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CTO/CRSTDP StatisticsWorkshop 2005
USE OF TOURISM
STATISTICS IN MACRO-ECONOMIC & BUSINESS
PLANNING
By McHale ANDREW
CRSTDP/CTO Research Adviser
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CTO/CRSTDP StatisticsWorkshop 2005
1. Introduction
" There are three kinds of l ies: l ies,
damned l ies and stat ist ics."
Benjam in Disrael i
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Why Statistics ?
"The objective of a national statistical system isto provide relevant, comprehensive, accurate
and objective statistical information. Generally,statistics are invaluable for monitoring thecountrys economic and social conditions, the
planning and evaluation of government and
private sector programmes and investment,policy debates and advocacy, and the creationand maintenance of an informed public."
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Why Statistics ? Contd
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 ?
Facilitate comparison across countries/regions
Benchmarking
Best Practices
Evaluation of performanceHowever, 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 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 inTourism Sector Development
YEAR INTL TOURISTARRIVALS
(millions)
EXPENDITURE
(US$ billions)
2000 698 4752001 684 463
2002 703 480
2003 691 523
2004 763 622
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CTO/CRSTDP StatisticsWorkshop 2005
Economic Importance of Tourism in
the CTO Caribbean
YearCBEAN (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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CTO/CRSTDP StatisticsWorkshop 2005
Economic Importance of Tourism in
the CTO Caribbean
With < 1% of world Pop > 3% of arrivals
Significant re: GDP, FX, Emp. ,businesscreation
Increases daily market size
Backward/forward sectoral linkages
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CTO/CRSTDP StatisticsWorkshop 2005
Economic Importance of Tourism in
the CTO Caribbean
Therefore tourist population must be factored inwhen 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
regional destination can involve:
A vast number of direct and indirectservices transactions across manyeconomic sectors involving transactions
with:
- airlines, hotels, guesthouses or privatevillas
- car rental companies
- public utility services
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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.
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CTO/CRSTDP StatisticsWorkshop 2005
Tourism Measurement Limitations
In Caribbean absence of a reliable,thorough and internationally uniformstatistical database from which one could
measure the full economic impact oftourism
Simple analyses of arrivals, estimates ofexpenditure (VEMS)
No in-depth analysis of Tourism economicimpact
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Tourism Satellite Account
Overview:
UN SNA 93 recommended TSA
WTO describes the TSA as the "only way to have anoverall 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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CTO/CRSTDP StatisticsWorkshop 2005
Tourism Satellite Account
Uses:
Provid e credible data on th e impact of tou r ism and relatedemployment
Serve as a standard framework fo r org anizing stat ist ical data ontour ism
Become a new in ternat ional ly accepted nat ional accoun t ing standard
endorsed by the UN Statis t ical Comm ission Funct ion as a pow erfu l inst rument for designing econom ic pol ic ies
related to tou r ism developm ent
Measure tourisms contribution to GDP and its ranking in relation toother econ om ic sectors
Provide data on tourisms impact on a countrys Balance Of Payments
Provide informat ion o n tou r ism h uman resource ch aracter is t ics Measu re the level of investment in tou r ism
Evaluate tax revenues generated by tou r ism in du str ies
Measure the level of tourisms consumption of other goods andservices
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Tourism Satellite Account
Benefi ts:
Reconc i l iat ion o f the demand-side data w ith thesupply-s ide data with in the accoun t br ing s greatercoherence to the defin i t ion of the industry ; allpar tners in the indus try wi l l speak a common
language.
Use of a recognized account ing system b r ingsenhanced credib i l ity to the econom ic analysis o f theindustry.
Use of an accoun t ing framewo rk can br ing o therimportant inform ation into the analysis of tour ism ,such as data on value-added benefi ts of tour ism ,tour ism share of GDP, government revenues, hum anresources development or f inancia l f lows .
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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 oftourism establishments, employment,attitudes of residents etc.)
3. Travel patterns and expenditure ofregional and international visitors
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Using Surveys to Assess Visitor
Expenditure & Motivation,etc.
Uses of Tourism Surveys contd:
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 attractivedestination or experience for the visitor.
