CTO/CRSTDP Statistics WCTO/CRSTDP Statistics Workshop 2005orkshop 2005
USE OF TOURISM USE OF TOURISM STATISTICS IN MACRO-STATISTICS IN MACRO-ECONOMIC & BUSINESS ECONOMIC & BUSINESS
PLANNINGPLANNING
By McHale ANDREWBy McHale ANDREWCRSTDP/CTO Research AdviserCRSTDP/CTO Research Adviser
CTO/CRSTDP Statistics WCTO/CRSTDP Statistics Workshop 2005orkshop 2005
1. Introduction1. Introduction
• "There are three kinds of lies: lies, damned lies and statistics."
Benjamin Disraeli
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Why Statistics ?Why Statistics ?
• "The objective of a national statistical system is
to provide relevant, comprehensive, accurate and objective statistical information. Generally, statistics are invaluable for monitoring the country’s economic and social conditions, the planning and evaluation of government and private sector programmes and investment, policy debates and advocacy, and the creation and maintenance of an informed public."
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Why Statistics ? Cont’dWhy Statistics ? Cont’d
Essential in:
• Official decision-making, policy formulation
• Policy Analysis & Research
• Academic, business, industrial & other research
• Business planning & CRM
• Citizens/residents being informed about performance of governments
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Why Statistics ?Why Statistics ?
• Facilitate comparison across countries/regions• Benchmarking• ‘Best Practices’• Evaluation of performance
However, good statistics must be collected in accordance with agreed international standards using appropriate methods for data collection, processing and dissemination.
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Key Tourism StatisticsKey Tourism Statistics
• Visitor Arrival figures
• Tourism expenditure estimates
• Visitor Surveys (expenditure,motivation,satisfaction etc.)
• Accommodation and Tourism Establishment Surveys
• Tourism Satellite Account (TSA)
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2. Importance of Statistics in 2. Importance of Statistics in Tourism Sector DevelopmentTourism Sector Development
YEAR INT’L TOURIST ARRIVALS (millions)
EXPENDITURE (US$ billions)
2000 698 475
2001 684 463
2002 703 480
2003 691 523
2004 763 622
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Economic Importance of Tourism in Economic Importance of Tourism in the CTO Caribbeanthe CTO Caribbean
YearC’BEAN (CTO) TOURIST
ARRIVALS (millions) EXPENDITURE (US$ billions)
2000 20.3 19.9
2001 19.5 19.5
2002 19.0 18.9
2003 20.4 19.1
2004 21.7 20.8 (provisional estimate)
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Economic Importance of Tourism in Economic Importance of Tourism in the CTO Caribbeanthe CTO Caribbean
• With < 1% of world Pop > 3% of arrivals
• Significant re: GDP, FX, Emp. ,business creation
• Increases daily market size
• Backward/forward sectoral linkages
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Economic Importance of Tourism in Economic Importance of Tourism in the CTO Caribbeanthe CTO Caribbean
Therefore tourist population must be factored in when planning for:
• total effective demand• social, economic and business services• infrastructural development• domestic and international transportation• investment• national sales and marketing programmes• spatial planning, carrying capacity etc.
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Typical tourism experience in Typical tourism experience in regional destination can involve:regional destination can involve:
• A vast number of direct and indirect services transactions across many economic sectors involving transactions with:
- airlines, hotels, guesthouses or private villas
- car rental companies
- public utility services
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Typical tourism experience in Typical tourism experience in regional destination can involve:regional destination can involve:
- water sports companies, golf clubs- destination management companies - yacht charter companies, marine transport
companies - Entertainers- restaurants, retail outlets, local taxis, tour
guides- telecommunications companies and casinos,
etc.
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Tourism Measurement LimitationsTourism Measurement Limitations
• In Caribbean absence of a reliable, thorough and internationally uniform statistical database from which one could measure the full economic impact of tourism
• Simple analyses of arrivals, estimates of expenditure (VEMS)
• No in-depth analysis of Tourism economic impact
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Tourism Satellite AccountTourism Satellite Account
Overview:• UN SNA ’93 recommended TSA• WTO describes the TSA as the "only way to have an
overall view of tourism's impact on the economy on an equal footing with all other sectors."
