USE OF TOURISM STATISTICS IN MACRO-

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CTO/CRSTDP Statistics
Workshop 2005

USE OF TOURISM
STATISTICS IN MACRO
-
ECONOMIC & BUSINESS
PLANNING




By McHale ANDREW

CRSTDP/CTO Research Adviser





CTO/CRSTDP Statistics
Workshop 2005

1. Introduction


"There are three kinds of lies: lies,
damned lies and statistics
."




Benjamin Disraeli

CTO/CRSTDP Statistics
Workshop 2005

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."

CTO/CRSTDP Statistics
Workshop 2005

Why 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




CTO/CRSTDP Statistics
Workshop 2005

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
.

CTO/CRSTDP Statistics
Workshop 2005

Key Tourism Statistics


Visitor Arrival figures


Tourism expenditure estimates



Visitor Surveys
(expenditure,motivation,satisfaction etc.)


Accommodation and Tourism
Establishment Surveys


Tourism Satellite Account (TSA)

CTO/CRSTDP Statistics
Workshop 2005

2. Importance of Statistics in
Tourism 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



CTO/CRSTDP Statistics
Workshop 2005

Economic Importance of Tourism in
the CTO Caribbean

Year

C’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)

CTO/CRSTDP Statistics
Workshop 2005

Economic Importance of Tourism in
the 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

CTO/CRSTDP Statistics
Workshop 2005

Economic Importance of Tourism in
the 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.



CTO/CRSTDP Statistics
Workshop 2005

Typical tourism experience in
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



CTO/CRSTDP Statistics
Workshop 2005

Typical tourism experience in
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.





CTO/CRSTDP Statistics
Workshop 2005

Tourism 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

CTO/CRSTDP Statistics
Workshop 2005

Tourism 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





CTO/CRSTDP Statistics
Workshop 2005

Tourism 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





CTO/CRSTDP Statistics
Workshop 2005

Tourism 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.



CTO/CRSTDP Statistics
Workshop 2005

Using Surveys to Assess Visitor
Expenditure & Motivation,

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



CTO/CRSTDP Statistics
Workshop 2005

Using Surveys to Assess Visitor
Expenditure & Motivation,

etc.

Uses of Tourism Surveys cont’d:

4.
CRM/Visitor comment & feedback

5
. Evaluation of tourism promotion programmes

Information 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.


CTO/CRSTDP Statistics
Workshop 2005

Formula for determining Return on
Investment 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



CTO/CRSTDP Statistics
Workshop 2005

E.g. Tourism Advertising
campaign



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

CTO/CRSTDP Statistics
Workshop 2005

E.g. Tourism Advertising
campaign


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.

CTO/CRSTDP Statistics
Workshop 2005

3. Tourism Statistics in Macro
-
Economic 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



CTO/CRSTDP Statistics
Workshop 2005

Tourism Statistics in Macro
-
Economic 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


CTO/CRSTDP Statistics
Workshop 2005

Tourism Statistics in Macro
-
Economic 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


CTO/CRSTDP Statistics
Workshop 2005

Tourism Statistics in Macro
-
Economic 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


CTO/CRSTDP Statistics
Workshop 2005

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

CTO/CRSTDP Statistics
Workshop 2005

Economic Impacts


1.
Direct (first round)

2.
Indirect (upstream)

3.
Induced (tourism $ in Dom Y)

4.
Negative (leakages)

5.
Positive (government revenues ,
externalities ,multiplier effect)


CTO/CRSTDP Statistics
Workshop 2005

4. Tourism Statistics in Business
Planning & 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]

CTO/CRSTDP Statistics
Workshop 2005

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



CTO/CRSTDP Statistics
Workshop 2005

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



CTO/CRSTDP Statistics
Workshop 2005

Accommodation 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.

CTO/CRSTDP Statistics
Workshop 2005

Classifications cont’d

1.
Geographical classifications

-
Origin of guests

-
Origin of establishments

2. Establishment classifications

-
Type of establishment

-
Eligibility for survey


CTO/CRSTDP Statistics
Workshop 2005

Establishment Classifications


Establishments included in Classifications


Hotels

11 Hotels

12 Resorts


Motels

21 Motor inns

22 Motels and self catering accommodation


Hosted

31 Private Hotels

32 Guest Houses

33 Bed and Breakfast

34 Holiday farm (Host farm, Farm Stay) accommodation


Backpackers / Hostels

41 Backpackers / Hostels


Caravan Parks / Campgrounds

51 Caravan Parks

52 Camping Grounds


CTO/CRSTDP Statistics
Workshop 2005

Establishment 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

CTO/CRSTDP Statistics
Workshop 2005

Other 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)


CTO/CRSTDP Statistics
Workshop 2005

Key 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)




CTO/CRSTDP Statistics
Workshop 2005

Conclusion


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

CTO/CRSTDP Statistics
Workshop 2005

The END……

Merci! Gracias !
Danki ! Thank You!