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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
E g Tou r ism Advert is ing
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E.g. Tou r ism Advert is ing
campaign
Inquiries = brochures + website visits
In this example inquiries = 40,000 brochures+ 15,000website visits = 55,000 inquiries
Conversion rate is 25%[gross conversion (# people who
came, e.g. 60%) and net conversion (# people whocame 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 developmentcosts) = 110,000
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E.g. Tourism Advertisingcampaign
Total Spending = 55,000*25%*6 days*2.6people* $50 per day= $10,725,000
Therefore Net ROI is: 9,750,000/110,000 =97.5
For every advertising dollar spent, thereturn to the country was $97.50intraveler spending.
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3. Tourism Statistics in Macro-Economic Planning
Accurate statistics fundamental to goodeconomic planning!
Planners use statistical databases,
spreadsheets and modern analyticaltechniques to prepare reports andrecommendations for governments etc.
Analytical techniques utilized to project
program costs and forecast future trends inaggregate demand (GDP), employment,housing, investment, taxation, transportationand population
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Tourism Statistics in Macro-Economic Planning contd
Reliable and timely tourism statistics:
crucial to projections & forecasting
vital to better planning of tourism sectorand to justify its expansion
long-term and short-term plans for optimal
land use decisions on trade-offs betweencompeting uses re: growth maximization
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CTO/CRSTDP StatisticsWorkshop 2005
Tourism Statistics in Macro-Economic Planning contd
Reliable and timely tourism statisticsnecessary for rationalizing:
economic, political and social needs
traffic congestion, air, water and soilpollution
effects of growth and change oncommunity vs potential benefits fromtourism development
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CTO/CRSTDP StatisticsWorkshop 2005
Tourism Statistics in Macro-Economic Planning contd
necessary to have reliable data on trends andprojections in key sectors, including the tourismsector
not making best use of communitys land andresources can be counterproductive to theparticular development
crucial to policy framework formulation
informed decision-making by both public andprivate sectors at international, regional, nationaland local levels
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Policy formulation involves:
Defining the objectives of tourismdevelopment.
Setting growth targets for tourism.
Determining the type of tourism to beattracted.
Defining public and private responsibilities.
Minimizing deleterious effects of tourism
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Econom ic 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 BusinessPlanning & Investment Decisions
Rapid growth of tourism necessitate morefocused and informed planning andinvestment decisions by tourism business
Given massive investments andlender/shareholder demands tourismgrowth projections must be rigorous and
as accurate as possible [e.g. in Turtle territory]
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Business planning:
involves anticipating and controllingchange to maximize benefits of tourism
requires enterprises to rely on statistics forresearch, planning & design of marketingprograms
needs reliable data for financial projections
demands industry and sector performancestatistics for comparative analyses
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Investors
Rely on tourism statistics for:
decision-making and financing proposals
evaluating performance/justifying investments
monitoring implementation of governmentpolicies
building partnerships with airlines, governmentsetc.
benchmarking performance of host country vscompeting destinations
policy advocacy in trade associations
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Accommodation Surveys
Commerc ial Accommodat ionClass if icat ion Survey in New Zealand
* Survey data recorded using particular
groupings (classifications) and terms. Classifications
Survey provides information on groupings
used Commercial Accommodation SurveyIncludes geographical, establishment andemployee type classifications.
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Classifications contd
1. Geographical classifications
- Origin of guests
- Origin of establishments2. Establishment classifications
- Type of establishment
- Eligibility for survey
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Establishment Classifications
Establishments included in Classifications Hotels
11 Hotels12 Resorts
Motels21 Motor inns
22 Motels and self catering accommodation Hosted31 Private Hotels32 Guest Houses33 Bed and Breakfast34 Holiday farm (Host farm, Farm Stay) accommodation
Backpackers / Hostels
41 Backpackers / Hostels Caravan Parks / Campgrounds51 Caravan Parks52 Camping Grounds
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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 OutwardBound
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Other Classifications
Employee Type Classifications
- Numbers who usually work full-time (30hours or more a week)
- Numbers who usually work part-time (lessthan 30 hours a week)
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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)
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Conclusion
Tourism statistics crucial to macro-economic andbusiness planning
Tourist arrivals, length of stay and estimates ofexpenditure insufficient
Technological advances make possible rigorousdata analysis in quick time
Both businesses & governments need toupgrade tourism statistical systems to better
compete TSA welcome but needs to measure profitability Best practices must be emulated
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The END
Merci! Gracias !
Danki ! Thank You!
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