• Enhance ability to accurately capture economic impact of previously undefined “sectors”
• Analytical work done within existing national accounting systems
• More flexible• Not overburdening CSNA
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Tourism Satellite AccountTourism Satellite Account
Uses:• Provide credible data on the impact of tourism and related
employment• Serve as a standard framework for organizing statistical data on
tourism• Become a new internationally accepted national accounting standard
endorsed by the UN Statistical Commission• Function as a powerful instrument for designing economic policies
related to tourism development• Measure tourism’s contribution to GDP and its ranking in relation to
other economic sectors• Provide data on tourism’s impact on a country’s Balance Of Payments• Provide information on tourism human resource characteristics• Measure the level of investment in tourism• Evaluate tax revenues generated by tourism industries• Measure the level of tourism’s consumption of other goods and
services
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Tourism Satellite AccountTourism Satellite Account
Benefits:• Reconciliation of the demand-side data with the
supply-side data within the account brings greater coherence to the definition of the industry; all partners in the industry will speak a common language.
• Use of a recognized accounting system brings enhanced credibility to the economic analysis of the industry.
• Use of an accounting framework can bring other important information into the analysis of tourism, such as data on value-added benefits of tourism, tourism share of GDP, government revenues, human resources development or financial flows.
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Using Surveys to Assess Visitor Using Surveys to Assess Visitor Expenditure & Motivation,Expenditure & Motivation, etc. etc.
Uses of Tourism Surveys:
1. demand side (visitor satisfaction, motivation, expenditure etc.)
2. supply side (quality and standards of tourism establishments, employment, attitudes of residents etc.)
3. Travel patterns and expenditure of regional and international visitors
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Using Surveys to Assess Visitor Using Surveys to Assess Visitor Expenditure & Motivation,Expenditure & Motivation, etc. etc.
Uses of Tourism Surveys cont’d:4.CRM/Visitor comment & feedback5. Evaluation of tourism promotion programmesInformation collected from surveys used to :• customize policies and strategies • redress any supply problems• enhance the tourism product • provide more competitive and attractive
destination or experience for the visitor.
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Formula for determining Return on Formula for determining Return on Investment from specific spendingInvestment from specific spending
• E.g. Tourism Advertising campaign
ROI Formula:• Inquiries * Conversion rate * length of stay *
party size * Avg. spending = Total expenditure• Total Advertising costs = (Costs of
advertisement placement/prod. + website development)
ROI = Total Spending/Advertising costs
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E.g. Tourism Advertising E.g. Tourism Advertising campaigncampaign
• Inquiries = brochures + website visits • In this example inquiries = 40,000 brochures+ 15,000
website visits = 55,000 inquiries• Conversion rate is 25% [gross conversion (# people who
came, e.g. 60%) and net conversion (# people who came because of advertising, e.g. 25 %)
• Average length of stay is 6 days• Average party size is 2.6 people• Average daily expenditure is $100• Total Advertising costs = $100,000 (advertisement
placement & production)+ $10000 (website development costs) = 110,000
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E.g. Tourism Advertising E.g. Tourism Advertising campaigncampaign
• Total Spending = 55,000*25%*6 days*2.6 people* $50 per day = $10,725,000
• Therefore Net ROI is: 9,750,000/110,000 = 97.5
• For every advertising dollar spent, the return to the country was $97.50 in traveler spending.
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3. Tourism Statistics in Macro-3. Tourism Statistics in Macro-Economic PlanningEconomic Planning
• Accurate statistics fundamental to good economic planning !
• Planners use statistical databases, spreadsheets and modern analytical techniques to prepare reports and recommendations for governments etc.
