1. Tourism Satellite Accounts: Approaches and Applications Dr. Tien Pham Manager Strategic Research Analysis

2. Acknowledgment The Thai Government Ministry of Tourism and Sports

3. Objectives 1.Explain the TSA framework 2.Highlight the role of TSA in support of policy making 3.Comment on the Thai TSA compilation

4. Why TSA is needed? The System of National Accounts do not contain information of tourism explicitly. Tourism Satellite Accounts provide information base for: assessing economic contribution of tourism in an economy at one point in time and over time comparing tourism contribution with other industries in an economy or across economies.

5. TSA - Guidelines They should be statistical in character and produced on a regular basis Estimates must be based on reliable statistical sources, where visitors and producers of the goods and services they consumed are both observed, using independent procedures

6. TSA - Guidelines Data should be comparable over time within the same country, comparable among countries and comparable with other fields of economic activities Data should be internally consistent and presented within macroeconomic framework recognised at the international level. Source: Tourism Satellite Account: Recommended Methodological Framework 2008, pages 1-2. http://unstats.un.org/unsd/publication/Seriesf/SeriesF_80rev1e.pdf

7. Travel vs tourism Travel is a broad concept which encompasses the activity of travellers and includes commuting to a place of work, migration and travel for business or leisure. A traveller is defined as: '..someone who moves between different geographic locations, for any purpose and any duration.' (International Recommendations for Tourism Statistics 2008, para 2.4).

8. Who are visitors ? A visitor is a traveller taking a trip to a main destination outside his/her usual environment for less then a year and for any main purpose (business, leisure or other personal purpose) other than to be employed by a resident entity in the country or place visited. Source: TSA: RMF, page 1 http://unstats.un.org/unsd/publication/Seriesf/SeriesF_80rev1e.pdf

9. Usual Environment If a person stays in the one place for longer than one year, their centre of economic and social interest is deemed to be in that place, so they no longer qualify as a visitor. The one year rule for length of stay for an international visitor is consistent with the principle applied in determining residency in the balance of payments, which generally requires the length of stay in an economic territory to be less than one year to qualify as a non-resident.

10. Usual environment Overseas Students attending universities – food, rent etc are excluded. But if they travel to visit places during their semester break, these expenses are counted as tourism, as the travel occurs outside of their usual environment.

11. Usual environment An “environment” requires two places “from” and “to” 40 km for overnight trips or 50 km for a round trip within a day are defined as “usual” environment. This concept varies between countries.

12. usual environment The following types of persons are not considered to be visitors:  persons for whom travel is an intrinsic part of their job, e.g., bus driver, air crew  persons who travel for the purpose of being admitted to or detained in a residential facility such as a hospital, prison or long stay care (question about health tourism)  persons who are travelling as part of a move to a new permanent residence  persons who are undertaking military duties  persons who are travelling between two parts of their usual environment. Source: ABS 5249.0 Australian National Accounts: Tourism Satellite Account, 201314

13. Tourism ? Tourism is a demand side phenomenon.

14. What do visitors consume ? Hotel Food and drink Airfares Taxi, buses, coaches – ground transportation Car rental Fuel Shopping Cultural services

15. What is tourism ? The whole thing that tourists consume.

16. Types of visitors national – domestic: household and business/government. international visitors

17. Types of Purposes Holiday Visiting family and friend Business Others

18. What is TSA ? A set of tables that bring demand and supply of tourism together. There are 10 tables altogether.

19. A set of tables: 1.Inbound tourism expenditure 2.Domestic tourism expenditure 3.Outbound tourism expenditure 4.Internal tourism consumption 5.Production accounts of tourism industries (basic prices) 6.Total domestic supply and internal tourism consumption 7.Employment in the tourism industries 8.Tourism gross fixed capital formation 9.Tourism collective consumption by levels of government 10.Non-monetary indicators

20. Tourism Expenditure the amount paid for the acquisition of consumption goods and services, as well as valuables, for own use or to give away, for and during tourism trips. It includes expenditures by visitors themselves, as well as expenses that are paid for or reimbursed by others.'

