airbnb guests to the County spent approximately $5.6 million, generating a local economic impact of $3.8 million for businesses. Province-wide, Airbnb guests to the County generated $4.4 million in economic impact and supported 66 full-time employment positions. MARKET SNAPSHOT POPULATION: 25,000 (County) TOURISM-BASED BUSINESSES: 6,540 OCCUPANCY RATES: 57.9% AVERAGE DAILY RATES: $110 AIRBNB GUEST NIGHT RATE: $66 REGIONAL TOURISM ORGANIZATION (RTO) 9: TOTAL VISITORS: 8.0 MILLION 2.7 MILLION (overnights) OVERNIGHT TOURIST SPENDING: $559 MILLION SPENDING ON ACCOMMODATIONS: $177 MILLION AVERAGE LENGTH OF OVERNIGHT STAY: 2.7 days 1: EXPLORE AND PLAY Prince Edward County has grown in popularity in recent years as the premier destination for a weekend getaway or a summer retreat. From antiquing in the quaint communities of Picton and Wellington, to cycling through the rolling countryside, Prince Edward County has a variety of activities for people of all ages. Airbnb can act as an important short-term accommodations option for those looking for stay for a weekend or for a week-long vacation. 2: ARTS AND ENTERTAINMENT Prince Edward County is home to broad array of artistic and cultural activities. Visitors to the County can chart their own course along the Arts Trail and meet talented artists in a variety of exciting studios and galleries. Music lovers can take in a concert at the Regent Theatre in Picton or an intimate gig at the Hayloft Dancehall. If live theatre is your scene, Festival Players have been entertaining audiences on outdoors stages for more 10 years 3: LEISURE AND RECREATION From walking along the sandy beach and Sandbanks Provincial Park to crosscounty skiing at one of the County s many parks, trails and conservation areas, Prince Edward County offers a variety of amenities for year-round travelers. Airbnb provides an opportunity for people with a second home or a B&B in the County to host guests throughout the year. 4: FOOD AND DRINK The many breweries and distilleries, wineries and cideries, that have popped up in Prince Edward County makes the County a culinary destination in Southern Ontario. Food aficionados can take in a meal at the Drake Devonshire or attend the Canadian Cheese festival or Maple in the County. Many of the homes listed on Airbnb provide amenities such as kitchens that provide guests with an opportunity to prepare a meal with some of the culinary delights picked-up in the County. AIRBNB LISTINGS: 330 AIRBNB GUEST ARRIVALS: 17,850 AIRBNB AVG BOOKING: 2.6 Nights 6

7 WHY PEOPLE VISIT PRINCE EDWARD COUNTY In 2014, there were almost 2.7 million overnight person visits to RTO 9, and many of these were likely to Prince Edward County. This number has certainly increased due to year over year buzz about the County in nearby markets such as Toronto, Montreal and Ottawa. Within the RTO, visiting family and relatives and traveling for pleasure were the primary reasons people visited. When people visit the County, they stay in a variety of accommodations, ranging from a quaint inn in Picton, to camping in Sandbanks Provincial Park. Airbnb has become an increasingly popular option for accommodations in PEC, Nights Stayed in Various Accommodations Private Cottage 11% Private Home 43% with over 330 unique listings available. The fact is, that not everyone wants to stay in a traditional hotel or B&B. Airbnb provides flexible alternatives for those seeking or requiring - non-traditional accommodation options. HOW AIRBNB FITS THE MARKET Hotel / Motel 18% Commercial Cottage/Cabin 8% Camping / RV Facility 12% SCALABILITY The increasing popularity of the County especially during peak seasons and high demand festival weekends, has been a blessing for many accommodation providers. For many visitors who didn t book weeks or even months in advance, the lack of conventional accommodations can make the difference between visiting PEC or simply going somewhere else. The arrival of Airbnb in the market provides homeowners in the County with an opportunity to play a role in the tourism industry, by helping to alleviate periodic gaps in supply and demand. FLEXIBILITY The County has a long and well-defined history of people renting their properties during peak tourism seasons. At the same time, PEC is also home to a variety of popular B&B operations that accommodate guests throughout the year. These second homes and B&B s have used various channels in the past to advertise these spaces, whether through a vacation rentals website or other online tools. Airbnb simply provides a more responsive and flexible market platform to advertise their space offerings to a global audience. Other 8% Source: Ontario Ministry of Tourism, Culture and Sport, RTO 9, (2014) 7

