Tadayuki (Tad) Hara UNWTO Consultant, Associate Professor & Senior Research Fellow Rosen College of Hospitality Management, University of Central Florida,

Tadayuki (Tad) HaraUNWTO Consultant, Associate Professor & Senior Research Fellow

Rosen College of Hospitality Management, University of Central Florida,

UIS Culture Satellite Account Experts Meeting (CSAEM)

UNESCO Institute of Statistics

4-6th November 2015Montreal, Canada

CSA in perspectiveP21 3.3 Comparisons: Conformity with a Framework for Satellite Accounts

(1)Over-Emphases on the Production Account (Supply side) of Culture

In the tourism satellite account methodological framework (4.31), a supply-use table (Table 6 in TSA) is referred as follows. “This table is the core of the Tourism Satellite Account. Without its compilation, even with partial data, the term Tourism Satellite Account applied to the compilation of some of the tables would be misleading.”

(2) Lack of Supply-Use Table of Culture

It is noteworthy that both 2009 Manual for Culture Satellite Account and 2015 Methodological Guide made by the Convenio Andres Bello (CAB) clearly display supply-use table’s template and its explanation for implementation. (Chapter 6 of 2009 Manual for Culture Satellite Account Supply Use Table of Cultural Products “Cuadro oferta-utilizacion de los productos culturales” pp120-139 and Chapter 5 of 2015 Methodological Guide, Balancing Supply and Use of Cultural Products, “CAPÍTULO 5. EQUILIBRIOS OFERTA-UTILIZACIÓN DE LOS PRODUCTOS CULTURALES” pp106-127).

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(3) Differences in Scope of Production Account of Culture

Due to lack of official framework, however, we see some variations when specific production accounts are included or excluded. In the case of Uruguay, there are fewer production account identified as culture production account, perhaps to focus on more relevant culture production sectors. This may lead to underestimation of the culture production industry by excluding industrial sectors which are not considered as core culture sectors but still produce culture production out of their total production.

Canada included both Cultural Heritage (includes artifacts, collections, antiques, and services such as museums, public art galleries, art museums, historic sites, historic buildings, planetarium, and archaeological sites) and Natural Heritage (includes collections and services such as botanical gardens, aquaria, zoological sites, and national parks, provincial parks and reserves, conservancy sites, and conservation areas with interpretation). Spain and Uruguay included heritages, but others did not include heritages.

Treatment of production sector of design, cultural education and sports are also split among the nations which developed culture satellite account. For the case of Sports, Canada included in the creation of culture satellite account, but sport is disaggregated from the rest of culture, so that readers can easily deduct sport-segment from the rest of Culture for better international comparison. This shows a wise response to cater to domestic requests while they wish to compile internationally comparable data simultaneously. Australia took a similar ways of presentation of both culture and creative activities, decomposed into two so that readers can see separate components of culture sector, creative sector and the combined sector. 3


(4) Relative Lack of Allocation Factors/ Culture Industry RatioUNESCO Handbook 2012 mentioned “allocation factors” in table 6, which is to “determine the proportion of cultural activities from non-cultural activities in an industrial classification group”. Though the report said “allocation factors have serious limitations”, that may have been a view from production side. The industry ratio can be observed from the demand side and in the field of tourism satellite account, tourism (industry) ratio plays very important role in measuring more precise tourism commodity portion of the output. And the tourism industry ratio will provide researchers with smooth and accurate convenience, because it can also be used to measure tourism employment out of total employment in sectors in question.

Without using the appropriate ratio to distinguish culture output out of total output, the methodology is destined to overestimate the true contribution of that sector. Indeed, it is encouraging to acknowledge that both Argentine and Uruguay mentioned the risk of overstatement without using proper culture industry ratios.

Argentine reports says “progress has been made in the estimate of consumption expenditure of households in cultural products on the basis of the results obtained from the Household Income and Expenditure survey and in the estimate of general government expenditure on cultural products”. These data will show the estimated total culture commodity consumption and thus ratio can be calculated from demand side.

Uruguay mentioned in the limitation of the study that “telecommunication sector represent 2.6% of GDP… Not all production of telecommunication and information technologies sector is creating production so if incorporate the entire industry (as culture industry) we are overestimating the cultural sector…”.

Looking for best practices outside of pure culture area may yield useful results from the experiences of those who had been involved in other satellite account.

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(4) Relative Lack of Allocation Factors/ Culture Industry Ratio (continued) Based on what we observed, there are some common traits of Culture Satellite Accounts as follows;

•Most of them built a basic framework along the production accounts by confirming specific products whose output would be considered as outputs of culture activities.

This enables better usage and compatibilities with data available in System of National Accounts, and it helps national statisticians in SNA area deal with a new work of Culture Satellite Accounts.

•Definitions of specific industrial outputs appear to be following previously available guidelines, such as UNESCO FCS 2009 or the Manual created by CAB.

This will make the reconciliation work among different CSAs relatively transparent.

•While a general direction has been acknowledged, not all CSA came to generate an important table of “supply and use table”, which requires statisticians to reconcile production accounts with actual usage of each output in respective industrial sectors of culture.

It is notable that some nations claimed to have reached this stage successfully.

•There are some discrepancies as to which industrial production should be regarded as culture outputs, which requires organizations like UNESCO or CAB to offer global guidelines. This point has been mentioned in some of the culture satellite account reports, thus those national report have been positioned as “experimental” (Canada) and “some of the data used to produce the satellite accounts have been extended to the limits of their design capabilities. Assumptions underlying the estimates also have an effect on the estimates’ quality” (Australia).

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(5) Relative Lack of Emphases on trade accounts

It is likely that priority for production account identification might have contributed to a relative lack of emphasis on collecting data on trade accounts. To identify size of culture as an industry, summation of relevant account which produce culture output is certainly one approach, but not all the culture production were made domestically, owing to imports of culture products.

