Don Cudmore, executive director of the Tourism Industry Association of P.E.I., said he wants the province to crack down on people who offer accommodation but don't charge taxes or comply with health regulations.
Hotel and cottage owners on P.E.I. say hundreds of unlicensed tourism operators are taking their business.
"It's a serious situation. With the kind of numbers we have coming to Prince Edward Island it doesn't jive with the occupancy reports," Cudmore said. "You know, there's some people staying in accommodations that are never reported, never part of it."
Cudmore said there are only three compliance officers on the Island, so it's tough to check every establishment.
He said tourists could be at risk if they stay at unlicensed places that don't meet health regulations.
Cudmore said the province will charge operators who are caught.
According to the 2011 provincial budget, the 2010 tourism industry on the Island accounted for $370 million in economic activity.
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