8 KITCHENER, WATERLOO, GUELPH & CAMBRIDGE Often referred to as Silicon Valley North, the Kitchener, Waterloo, Guelph and Cambridge market has been seen rapid ascent as global hotspot for tech, innovation and academic research. In 2016, Airbnb guests to the Kitchener, Waterloo, Guelph and Cambridge region spent over $5 million during their stay, generating a local economic impact of $3.7 million. Province-wide, Airbnb guests within the Waterloo/Guelph market generated $4.4 million in economic activity, supporting nearly 70 jobs. REGIONAL TOURISM ORGANIZATION (RTO) 4: TOTAL VISITORS: 10,800,000 3,350,000 (overnights) OVERNIGHT TOURIST SPENDING: $582,900,000 SPENDING ON ACCOMMODATIONS: $144,400,000 AVERAGE LENGTH OF OVERNIGHT STAY: 2.4 Nights MARKET SNAPSHOT POPULATION: 600,000 TOURISM-BASED BUSINESSES: 11,273 OCCUPANCY RATES: 57.3% AVERAGE DAILY RATES: $110 AIRBNB GUEST NIGHT RATE: $41 AIRBNB LISTINGS: 620 AIRBNB GUEST ARRIVALS: 11,300 AIRBNB AVG BOOKING: 4.1 Nights 1: INNOVATION CAPITAL The Kitchener, Waterloo, Guelph and Cambridge area is widely regarded as Canada s premiere technology and innovation cluster. Supported by a highlyskilled workforce and acclaimed post-secondary institutions, the region continues to grow, attracting the likes of Google, Blackberry and Intel, as well as hundreds of young, eager start-ups. This in turn has drawn jobseekers, new businesses and prospective students. Airbnb offers visitors an affordable alternative while they pursue job opportunities, or come for a business meeting. 2: TOURISM Tourism continues to draw guests to the region for a variety of purposes. From the historic downtowns of Guelph and St. Jacobs, to festivals in Waterloo, and craft breweries and cafes emerging in Kitchener, there are several reasons for tourists to come to the region. Airbnb provides accommodation options in a variety of neighbourhoods, close to where people want, or need, to stay. 3: EDUCATION CLUSTER This area is home to several post-secondary institutions. The University of Waterloo, University of Guelph and Wilfred Laurier University are just some of the schools in the area. These institutions attract students from across Canada, and across the world, and also host major conferences and events. Guests look to Airbnb as an affordable option while considering attending one of these schools, attending a conference, or to visit family and friends studying in the Waterloo Region. 8

9 WHY PEOPLE VISIT KITCHENER, WATERLOO, GUELPH & CAMBRIDGE In 2014, roughly 3,350,000 visitors stayed overnight in RTO 4. It is reasonable to assume that the majority of those stays occurred in the region s largest cities, Kitchener, Waterloo, Guelph and Cambridge. The area s academic and technology focused reputation continues to attract young people pursuing opportunities in education, employment, networking, or even just to visit friends. This could explain why in % of all visitors to the area were under the age of 25. Additionally, the area s many cultural amenities, events, and growing food scene make it an accessible and affordable weekend getaway for Southern Ontario residents. Between education, job opportunities, heritage, festivals, natural beauty and café/brewery culture, each of the four cities offers a different flair, and a unique experience. With direct GO Train access to the region from Toronto s Union Station, the area is an accessible and affordable weekend getaway. Airbnb can provide visitors with the flexibility to find a bed in the municipality, and neighbourhood that best meets their needs for visiting the area. HOW AIRBNB FITS THE MARKET FLEXIBILITY Whether you re a prospective student looking for a basic space to rest, a visiting professor looking for convenient place to stay for an academic conference, or a group of friends looking to take in the annual Oktoberfest, Airbnb provides an option for finding the perfect place tailored to an individual s specific needs and tastes. Alternatively, if you re a homeowner local homeowner basement suite, whose student tenants have gone home for summer break, Airbnb provides a great resource to ensure that your extra space is still earning some additional income during the school break. AFFORDABILITY Age of Visitors to Kitchener, Waterloo, Cambrige and Guelph 55 and Over 30% For students, jobseekers, and those simply looking for an affordable weekend getaway, Airbnb provides accommodation options at a range of prices. This may make the difference between staying at home, or taking the trip to a conference, job interview, or festival. With an average rate of $41 per guest night, Airbnb keeps the Kitchener, Waterloo, Guelph and Cambridge area accessible and viable to those on a budget, or taking leisurely and discretionary trips. 45 to 54 14% 35 to 44 13% Under 24 27% 25 to 34 16% Source: Ontario Ministry of Tourism, Culture and Sport, RTO 4, (2014) GEOGRAPHY In a region that attracts people for so many different reasons, Airbnb gives guests the ability to find the right location in the right municipality. Options for Airbnb in the region are diverse and can be found in most neighbourhoods. This offers guests spaces to stay in areas that are often not best served by traditional accommodations. 9