Once the account starts to look into use (demand) side of the satellite account, total consumption (by household, firms and government) and final demand from outside of the nation (exports) have to be all considered. Export includes domestic expenditures made by inbound visitors, or foreign visitors who came to enjoy, experience and consume culture and its products in the host nation. While the relative importance would vary among nations, culture’s ability to earn foreign currency might be significant or strategically important to the national economy.

Therefore, culture satellite account might as well develop use (demand) side of the table, so that supply side data and use side data can be reconciled to increase accuracy of measurement, in consideration of both imports and exports.

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(6) Demand (use) side as an Engine of the whole economy

Going back to a very basic of Input-Output structure, on which both System of National Accounts and Satellite Accounts are made, it is the final demand (= consumption = use) which moves the entire economy, not the supply side.

Tourism Satellite Account has shown clear acknowledgement on the importance of demand side, to the extent that a discussion on satellite account or tourism statistics allocate significant portion of their work on a definition of a visitor, a consumer. That shows a contrast to a production side approach in which all production from culture sectors are assumed to be consumed. Latest satellite account reports appear to be aware of this issue. This topic is related to the discussion on allocation factor/ culture industry ratio to extract appropriate ratio of culture production consumption out of total output, and later to assess numbers of employments which are attributable to culture consumption.

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(7) Importance of Inter-institutional Collaboration for Data

For nations which developed another satellite account such as tourism in the past, importance of securing assistance from various governmental institutions and non-governmental organizations has been well-understood and considered as critical for sustainable successes of satellite account.

Use (demand) side of data can often be obtained only with inter-institutional collaboration, such as balance of payments, trade, household/expenditure survey, immigration data. In that regard, it is quite noble for any satellite account reports to acknowledge names of surveys or names of other institutions which helped researchers collect relevant data, even though not all the reports show those information.

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Possible Directions (P27-34)

4.1 Usage of System of National Accounts to Identify Specific Production Accounts for Culture Outputs

4.2 Identifying Trade Flows to Capture Net Trade Balances

4.3 Strengthening the Use-Consumption side of the Data

4-3-1 Discussion on whether consumers have to be verified to distinguish culture consumers and general consumers

One thing we should discuss would be whether some kind of ratios should be used to decompose the same commodity into culture product and non-culture product.

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1010

Introduction to TSAIntroduction to TSA

All People(Non-visitors)

WhosePurchase?

Visitors

Tourism Commodities

Tourismconsumption

All Consumption(Non-tourism commodities)

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Challenges in identifying “Tourism as an Industry”?

Identify ONLY the output of industries that Identify ONLY the output of industries that are are typically associated with tourism typically associated with tourism activitiesactivities (ex: hotels, air/water/rail (ex: hotels, air/water/rail transport)transport)Leads to UNDERESTATEMENT

Pick up Pick up ALL the expendituresALL the expenditures on “Eating on “Eating and Drinking Places” “SHOPPING” for and Drinking Places” “SHOPPING” for tourism economic activitiestourism economic activitiesLeads to OVERSTATEMENT

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Question 1: 4 people go out for lunch (across the street) and order the exactly the same plate (shown). •By looking at the product (food picture), can you tell if it is the tourism commodity?

Question 2: In the photo, middle two are local residents in Ankara, Turkey and two (both sides) are from UNWTO (one from Madrid, one from Orlando Florida). •If the restaurant has no other guests at all for the entire year, what would be the tourism industry ratio of their sales? (*: % of sales attributed to “expenditures” by visitors. )•Visitor: A visitor is a traveler taking a trip to a main destination outside of his/her usual environment, for less than a year, for any main purposes (business, leisure, or other personal purpose) other than to be employed by a resident entity in the country or place visited. Distance criteria?

Visitor Local Local Visitor

Sample: Let’s think about challenges

Buses(23%)Taxis(46%) Restaurants(17%)

Shopping (3%)Airplanes(76%)

Ships(17%)

Auto Rental & Leasing (58%)

Travel Agency(21%)

Amusement (20%)

Sports(32%)

Cinema(18%)

Gas Station (7%)

Hotel (80%)

Tourism Ratio (USA case)

Source: Data based on Bureau of Economic Analysis, Commerce Dept, USA

Introduction to TSA

• “TSA is mainly descriptive in nature and does not include any measurement of the indirect and induced effects of tourist consumption”

–It is NOT a simulation! It is Accounting!• “Estimates should be based on reliable statistical

sources, where visitors and producers of goods and services are both observed.” (TSA-RMF 1.5)

– TSA consists of 10 tables as shown in the next slide.

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1515

Introduction to TSAIntroduction to TSA

““Tourism Commodities”Tourism Commodities” Commodities that are typically purchased by visitors Commodities that are typically purchased by visitors

directly from producers. directly from producers. Tourism CommoditiesTourism Commodities

Hotels, Restaurants, Leisure Activities, transportation etc.

Non-Tourism CommoditiesNon-Tourism CommoditiesGasoline and Oil


4.4 Adjustments with UNWTO regarding redundancies between Tourism Satellite Accounts and Culture Satellite Accounts

Within the United Nations’ system, we have satellite accounts for tourism, called Tourism Satellite Accounts (TSA) for which World Tourism Organization (UNWTO) has been taking leadership over the last two decades. TSA took similar approach to make best use of the existing data from System of National Accounts (SNA), and some accounts in the ISIC had been suggested for inclusion as outputs of tourism commodities. Even though TSA advocates usage of tourism industry ratios, thus avoiding overestimation of the size of outputs of each industrial sector, we notice that there appear to be some redundancies between the product specifications of Culture Satellite Account and Tourism Satellite Account.

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Table 4: Plausible Redundancies of Production Accounts between Tourism and Culture

ISIC Rev.4 List of consumption Products in Tourism Statistics9000 Creative, arts and entertainment activities9102 Museums activities and operation of historical sites and buildings9103 Botanical and zoological gardens and nature reserves activities9311 Operation of sports facilities9321 Activities of amusement parks and theme-parks9200 Gambling and betting activities9329 Other amusement and recreation activities n.e.c.

