Macro Mchale

8/11/2019 Macro Mchale

1/38

CTO/CRSTDP StatisticsWorkshop 2005

USE OF TOURISM

STATISTICS IN MACRO-ECONOMIC & BUSINESS

PLANNING

By McHale ANDREW

CRSTDP/CTO Research Adviser


2/38


1. Introduction

" There are three kinds of l ies: l ies,

damned l ies and stat ist ics."

Benjam in Disrael i


3/38


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."


4/38


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


5/38


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.


6/38


Key Tourism Statistics

Visitor Arrival figures

Tourism expenditure estimates

Visitor Surveys(expenditure,motivation,satisfaction etc.)

Accommodation and Tourism

Establishment Surveys Tourism Satellite Account (TSA)


7/38


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


8/38


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)


9/38



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


10/38



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.


11/38


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


12/38


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.


13/38


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


14/38


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


15/38



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


16/38



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 .


17/38


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


18/38


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.


19/38


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


20/38


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


21/38


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.


22/38


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


23/38


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


24/38



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


25/38



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


26/38


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


27/38


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)


28/38


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]


29/38


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


30/38


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


31/38


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.


32/38


Classifications contd

1. Geographical classifications

- Origin of guests

- Origin of establishments2. Establishment classifications

- Type of establishment

- Eligibility for survey


33/38


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


34/38


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


35/38


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)


36/38


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)


37/38


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


38/38

CTO/CRSTDP StatisticsW k h 2005

The END

Merci! Gracias !

Danki ! Thank You!

Macro Mchale

Documents