10 BENEFITS OF SHORT-TERM ACCOMMODATIONS OPTIONS HOST INCOME Airbnb host income means different things to different people. It could be a B&B operator in Prince Edward County trying to run a more competitive business. Or, perhaps it s a student in Waterloo subletting a room while they are away in the summer or on a co-op work term. Regardless of the rationale for posting a room or an entire home on Airbnb, this platform provides an important, and in some cases essential form of income for people. In the four markets analyzed in this report, there were nearly 3,300 unique Airbnb listings in 2016, ranging from 37 listings in Sault Ste. Marie to approximately 2,300 listings in Ottawa. According to Airbnb, the typical annual income for a host in these regions was approximately $4,700, which translates into approximately $390 per month. This is a meaningful source of income for many Airbnb hosts. 3,000 2,000 1,000 0 $12,000 $9, Unique Listings that Hosted During Sault Ste. Marie Prince Edward County Kitchener, Waterloo, Guelph & Cambridge Typical Annual Income by Host $10,665 2,304 Ottawa As shown, this annual income ranged from $1,988 annually in Sault Ste. Marie to $10,665 in PEC. The relatively high income generated by hosts in PEC reflects, in large part, preexisting B&B operators $6,000 $3,000 $0 $1,988 Sault Ste. Marie Prince Edward County listings available rooms and the large share of seasonal homes in the County, with homeowners attempting to rent their space when it is not being utilized by the owner. Based on host surveys conducted by Airbnb in Ontario, a large share of income generated by Airbnb hosts actually remains within the local economy. Research suggests that hosts spend their Airbnb incomes on items such as groceries, restaurant meals, household goods and cleaning/ maintenance services. All of these expenditures have a direct, positive economic benefit on the local economy. $3,403 Kitchener, Waterloo, Guelph & Cambridge $4,247 Ottawa $4,714 Total Average 10

11 GUEST SPENDING Guest spending is an important source of economic activity in municipalities across Ontario. When visitors spend money on accommodations, at restaurants and in grocery stores, it helps support jobs in the local economy and generates tax revenue. $140 $120 $100 Average Spending Per Guest Per Night $121 $98 $98 $117 Based on information available from the Ontario Ministry of Tourism, Culture and Sport, which compiles data from the Statistics Canada Travel Survey of Residents of Canada, average daily spending by overnight guests in each of the regions ranged from $98 per person per night to $121 per person per night. 1 As was identified in the Toronto guest spending survey, in comparison to information available for RTO 5, which represents the Toronto market, Airbnb guests spent more than the provincial average in the RTO. Therefore, the estimates of spending in the four regions could be considered conservative. Guest spending occurs across a number of key categories, including restaurants, groceries, retail shopping and transportation. On average, across the four regions, approximately 42% of spending went towards accommodations. As noted earlier in this analysis, a large portion of this spending stays within the local economy when guest use Airbnb. $80 $60 $40 $20 $0 Sault Ste. Marie Average Guest Spending Per Night, Per Guest Recreation & Entertainment 5% Prince Edward County Retail Shopping 9% Kitchener, Waterloo, Guelph & Cambridge Transportation 18% Ottawa Note: All spending data is from informationavailable from the Ontario Ministry of Tourism, Culture and Sport, except for accommodation spending, which is from Airbnb. Spending data inflated to Spending on food and beverage accounted for about 1 in every 4 dollars spent by visitors, while about 1 in every 5 dollars was spent on transportation, including gas, car rentals, etc. Food & Beverage 26% Accommodation* 42% Airbnb guest spending provides an economic benefit in each community in which it occurs. * Based on information provided by Airbnb. Source: inc. based on data from the Ontario Ministry of Tourism, Culture and Sport and Airbnb. 1 All spending data is from the Statistics Canada Travel Survey of Residents of Canada, except for accommodations spending, which is based on Airbnb data. In this analysis, Ottawa is represented by RTO 10, Kitchener, Waterloo, Cambridge and Guelph are represented by RTO 4, Prince Edward County is represented by RTO 9 and Sault Ste. Marie is represented by RTO 13b. While the boundaries for these regions and the RTO s do not match exactly, for the purposes of this analysis, we consider these differences to have little consequence on our results. 11