Source: made by the author based on Annex 3 "List of tourism characteristic activities (tourism industries) and grouping by main categories according to ISIC Rev. 4" International Recommendations for Tourism Statistics 2009


4.5 Proposal for Brainstorming Meetings with Stakeholders and Experienced Statisticians

4.6 Compilation of Official Documents

4.7 Non-Monetary Indicators to be Included

4.8 Overall Strategic Approach – Build on Existing Assets of WisdomThrough desk reviews, we acknowledge that there can be two significant groups which can contribute to the path towards culture satellite account. One group consists of those which have developed culture satellite accounts utilizing prior knowledge of other satellite accounts, mainly tourism, and the other group are those which have been involved in institutionalization of the methodological manual and recently methodological guide for culture satellite account. Spain may belong to both.

As we say “do not invent a wheel”, meaning it is better to make best use of superior existing materials, it would look more efficient that contents of both the Manual and the Guide be disseminated in English to be reviewed by wider audiences, particularly those who were involved in compilation of System of National Accounts and other Satellite Account.

As we reviewed, it is natural that we see minor differences among nations in details of methodology, such as treatments and inclusion of outputs from certain production sectors, namely, education, heritage, sports, design etc.

Mutual acknowledgement of differences would be the first important step and the task would be easier if there are already some sort of rough draft methodology documents to start with.

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In case we still have time….In case we still have time….

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1919

Table 5

Hotels and lodging places

Eating and drinking places Railroad

Local and suburban transit Taxicab

Air Transportation

Water Transp

Auto rental

Arrangement of pass

Recreation

********

All Other Industries

Domestic Production

Hotels and lodging places 55,913 68Eating and drinking places 16,613 220,685 9,710Passenger rail 1,226Passenger Bus 13,158Taxicab 6,614Domestic Airfare 48,449 17International Airfare 22,605Passenger water 4,000Auto and Truck Rental 14,318 59Other Vehicle rental 420******************* All Other Commodities 758 27,595Industry Output 84,243 236,124 33,842 15,878 6,614 87,828 26,681 21,410 13,108 35,800 8,231,223 10,822,647

Intermediate inputs 32,449 124,678 12,934 10,222 2,853 50,188 17,108 10,669 4,781 13,788 3,245,037compensation of employees 32,615 81,265 14,727 13,635 2,258 29,740 4,650 3,733 5,037 10,973 2,936,215indirect business taxes 6,372 14,115 815 111 24 5,629 492 1,621 520 2,249 365,049Other Value added 12,807 16,066 5,366 -8,090 1,479 2,271 4,431 5,387 2,770 8,790 1,684,922Source: quoted by T. Hara from Table 5 U.S. Travel and Tourism Satellite Accounts for 1992. S. Okubo & M. Planting, Survey of Current Business

This part is omitted for presentation purposes


INDUSTRY

CO

MM

OD

ITY

TSA:TSA: How to Read Production TableHow to Read Production Table

Basic Set of Tables in TSA Table 1: Inbound tourism expenditure by products and classes

of visitors Table 2: Domestic tourism expenditure by products, classes of

visitors and types of trips Table 3: Outbound tourism expenditure by products and

classes of visitors Table 4: Internal tourism consumption by products Table 5: Production accounts of tourism industries and other

industries (at basic prices) Table 6: Total domestic supply and internal tourism

consumption (at purchasers' prices) Table 7: Employment in the tourism industries Table 8: Tourism gross fixed capital formation of tourism

industries and other industries Table 9: Tourism collective consumption by products and levels

of government Table 10: Non monetary indicators These are official sequences of TSA tables! (What I cover is US

version, which may not match in their sequences…)

2020

Table 6 is the core of the Tourism Satellite Account system! it is where the confrontation and reconciliation between domestic supply and internal tourism consumption take place. It derives from the supply and use tables of the System of National Accounts 1993.

2121

TSA: How to Read Supply & TSA: How to Read Supply & Consumption Table Consumption Table (Table 6)

Supply and Consumption of Tourism-Supply and Consumption of Tourism-related “Commodities” displayed in one related “Commodities” displayed in one table. table. Left Side of table = Supply (production)

Domestic Production + Imports + OthersDomestic Production + Imports + Others

Right Side of table = ConsumptionIntermediate needs (AX) + Final Demand Intermediate needs (AX) + Final Demand

(household etc) + others(household etc) + others

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TSA: Supply and Consumption Table (Table 6)

Table 6 Supply and Consumption

Domestic Production Imports

Govt sales

change in business inventories

W. margins

R. margins Total Supply Intermediate

Personal Consumption Expenditures

Gross Private domestic fixed investment

Exports of goods and services

Govt expenditures excluding sales

Total Consumption

Hotels and lodging places 56,220 357 56,577 27,260 23,680 5,637 56,577Eating and drinking places 268,148 268,148 32,335 231,193 309 4,311 268,148Passenger rail 1,226 1,226 310 829 87 1,226Passenger Bus 13,158 13,158 2,612 10,455 91 13,158Taxicab 6,614 6,614 3,641 2,586 387 6,614Domestic Airfare 48,466 48,466 21,971 21,308 5,187 48,466International Airfare 22,605 9,808 32,413 3,073 12,377 16,395 568 32,413Passenger water 4,000 301 4,301 0 4,125 176 4,301Auto and Truck Rental 15,094 15,094 10,668 3,234 1,192 15,094Other Vehicle rental 454 454 245 209 454******************* All Other Commodities 7,995,362 121,167 -4,520 412,016 200,614 9,172,221 3,925,205 2,635,574 788,427 508,665 1,314,350 9,172,221Total 10,822,647 631,637 127,076 5,430 671,972 525,843 11,575,930 4,588,742 4,208,718 790,991 602,609 1,384,870 11,575,930Source: quoted by T. Hara from Table 6 U.S. Travel and Tourism Satellite Accounts for 1992. S. Okubo & M. Planting, Survey of Current Business


SUPPLY CONSUMPTION

Supply of the Tourism Commodities

Consumption of the Tourism Commodities

2323

TSA: Tourism Employment & TSA: Tourism Employment & CompensationCompensation (Table 7:USA display)