• Analytical techniques utilized to project program costs and forecast future trends in aggregate demand (GDP), employment, housing, investment, taxation, transportation and population
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Tourism Statistics in Macro-Tourism Statistics in Macro-Economic Planning cont’dEconomic Planning cont’d
Reliable and timely tourism statistics:
• crucial to projections & forecasting
• vital to better planning of tourism sector and to justify its expansion
• long-term and short-term plans for optimal land use
• decisions on trade-offs between competing uses re: growth maximization
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Tourism Statistics in Macro-Tourism Statistics in Macro-Economic Planning cont’dEconomic Planning cont’d
Reliable and timely tourism statistics necessary for rationalizing:
• economic, political and social needs
• traffic congestion, air, water and soil pollution
• effects of growth and change on community vs potential benefits from tourism development
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Tourism Statistics in Macro-Tourism Statistics in Macro-Economic Planning cont’dEconomic Planning cont’d
• necessary to have reliable data on trends and projections in key sectors, including the tourism sector
• not making best use of community’s land and resources can be counterproductive to the particular development
• crucial to policy framework formulation• informed decision-making by both public and
private sectors at international, regional, national and local levels
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Policy formulation involves:Policy formulation involves:
• Defining the objectives of tourism development.
• Setting growth targets for tourism.
• Determining the type of tourism to be attracted.
• Defining public and private responsibilities.
• Minimizing deleterious effects of tourism
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Economic ImpactsEconomic Impacts
1. Direct (first round)
2. Indirect (upstream)
3. Induced (tourism $ in Dom Y)
4. Negative (leakages)
5. Positive (government revenues , externalities ,multiplier effect)
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4. Tourism Statistics in Business 4. Tourism Statistics in Business Planning & Investment DecisionsPlanning & Investment Decisions
• Rapid growth of tourism necessitate more focused and informed planning and investment decisions by tourism business
• Given massive investments and lender/shareholder demands tourism growth projections must be rigorous and as accurate as possible
• [e.g. in Turtle territory]
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Business planning:Business planning:
• involves anticipating and controlling change to maximize benefits of tourism
• requires enterprises to rely on statistics for research, planning & design of marketing programs
• needs reliable data for financial projections
• demands industry and sector performance statistics for comparative analyses
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Investors Investors
Rely on tourism statistics for:• decision-making and financing proposals• evaluating performance/justifying investments• monitoring implementation of government
policies• building partnerships with airlines, governments
etc.• benchmarking performance of host country vs
competing destinations• policy advocacy in trade associations
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Accommodation SurveysAccommodation Surveys
• Commercial Accommodation Classification Survey in New Zealand
* Survey data recorded using particular groupings (classifications) and terms.
• Classifications Survey provides information on groupings
used Commercial Accommodation Survey Includes geographical, establishment and
employee type classifications.
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Classifications cont’dClassifications cont’d
1. Geographical classifications
- Origin of guests
- Origin of establishments
2. Establishment classifications
- Type of establishment
- Eligibility for survey
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Establishment ClassificationsEstablishment Classifications
• Establishments included in Classifications• Hotels
11 Hotels12 Resorts
• Motels21 Motor inns22 Motels and self catering accommodation
• Hosted31 Private Hotels32 Guest Houses33 Bed and Breakfast34 Holiday farm (Host farm, Farm Stay) accommodation
• Backpackers / Hostels41 Backpackers / Hostels
• Caravan Parks / Campgrounds51 Caravan Parks52 Camping Grounds
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Establishment ClassificationsEstablishment Classifications
• Establishments Not Included in Classifications• Hospital • Prison • Work Camp • Nursing Home • School Hostel • University Hostel • Time shares (when used by owners) • School Lodge • Church Lodge • Trains • Ferries• Planes Cribs Refuge/Emergency Shelter Night Shelter
Serviced Apartments Chartered Boats House Swap Outward Bound
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Other ClassificationsOther Classifications
• Employee Type Classifications
- Numbers who usually work full-time (30 hours or more a week)
- Numbers who usually work part-time (less than 30 hours a week)
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Key areas covered in SurveyKey areas covered in Survey
• Average length of stay• Business frame• Employment• Enterprise• Establishments (type & number)• Geographic (activity) unit• Guest arrivals (first nights & guest nights)• Residence of guests• Occupancy rates• Capacity (stay unit night)• Turnover (gross income from sales)
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ConclusionConclusion
• Tourism statistics crucial to macro-economic and business planning
• Tourist arrivals, length of stay and estimates of expenditure insufficient
• Technological advances make possible rigorous data analysis in quick time
• Both businesses & governments need to upgrade tourism statistical systems to better compete
• TSA welcome but needs to measure profitability• Best practices must be emulated
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