12 ECONOMIC IMPACT OF AIRBNB Tourism is an important and ever growing part of the provincial economy. From a fishing camp near Sault Ste. Marie to visiting the Parliament Hill in Ottawa, areas across the province experience and benefit from tourism in different ways. One way visitor accommodations are facilitated is through Airbnb. Spending by Airbnb guest have a significant positive economic benefit across the province. From the money spent at restaurants and stores to the income collected by Airbnb host, this spending is circulated back into the provincial economy to create jobs and generate tax revenue for all levels of government. Economic impact is one of the best methods to measure the contribution of Airbnb to local economies. In this section of the analysis, we have estimated the economic impact of Airbnb guest spending on; The City of Sault Ste. Marie; Prince Edward County; The Cities of Kitchener, Waterloo, Cambridge and Guelph; and, The City of Ottawa. To estimate the economic impact of Airbnb host and guest spending on these municipalities, we have used the Ontario Tourism Regional Economic Impact Model (TREIM) that is made available through the Ontario Ministry of Tourism, Culture and Sport. The purpose of this model is to determine the economic impact of visitors and businesses spending on the local and provincial economies 2. The TREIM allows for the calculation of the economic impact of direct spending by Airbnb guests, as well as the indirect and induced impact from subsequent rounds of spending. Economic Impact of Airbnb Ottawa Sault Ste. Marie Prince Edward County Kitchener, Waterloo, Guelph & Cambridge Expenditure $31.8 Million $218,000 $5.6 Million $5.1 Million Growth Domestic Product (GDP) $25.4 Million $157,000 $4.4 Million $4.4 Million Jobs (Full-Time, Full-Year) 390 Jobs 2 Jobs 70 Jobs 70 Jobs Labour Income $17.1 Million $104,000 $2.9 Million $3.0 Million Estimated Tax Revenue $11.4 Million $71,000 $2.0 Million $2.0 Million 2 For further information on the TREIM, please visit 12