Table 9 Tourism Employment and Compensation

Total Employment ('000)

Tourism Industry Ratio (M1)

Tourism Employment (M1)

Compensation ($M)

Tourism Compensation ($M)

Average Compensation per tourism employee

Hotels and lodging places 1,661 0.80 1,329 32,615 26,092 19,636Eating and drinking places 6,819 0.16 1,091 81,265 13,002 11,917Railroad and related services 243 0.04 10 14,727 589 60,605Local and suburban transit 416 0.21 87 13,635 2,863 32,776Taxicab 32 0.22 7 1,088 239 34,000Air Transportation 625 0.81 506 29,740 24,089 47,584Water Transportation 100 0.14 14 4,650 651 46,500Auto Leasing w/o drivers 178 0.54 96 3,733 2,016 20,972Arrangement of pass transp. 191 0.22 43 5,037 1,122 26,372Mis amusement and recreation 633 0.18 114 10,973 1,975 17,335*******************Total Tourism Industries 3,749 81,260 21,393Total All other industries 117,998 3,645,042 30,891Tourism Share 3.2% 2.2%Source: quoted by T. Hara from Table 8 U.S. Travel and Tourism Satellite Accounts for 1992. S. Okubo & M. Planting, Survey of Current Business

Session 2: System of Tourism Statistics (STS) 15:00-16:00

► Compilation Guide of Tourism Statistics

●Chapter 1 discusses how the System of Tourism Statistics (STS) has been designed, describing the basic information framework developed to promote the international comparability of tourism statistics, and introduces the importance of institutional aspects for developing a STS.

●Chapter 2 provides a general overview of the demand-oriented conceptual framework of IRTS 2008, and the key concepts in the context of related observation issues.

●Chapter 3 describes issues that arise in measuring visitor flows and in observing their characteristics, the processes that countries can follow in doing so, and the ensuing basic data and indicators.

●Chapter 4 focuses on tourism expenditure, describing the measurement issues, the measurement instruments available, and the ensuing basic expenditure data and indicators.

● Chapter 5 discusses the classifications used in tourism statistics, in particular those related to products and activities.

●Chapter 6 describes the measurement of tourism supply in different forms of accommodation and also briefly discusses tourism supply from transport service providers, food and beverage service providers, and travel and reservation agencies.

●Chapter 7 focuses on employment and describes the concepts, definitions, basic categories and indicators of employment in the tourism industries from both a labour and an industry statistics perspective.

●Chapter 8 covers a number of cross-cutting topics which are relevant to the tourism statistics production process and meeting user needs, including quality management, the compilation of metadata, data dissemination and institutional aspects.24

http://unstats.un.org/unsd/publication/Seriesm/SeriesM_83rev1e.pdf

Compilation Guide:

Sample from Chapter 3

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CG P60

Session 2: System of Tourism Statistics (STS) 15:00-16:00

► Compilation Guide of Tourism Statistics

●Annex 1: Proposed basic questions to measure flows and expenditure associated to inbound tourism.

● Annex 2: Tourism expenditure vs tourism consumption.

● Annex 3: Labour Force Survey Questionnaire of Lithuania.

●Annex 4: Australia: Survey of Employees Earnings and Hours, 2012 - Help Page.

Additional information on compilation issues is provided in four annexes.

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Session 4-308:30-10:00 Session 4-3: Outbound Tourism Statistics

► Outbound Tourism Statistics Presenter: UNWTO•3.150. The points made about the table of results for domestic tourism (see Section D.3) apply as well in the case of outbound tourism.

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Session 4-308:30-10:00 Session 4-3: Outbound Tourism Statistics

► Outbound Tourism Statistics Presenter: UNWTO

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Session 411:15-13:00 Session 4: Tourism Expenditure Statistics

► Inbound and Outbound Tourism Expenditure Statistics

Presenter: UNWTO•Beyond measuring the physical flows of visitors and their characteristics, tourism statistics are especially useful for understanding the economic implications of visitors’ activities. Such measurements allow tourism analysis to be linked with other economic analysis, permitting the integration of tourism policy within a country’s general macroeconomic policy framework. (IRTS 4.1)

•Difference between Tourism Expenditure and Tourism Consumption– Tourism expenditure is the amount paid by visitors for the acquisition of consumption goods and

services, as well as valuables, for own use or to give away, for and during tourism trips (IRTS 2008, 4.2.).

– Tourism consumption comprises tourism expenditure as well as a number of other non-expenditure consumption items which need to be imputed. The main ones are an imputed value of the use of second (holiday) homes and an imputed value of government subsidies to facilities used by visitors (e.g. museums, exhibitions, etc.).

– Tourism consumption is usually only required for purposes of constructing a TSA. However, tourism expenditure, collected by way of visitor surveys, is an important basic piece of visitor information which is useful for a variety of purposes, such as marketing and policy development. (4.3)

– It is also worth noting that data on tourism expenditure (and ultimately consumption) is particularly important as it is the means by which tourism demand and tourism supply are matched. This match, by way of a TSA, enables measurement of tourism’s contribution to an economy. (4.4)

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► Inbound and Outbound Tourism Expenditure Statistics•Classification of tourism expenditure

– The IRTS 2008 thus recommends using a classification that allows visitors to group their expenditure according to purpose: the Classification of Individual Consumption by Purpose (COICOP). This classification is commonly used for the description of personal consumption in general statistics and household surveys, and has the primary advantage that it can be linked to the CPC (which, in turn, enables links to supply-side classifications, see Chapter 5).

– The categories that are most commonly used and recommended in IRTS 2008 are: (4.49)

• i. Package travel, package holidays and package tours• ii. Accommodation• iii. Food and drink• iv. Local transport• v. International transport• vi. Recreation, culture and sporting activities• vii. Shopping• viii. Others

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► Inbound and Outbound Tourism Expenditure Statistics•Measuring inbound tourism expenditure (4.53)

– The most common and rigorous method of observing expenditure by non-resident visitors is to survey them as they leave the country (see Chapter 3, Section C.2.2.1). The following methods are used to observe inbound tourism expenditure. It should be noted that the following discussions on border surveys, surveys at accommodation or tourism sites, or the use of electronic prints contain elements of relevance to also the measurement of domestic and outbound tourism expenditure.

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► Inbound and Outbound Tourism Expenditure Statistics•Measuring outbound tourism expenditure (4.72).

– As mentioned in connection with the measurement of visitor flows (Chapter 3), outbound tourism expenditure can be measured at or near the border as outbound visitors return from their trip or, as in the case of domestic tourism expenditure, through the use of household-type surveys.

– Under certain conditions, the measurements of a country’s outbound tourism expenditure obtained through a household-type survey can be used directly or as an input for the measurement of inbound tourism expenditure in the countries visited. This is often referred to as the use of mirror statistics (see Chapter 3, Section C.2.2.4).

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[Advanced Topic]•Tourism expenditure classified in the National Accounts as intermediate consumption

– SNA2008 all purchases of goods and services by employees on business trips = should be classified as intermediate consumption

– IRTS2008making no distinction between the macroeconomic concepts of “intermediate consumption” and “final consumption”, as long as the direct beneficiary of the expenditure is the visitor (IRTS 2008, 4.5.)

• Regarding inbound and outbound tourism expenditure, and because some countries still do not compile tourism data, UNWTO uses data from the Balance of Payments rather than tourism data to support as much as possible international comparisons. However useful in this sense, Balance of Payments data should not be used in the overall tabulation of tourism statistics and should never be considered a substitute for tourism statistics. It is expected that, in time and as countries develop their Systems of Tourism Statistics, it will become possible to collect the countries’ actual inbound and outbound tourism expenditure data. 35

Session 4-508:30-10:00 Session 4-5: Tourism Industries Statistics

► Measuring the Supply of Tourism Industries

Presenter: UNWTO•Tourism is defined as an economic activity that is determined principally by demand (IRTS2008, 1.12.). In describing and measuring tourism, however, supply (economic activity in response to demand) must also be considered, since without it, the economic effect of tourism could not be stated or described. Indeed, one of the major contributions of the IRTS 2008 is the fact that it describes tourism not only from the demand side (i.e. visitors) but also from the supply side (i.e. the industries that cater to visitors), thereby acknowledging tourism as an economic sector. (IRTS 6.1)•Additionally, to properly integrate the analysis of tourism into that of the total economy, it must be ensured that what is measured on the supply side is consistent with what is measured on the demand side.

– Such consistency enables comparison of data over time, as well as comparison with other countries’ data.

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Presenter: UNWTO•Tourism statisticians should be aware of an issue that bears on the credibility of the tourism industries’ basic data and indicators (see “Tables of results”, paragraphs 6.21 to 6.23) and that National Tourism Administrations (NTAs), National Statistical Offices (NSOs) and other government agencies that publish tourism data should warn users about: only part of the output of each tourism industry is attributable to visitors’ consumption. This issue is explicitly identified and treated in the TSA by the use of “tourism shares” (or “tourism ratios”) within their total output (TSA:RMF 2008, 4.50. and 4.55.).•It should also be recalled that visitors acquire goods and services that are not tourism-specific (newspapers, clothes, medical care30, cleaning, hairdressing, etc.), so that studying tourism characteristic activities does not cover all possible acquisitions by visitors (IRTS 2008, 4.4.).

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Presenter: UNWTO•Information on industries, their output, inputs, and employment is gathered mainly through surveys, which NSOs usually conduct on a yearly basis, covering all economic activities. The economic data thus collected is usually required for calculating the country’s National Accounts, for example calculating Gross Domestic Product, Gross Value Added, etc.(6.12)

•These surveys are currently well established and have a standardized format, based on the International Standard Industrial Classification of All Economic Activities (ISIC) categories (agriculture, mining, manufacture, etc.).(6.13)

– Accommodation providers, for instance, often include in the bill various items beyond the product actually purchased (e.g. a head count, a sales tax or VAT as a percentage of total consumption, and a proportional compulsory service charge), and visitors may also choose to add tips. All these payments count as part of the value of consumption, but providers usually do not include them as income in their financial statements, treating them as income received on behalf of others. Taxes and head counts, for example, are collected for governments (local or central); service charges and tips usually go to workers, as employee compensation. In measuring supply, taxes on the product will need to be excluded but tips and service charges will have to be included, as part of value added and remuneration of employees.

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Session 608:30-10:00 Session 4-5: Tourism Industries Statistics

39


Indicators: Accommodations•Besides the usual economic variables (output, value added, employment, consumption, investment), which are common to most economic activities, various other indicators have been developed over the years and are frequently used to assess the performance of accommodation establishments and of tourism policy:

– Room occupancy rates (gross or net)– Bed-place occupancy rates (gross or net)– Average number of persons per room– Average room rate– Average revenue per room night– Average revenue per guest night– (Average) revenue per available room (REVPAR)– Employees per room– Average wage per employee– Revenue per employee

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Session 4-608:30-10:00 Session 4-6: TSA Supply and ConsumptionA.Introduction

•[TSA 4.31 P 37)] Table 6 presents an overall reconciliation of internal tourism consumption with domestic supply. This table is the core of the TSA. •Without compilation (of table 6), even with partial data, the term Tourism Satellite Account applied to the compilation of some of the tables would be misleading. •Tourism direct gross value added (TDGVA) and tourism direct gross domestic product (TDGDP) (paras. 4.88 to 4.94) used as indicators of the direct contribution of tourism to total value added or total GDP, can be derived from this table.

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Session 4-6

42

p60 p61

Session 4-6

43

4.51. The share of internal tourism consumption in each component of supply will be established separately for each of them. This is the purpose of the additional column, Tourism share, associated with each of the columns of the two first blocks of the table.

4.52. In these two first blocks, the values of tourism share should be expressed in value levels and can be established in the following way:

• From direct information coming from producers and suppliers (information on their categories of customers and their corresponding market share);• From visitors themselves (sample surveys of expenditure by product and indication of providers); • From opinions of experts in the field of tourism behavior provided these opinions can be validated through best practices (judgmental procedure)

4.55. It is possible, for each industry, to establish the tourism share of output (in value) as the sum of the tourism share corresponding to each product component of its output.