13 In calculating the economic impact of Airbnb, we have relied upon records of listings and bookings provided by Airbnb during Data provided to from Airbnb indicates that during 2016 a total of 47,800 reservations were booked in these regions of the province 3. In estimating the economic impact of this Airbnb guest spending, we have relied on traveler spending information from the Statistics Canada Travel Survey of Residents of Canada and made available by Ontario Ministry of Tourism, Culture and Sport. This spending has been adjusted by based on information provided by Airbnb on the average cost of accommodations in each of the areas surveyed. Based on this information, Airbnb guests visiting the four markets spent on average, between $98 and $121 per day per guest. Guest spending has an impact on a variety of business, from buying a coffee at the local café, filling the car with gas, paying admission at the museum or buying a new t-shirt at the local clothing store, spending by Airbnb guests provides a positive economic benefit to many local businesses, in addition to extra income for Airbnb hosts. Overall, in the four markets reviewed in this analysis, guest expenditures totaled nearly $43 million in This ranged from approximately $220,000 in Sault Ste. Marie to nearly $32 million in Ottawa, with the majority of this spending staying within the local economy. Based on the TREIM, the nearly $43 million in expenditures related to Airbnb guest spending in these four communities supports 522 jobs, generates $23.1 million in labour income and results in $15.4 million in taxes to the various levels of government. We have also calculated an Net Airbnb Impact based on data provided to by Airbnb and the results of the Airbnb Guest Survey 4, conducted in While these survey results are Airbnb guests visiting the City of Toronto, the results are similar to survey results in the City of Vancouver. Therefore, we have assumed these results would also apply in the four markets analyzed in this report. The intent of this net Airbnb impact is to measure the unique value of Airbnb to the local and provincial economy. In our analysis, we have calculated the specific impact of Airbnb in two ways: 1. Fewer People Traveling to the municipality - In the Airbnb Guest Survey, 2.3% of respondents indicated that they would not have visited Toronto if Airbnb was not available. Therefore, the approximately 47,800 reservations that were booked through Airbnb in 2016 would be reduced by 1,080 reservations if Airbnb was not available. Based on average guests per reservation and average nights per guest, this would result in nearly 8,400 fewer guest nights in these municipalities. Based on average daily spending, this represents $965,000 in lost visitor spending. 2. Shorter Trips Based on the Airbnb Guest Survey, 32% of guests indicated that they would not have stayed in the municipality where they travelled as long if Airbnb wasn t available. Therefore, we have assumed that for those that still travel to the municipality, 32% would stay one night less. Overall, this results in approximately $4.1 million in lost visitor spending. 3 Data is for the period from December 1, 2015 to December 1, The Airbnb Guest Survey was a survey of 184 guests who made reservation in the City of Toronto in

14 Based on these two impacts, if Airbnb was not available, it would result in $5.1 million in lost visitor spending. Based on the TREIM, the Net Airbnb impact supports 61 jobs province-wide, generates $2.7 million in labour income and results in $1.8 million in taxes to the various levels of government. $4,000,000 $3,000,000 Net Airbnb Impact of Municipality Fewer People Travel People Travelling Don't Stay as Long $3,760,000 $2,000,000 $1,000,000 $0 $34,000 $805,000 $464,000 Sault Ste. Marie Prince Edward County Kitchener, Waterloo, Cambridge, Guelph Ottawa It is also important to note that we consider our analysis conservative for the following reasons: The TREIM Model only looks at the impact within the local municipality and the Province of Ontario. However, it is important to note that there will also be indirect and induced economic benefits that will support jobs and labour income throughout Canada. As was demonstrated in the Airbnb Toronto Economic Impact Study, Airbnb guests tend to spend more per person and per night than the RTO data. Therefore, by using the RTO data for these four areas, we have likely underestimated the full impact of Airbnb guest spending. In the Airbnb guest survey, 2.3% of respondents indicated that they would not have travelled to Toronto if Airbnb wasn t available. Another 4.0% of respondents indicated that they would have stayed with family or relatives if Airbnb wasn t available. This results in nearly $1 million in lost host revenue, a portion of which would be recirculated throughout the economy to support additional jobs, labour income and taxes. 14

15 DETAILED ECONOMIC IMPACT AIRBNB GUEST SPENDING (OTTAWA, ON 2016) Impact of Airbnb Guest Net Airbnb Impact Ottawa Ontario Ottawa Ontario Total Visitor Spending $31,781,000 $31,781,000 $3,760,000 $3,760,000 Gross Domestic Product Direct $15,477,000 $15,477,000 $1,831,000 $1,831,000 Indirect & Induced $7,411,000 $9,964,000 $877,000 $1,179,000 Total $22,888,000 $25,441,000 $2,708,000 $3,010,000 Multiplier Labour Income Direct $10,325,000 $10,325,000 $1,221,000 $1,221,000 Indirect & Induced $4,947,000 $6,771,000 $585,000 $801,000 Total $15,272,000 $17,096,000 $1,806,000 $2,022,000 Multiplier Employment (Full Time, Full Year) Direct Indirect & Induced Total Multiplier n.a. n.a. Estimated Total Taxes Federal 5,871,000 6,368, , ,000 Provincial 4,615,000 4,997, , ,000 Municipal 58,000 64,000 7,000 8,000 Total 10,544,000 11,429,000 1,248,000 1,352,000 Note: Visitor spending and economic empact has been rounded the nearest $1,000. Source: inc. based on Airbnb 2016 data, leveraging the Tourism Regional Economic Impact Model. 15