4.56. Then, it is possible to establish, for each industry, a tourism ratio (ratio between the total value of tourism share and total value of output of the industry expressed in percentage form) to be applied to the components of intermediate consumption (and thus to value added).

4.61. The more refined and accurate the assumptions on how tourism consumption affects each industry, the more precise the measurement.

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Session 4-608:30-10:00 Session 4-6: TSA Supply and Consumption

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4.48. The rows of table 6 are identical to those of table 5. Regarding columns, there are three blocks:• The first block corresponds to the same columns as those of table 5 and represents industries (columns 1 to 15);• The second block (imports, taxes less subsidies and trade and transport margins) presents the additional variables and value adjustments that are needed to obtain domestic supply at purchasers’ prices (column 6.4);• The third block is made of only two columns: internal tourism consumption (column 4.3) and tourism ratio (column 6.5). 4.49. The supply by domestic producers is first added over industries to obtain the aggregate value of total output of domestic producers at basic prices. Then, this column (which also corresponds to the total of table 5 column (5.15) is added to the following column, headed Imports (column (6.1)), which represents supply within the domestic economy of imported goods and services (besides imported goods, what concerns tourism refers to transport services within the domestic economy provided by non-resident producers, as well as insurance services or any other service provided by non-residents and purchased on the Internet), to a column recording the value of taxes less subsidies on products concerning domestic output and imports column (6.2), and a last column representing trade and transport margins column (6.3), in order to obtain the column headed Domestic supply at purchasers’ price column (6.4). This presentation is similar in essence to that followed in the System of National Accounts 2008 to determine the supply and use tables. This constitutes the second block.

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4.50. The final column, Tourism ratio (in percentage), allows for the estimate of the two main aggregates: TDGVA and TDGDP. The following paragraphs explain how these ratios are derived and its application for measuring tourism direct economic contribution in the economy of reference (para. 4.88).4.51. The share of internal tourism consumption in each component of supply will be established separately for each of them. This is the purpose of the additional column, Tourism share, associated with each of the columns of the two first blocks of the table.


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4.50. The final column, Tourism ratio (in percentage), allows for the estimate of the two main aggregates: TDGVA and TDGDP. The following paragraphs explain how these ratios are derived and its application for measuring tourism direct economic contribution in the economy of reference (para. 4.88).

4.51. The share of internal tourism consumption in each component of supply will be established separately for each of them. This is the purpose of the additional column, Tourism share, associated with each of the columns of the two first blocks of the table.

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TSA: Supply and Consumption Table (Table 6: Image)

Table 6 Supply and Consumption

Domestic Production Imports

Govt sales

change in business inventories

W. margins

R. margins Total Supply Intermediate

Personal Consumption Expenditures

Gross Private domestic fixed investment

Exports of goods and services

Govt expenditures excluding sales

Total Consumption

Hotels and lodging places 56,220 357 56,577 27,260 23,680 5,637 56,577Eating and drinking places 268,148 268,148 32,335 231,193 309 4,311 268,148Passenger rail 1,226 1,226 310 829 87 1,226Passenger Bus 13,158 13,158 2,612 10,455 91 13,158Taxicab 6,614 6,614 3,641 2,586 387 6,614Domestic Airfare 48,466 48,466 21,971 21,308 5,187 48,466International Airfare 22,605 9,808 32,413 3,073 12,377 16,395 568 32,413Passenger water 4,000 301 4,301 0 4,125 176 4,301Auto and Truck Rental 15,094 15,094 10,668 3,234 1,192 15,094Other Vehicle rental 454 454 245 209 454******************* All Other Commodities 7,995,362 121,167 -4,520 412,016 200,614 9,172,221 3,925,205 2,635,574 788,427 508,665 1,314,350 9,172,221Total 10,822,647 631,637 127,076 5,430 671,972 525,843 11,575,930 4,588,742 4,208,718 790,991 602,609 1,384,870 11,575,930Source: quoted by T. Hara from Table 6 U.S. Travel and Tourism Satellite Accounts for 1992. S. Okubo & M. Planting, Survey of Current Business


SUPPLY CONSUMPTION

Supply of the Tourism Commodities

Consumption of the Tourism Commodities

Session 7: Why TSA?

• “TSA is the authoritative source of the direct contributions of tourism demand to national economies. As such, it has been a groundbreaking development for understanding tourism as an economic activity in the same terms that, for example, manufacturing or agriculture are understood. However, as it is an economic account, the TSA is not designed to generate all of the economic impact variables that policy-makers may need.”

– Frechtling, D (2013)

• Without good accounting (data has been directly observed), no simulations or modeling techniques can substitute inaccuracy of the basic data on tourism as an industry.

• As we view TSA tables, tables depends on good tourism statistics.

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• Table 14.36 Table 1 to 3 describe the most

important component of tourism consumption: namely tourism expenditure, which includes not only what visitors pay for out of their own budget or pocket, but also what producers (businesses, governments and non-profit institutions serving households (NPISH)) or others spend for their benefit (transportation, accommodation, etc.), on which visitors are usually able to report fairly well. Tourism expenditure excludes social transfers in kind, except when they correspond to refunds of expenditure made initially by the visitor (as in the case of some health services) as well as expenditure, actual or imputed, associated with all types of vacation home ownership.

4.37. Table 1 focuses on inbound tourism, table 2 on domestic tourism and table 3 on outbound tourism, by products and classes of visitors.

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Day 3: Session 7

Table 2_2nd part 4.37. Table 1 focuses on inbound tourism, table 2 on domestic tourism and table 3 on outbound tourism, by products and classes of visitors.

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Day 3: Session 7

Table 2 4.37. Table 1 focuses on inbound tourism, table 2 on domestic tourism and table 3 on outbound tourism, by products and classes of visitors.

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Day 3: Session 7

Table 3 4.37. Table 1 focuses on inbound tourism, table 2 on domestic tourism and table 3 on outbound tourism, by products and classes of visitors.

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Day 3: Session 7

Table 4 4.29 Table 4 leads to the estimation of total internal tourism consumption by summing domestic and inbound tourism expenditure (from tables 1 and 2) and all additional components that have to be taken into consideration to obtain internal tourism consumption (para. 4.15) since

these adjustments are not easily attributable to the different forms of tourism. The key aggregate derived from table 4 is internal tourism consumption, which will be compared to domestic supply (globally and by product) in table 6.

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Day 3: Session 7

Table 5 4.30. Table 5 is the supply table, which, though focusing on tourism characteristic products and tourism industries, includes (in rows) all products that circulate in the economy of reference as well as all industries (in columns). Its scope is similar to that of the production accounts in the national accounts, although classifications and some treatments are different. The column other industries shows the aggregated value of supply corresponding to all industries other than tourism industries in the economy.

The format requires at a minimum the use of the categories of products and industries that have been recommended in chapter 3. Countries are encouraged to use a more detailed breakdown as needed in order to improve the relevance of these data.

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Day 3: Session 7

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Table 7 - 4.32. Table 7 presents employment in the tourism industries; it is includedbecause of the frequent strategic importance of tourism in the development of anemployment policy.

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Table 7 _ 2nd part - 4.32. Table 7 presents employment in the tourism industries; it is included because of the frequent strategic importance of tourism in the development of an employment policy.

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Table 8 - 4.33. As noted above (para. 4.6), the compilation of tables 8 and 9, concerningtourism gross fixed capital formation and tourism collective consumption, is accordeda lower priority.

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Table 8 - 4.33. As noted above (para. 4.6), the compilation of tables 8 and 9, concerningtourism gross fixed capital formation and tourism collective consumption, is accorded a lower priority.

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Day 3: Session 7Table 9 - 4.33. As noted above (para. 4.6), the compilation of tables 8 and 9, concerningtourism gross fixed capital formation and tourism collective consumption, is accorded a lower priority.

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Day 3: Session 7Table 10 - 4.34. Table 10 presents a limited number of non-monetary indicators that are required to assist the estimation and support the interpretation of the information presented in tables 1 to 7. Countries are encouraged to develop more indicators of this type, according to their needs, using the information on characteristics of visitors and tourism industries as recommended in International Recommendations for Tourism Statistics 2008

4.77. The System of National Accounts 2008 states explicitly that physical indicators are an important component of satellite accounts and therefore they should not be viewed as secondary items of the Tourism Satellite Account (see SNA 2008, para. 29.84). However, further work will be required to improve the link between the provisional list of non-monetary indicators and the monetary tables. The data contained in this table will assist in the use of non-monetary indicators as a key element in tourism analysis.

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Day 3: Session 7Table 10 - 4.34. Table 10 presents a limited number of non-monetary indicators that are required to assist the estimation and support the interpretation of the information presented in tables 1 to 7. Countries are encouraged to develop more indicators of this type, according to their needs, using the information on characteristics of visitors and tourism industries as recommended in International Recommendations for Tourism Statistics 2008

4.77. The System of National Accounts 2008 states explicitly that physical indicators are an important component of satellite accounts and therefore they should not be viewed as secondary items of the Tourism Satellite Account (see SNA 2008, para. 29.84). However, further work will be required to improve the link between the provisional list of non-monetary indicators and the monetary tables. The data contained in this table will assist in the use of non-monetary indicators as a key element in tourism analysis.

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Session 8: Overview11:00-12:30 Session 8: TSA Data Collection – Tourism Statistics

1.Importance of institutional arrangements in developing a System of Tourism Statistics (STS)1.30. That the statistical process resulting in official tourism statistics requires participation of many

stakeholders, is owing not least to the interdisciplinary character of tourism. The successful

development of a System of Tourism Statistics (STS) is based on a culture of collaboration among

stakeholders, who pool their financial, human and technical resources, knowledge and interests

with a view to creating a common data set. All institutions that are associated with tourism

statistics, either as provider of information or as user, should be committed to actively participating

in a coordinated manner in the development of the STS. The present section provides an

overview of the governance related implications of developing a System of Tourism Statistics (see

chap. VIII, sect. D).

1.31. For many of these institutions, participation in the process of producing tourism statistics may not

rank high on their list or priorities. Therefore, establishing a set of agreements on the division of

responsibilities among the institutions that might be instrumental from the compilation of tourism

statistics and the TSA, is absolutely essential (see IRTS 2008, chap. 9, sect. D for a brief

discussion on the issue of inter-agency cooperation). Such agreements are now generally referred

to by the Statistical Commission as institutional arrangements, which are very much related to the

Inter-institutional Platform that UNWTO has traditionally recommended in its technical assistance

and capacity-building initiatives.

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Session 8: Overview11:00-12:30 Session 8: TSA Data Collection – Tourism Statistics

1.Importance of institutional arrangements in developing a System of Tourism Statistics (STS)1.30. The proper environment for the development of a STS should be provided by a proactive and

synergetic Inter-institutional Platform involving various categories of institutions:

(a) Bodies that produce statistics and basic tourism information:

(i) National Statistical Offices, as producers of basic statistics and compilers of National Accounts;

(ii) National Tourism Administrations, as the entities responsible for public policy on tourism and for the coordination of public and private stakeholders;

(iii) Central banks, which often compile the balance of payments;

(iv) Immigration and border protection authorities, as they are responsible for border procedures;

(v) Associations of national tourism enterprises, as they often provide information and are key users of tourism statistics;

(b) Users (or potential users) of the information, such as:

(i) Tourism industries representatives and other private sector entities;

(ii) Universities and centres for research on tourism.

Depending on country circumstances, the involvement of customs administrations, ministries of

trade and economy, and ministries of finance and tax authorities, among others, may be

significant as well.