16 DETAILED ECONOMIC IMPACT AIRBNB GUEST SPENDING (SAULT STE. MARIE, ON 2016) Impact of Airbnb Guest Net Airbnb Impact Sault Ste. Marie Ontario Sault Ste. Marie Ontario Total Visitor Spending $218,000 $218,000 $34,000 $34,000 Gross Domestic Product Direct $99,000 $99,000 $15,000 $15,000 Indirect & Induced $49,000 $58,000 $8,000 $9,000 Total $148,000 $157,000 $23,000 $24,000 Multiplier Labour Income Direct $64,000 $64,000 $10,000 $10,000 Indirect & Induced $33,000 $40,000 $5,000 $6,000 Total $97,000 $104,000 $15,000 $16,000 Multiplier Employment (Full Time, Full Year) Direct Indirect & Induced Total Multiplier n.a. n.a. Estimated Total Taxes Federal 37,000 39,000 6,000 6,000 Provincial 30,000 32,000 5,000 5,000 Municipal Total 67,500 71,500 11,100 11,100 Note: Visitor spending and economic empact has been rounded the nearest $1,000. Source: inc. based on Airbnb 2016 data, leveraging the Tourism Regional Economic Impact Model. 16

17 DETAILED ECONOMIC IMPACT AIRBNB GUEST SPENDING (PRINCE EDWARD COUNTY, ON 2016) Impact of Airbnb Guest Prince Edward County Net Airbnb Impact Prince Edward County Ontario Ontario Total Visitor Spending $5,592,000 $5,592,000 $805,000 $805,000 Gross Domestic Product Direct $2,791,000 $2,791,000 $402,000 $402,000 Indirect & Induced $1,036,000 $1,600,000 $149,000 $230,000 Total $3,827,000 $4,391,000 $551,000 $632,000 Multiplier Labour Income Direct $1,860,000 $1,860,000 $268,000 $268,000 Indirect & Induced $680,000 $1,081,000 $98,000 $156,000 Total $2,540,000 $2,941,000 $366,000 $424,000 Multiplier Employment (Full Time, Full Year) Direct Indirect & Induced Total Multiplier n.a. n.a. Estimated Total Taxes Federal 971,000 1,081, , ,000 Provincial 775, , , ,000 Municipal 10,000 12,000 1,000 2,000 Total 1,756,000 1,953, , ,000 Note: Visitor spending and economic empact has been rounded the nearest $1,000. Source: inc. based on Airbnb 2016 data, leveraging the Tourism Regional Economic Impact Model. 17

18 DETAILED ECONOMIC IMPACT AIRBNB GUEST SPENDING (KITCHENER, WATERLOO, GUELPH & CAMBRIDGE, ON 2016) Impact of Airbnb Guest Kitchener, Waterloo, Guelph & Cambridge Ontario Net Airbnb Impact Kitchener, Waterloo, Guelph & Cambridge Ontario Total Visitor Spending $5,124,000 $5,124,000 $464,000 $464,000 Gross Domestic Product Direct $2,460,000 $2,460,000 $223,000 $223,000 Indirect & Induced $1,190,000 $1,955,000 $108,000 $177,000 Total $3,650,000 $4,415,000 $331,000 $400,000 Multiplier Labour Income Direct $1,622,000 $1,622,000 $147,000 $147,000 Indirect & Induced $795,000 $1,344,000 $72,000 $122,000 Total $2,417,000 $2,966,000 $219,000 $269,000 Multiplier Employment (Full Time, Full Year) Direct Indirect & Induced Total Multiplier n.a. n.a. Estimated Total Taxes Federal 936,000 1,085,000 85,000 98,000 Provincial 745, ,000 67,000 78,000 Municipal 11,000 13,000 1,000 1,000 Total 1,692,000 1,957, , ,000 Note: Visitor spending and economic empact has been rounded the nearest $1,000. Source: inc. based on Airbnb 2016 data, leveraging the Tourism Regional Economic Impact Model. 18

19 NOTES: 19

20 CONTACT: INFO Alex Dagg Public Policy Manager, Canada Airbnb inc. Peter Thoma, MCIP, RPP, PLE Partner inc