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Quick & Easy Introduction to "Input-Output Model" for Tourism Industry Analysis

AG MNF Serv FDTotal Output

Agriculture1 Manufacturing

ServicesValue AddedTotal Input

AG MNF Serv FDTotal Output

Agriculture 1 2 1 6 102 Manufacturing 1 3 2 4 10

Services 2 2 4 12 20Value Added 6 3 13Total Input 10 10 20

AG MNF ServAgriculture 1 2 1

3 Manufacturing 1 3 2Services 2 2 4Value Added 6 3 13Total Input 10 10 20

Standardized AG MNF ServAgriculture 0.1 0.2 0.05Manufacturing 0.1 0.3 0.1

4 Services 0.2 0.2 0.2Value Added 0.6 0.3 0.65Total Input 10 10 20

1. This is the basic structure of I-O. At upper-left, you have 3 x 3 inter-industry matrix.

2. We fill in the data based on the macro-economic data. Often the statistics office of the regional/ state/ national government publish these data, even the I-O itself.

3. Here, we pick up the whole column under industry columns. Now you see 3 x 3 inter-industry matrix, and below it, Value-added (labor,capital & others) and the Total Input. At this stage, you may forget about Value Added. (We will study them when we move to SAM)

4. Here, look at the table above. You take each entry within the inter-industry matrix and divide them by the column sum. Repeat for all cells in the inter-industry matrix Then the calculation will look like this.

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Standardized AG MNF ServAgriculture 0.1 0.2 0.05 =A-Matrix

5 Manufacturing 0.1 0.3 0.1Services 0.2 0.2 0.2

I-Matrix AG MNF Serv6 Agriculture 1 0 0 =I-matrix

Manufacturing 0 1 0Services 0 0 1

(I-A) AG MNF Serv7 Agriculture 0.9 -0.2 -0.1 =(I-A)

Manufacturing -0.1 0.7 -0.1Services -0.2 -0.2 0.8

5. Take out the Inter-Industry matrix. This is called "A-matrix". You are now ready to start your magic step by step!

6. This matrix, with all zeros except along the upper-left~lower-right diagonal line with 1s, is called "I-matrix" (sounds "eye"-matrix). Do not worry, this matrix has the same role as 1 (one) in normal algebra.

7. Follow the formula and let's work on (I-A). Simply subtract A-matrix from our newly created I-matrix.

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(I-A) -̂1 AG MNF Serv8 Agriculture 1.18 0.37 0.12 =(I-A) -̂1

Manufacturing 0.22 1.55 0.21Services 0.35 0.48 1.33

(I-A) -̂1 AG MNF Serv9 Agriculture 1.18 0.37 0.12 Case 1 1 1.18

Manufacturing 0.22 1.55 0.21 delta Y= 0 delta X= 0.22Services 0.35 0.48 1.33 0 0.35

1.75Case 2 0 0.37delta Y= 1 delta X= 1.55

0 0.482.40

Case 3 0 0.12delta Y= 0 delta X= 0.21

1 1.331.66

"for the development of the input-output method and for its application to important economic problems."

Leontief Inverse!

"So, what is this stuff? How can it be useful?"

WASSILY LEONTIEF 1973 Nobel Laureate in Economics

8. This is the most challenging part. We will have a help from Excel. (1) Hightlight all the nine cells in the target matrix (where you want to write result of calculation, in our example, yellow ones)(2) Type "=MINVERSE()" and put the cursol within the (). (3) Then, choose the 3 x 3 original matrix as an array. (in our exmaple, pink ones)(4) IMPORTANT TO FOLLOW: While Hold down both Chift & Control Keys, hit the Enter key. This is the Inverse matrix! Now you see the fascinations for industry analysis.

Made by T. Hara 2010

ProductionActivities

(I-O table)

INSTITUTIONSINSTITUTIONS(Household, firms,

Government)

FACTORSFACTORS(of production: labor, capital)

$$ Wage &rentsValue Added= Labor & capital

Final demands:Goods and Services

$$ Labor Income, profits

$$ for Consumption

SAM SAM ConceptConcept

Placement of Endowments

(labor and capital)

Compiled by T. Hara 2004, 2010

Structure of a Social Accounting Matrix (HA449/HA649 Tourism Industry Analysis by T. Hara) (Made by and with copyright of Dr. Iwan Aziz, Professor, City and Regional Planning, Cornell University. Lines added by T. Hara)

Expenditures 1 2 3 4 5 6 7 Incomes

a Factors

b a

Institutions b

c

Activities Commodities Labor Capital Households Firms Government Capital Account

Rest of World

Total

1 Activities Domestic Sales

Export subsidies

Exports Production

2 Commodities Intermediate demand

Households consumption

Government Investment

consumption

Investment Domestic demand

3 Factors Wages a. Labor Factor

incomes from abroad

Gross national product at factor cost

b. Capital Rent 4 Institutions a. Households Labor

income Distributed profits Intrahousehold

transfers Transfers Transfers Transfers Households

income b. Firms Non-distributed

profits Transfers Transfers from Firms

income c. Government Value-added

taxes Tariffs Ind. Taxes

Taxes Social sec.

Taxes on profits Direct taxes Taxes abroad Government income

5 Capital Account Household savings

Firms savings

Government savings

Capital transfers

Total savings

6 Rest of World Imports Factor payments

Current transfers abroad

Imports

7 Total Production Domestic Supply

Factor outlay Households expenditures

Firms expenditures

Government expenditures

Total investment

Foreign exchange earnings

We can identify those transactions that are mainly estimated through survey instruments, i.e. Household Consumption (T2.4a), Interhousehold Transfers (T4a.4a), Labor Income (T4a.3a); Distributed Profits (T4a.3b); Wages (T3a.1); and Rent (T3b.1). Often, in the absence of any reliable independent estimates and also for the sake of consistency some transactions are clearly determined residually as would be the case for Household Savings (T5.4a), for example.

A Typical Social Accounting Matrix Structure

Thank you very much. Tad [email protected] (e-mail) http://hospitality.ucf.edu/person/dr-tadayuki-hara/ (web)

mailto:[email protected]

http://hospitality.ucf.edu/person/dr-tadayuki-hara/