21. Tourism Consumption Expenditure + Imputed values of non-market transaction The Australian TSA include: Services provided by one household to the visiting members of another household free of charge – the value of goods such as food and purchased services provided by host family/friends. Housing services provided by vacation homes on own account (imputed services of holiday homes deemed to be consumed by their visitor owners) Imputed values of nonmarket services provided directly to visitors such as public museums even though these may be provided free or at a price which is not economically significant.

22. Tourism Consumption Imputed values: Imputed and actual rent on vacation homes Recreational, cultural and sporting services Shopping (including gifts and souvenirs) Food products Alcoholic beverages and other beverages Fuel (petrol, diesel)

23. The Australian TSA tables: TABLE 1 TOURISM INDUSTRY SHARE OF GROSS DOMESTIC PRODUCT AND ASSOCIATED CHAIN VOLUME MEASURES TABLE 2 DIRECT TOURISM GROSS DOMESTIC PRODUCT, By type of visitor TABLE 3 DIRECT TOURISM OUTPUT, By Tourism Related Industry — Basic Prices TABLE 4 DIRECT TOURISM GROSS VALUE ADDED, By tourism related industry TABLE 5 TOURISM CONTRIBUTION TO INDUSTRY GROSS VALUE ADDED, By industry division (a) TABLE 6 INTERNAL TOURISM CONSUMPTION, By tourism related product — Purchasers' prices

24. The Australian TSA tables: TABLE 7 INTERNAL TOURISM CONSUMPTION, By type of visitor, by tourism product — Purchasers' prices TABLE 8 AVERAGE INTERNAL TOURISM CONSUMPTION PER TRIP (a), By type of visitor, by tourism related product — Purchasers' prices TABLE 9 DOMESTIC TOURISM CONSUMPTION, By length of stay, by tourism related product — Purchasers' prices Table 10 TOURISM CONSUMPTION BY PRODUCT, Chain volume measures (a) Table 11 INTERNAL TOURISM CONSUMPTION, GROSS VALUE ADDED (GVA) AND GROSS DOMESTIC PRODUCT (GDP), Chain volume indexes (a) TABLE 12 TOURISM CONSUMPTION BY AUSTRALIAN RESIDENTS ON OUTBOUND TRIPS

25. The Australian TSA tables: TABLE 13 TOURISM CONSUMPTION BY NON-RESIDENTS ON INBOUND TRIPS TABLE 14 DIRECT TOURISM EMPLOYMENT, By industry, by status in employment TABLE 15 DIRECT TOURISM EMPLOYMENT, By industry, by gender TABLE 16 TOURISM GROSS VALUE ADDED (GVA) by tourism related industry, hours worked and GVA per hour worked TABLE 17 NUMBER OF TOURISM TRIPS, By type of visitor, by length of stay TABLE 18 SHORT-TERM ARRIVALS BY INTERNATIONAL VISITORS, By country of residence (a) TABLE 19 SHORT-TERM DEPARTURES BY AUSTRALIAN RESIDENTS, By main destination (a)

26. National TSA Procedure 1.Tourism expenditure survey data 2.Other national account data – Input Output tables; Economic business survey data

27. Processing Data Basic Price Imports Wholesales, retail margins Basic Price Net Com Taxes Imports Basic prices, received by domestic producers Purchasers’ prices paid by consumers Wholesales, retail margins These represent changes in the costs at different points in time in a process from the factory gate to consumers/tourists.

28. National Accounts – IO Tables Industry J1 J2 J3 … Jn Final Demands HH INV GOV EXP Value Added P1: Compensation of employees (COE) (not applicable) P2: Gross operating surplus & mixed income (not applicable) P3: Net taxes on products net taxes on products P4: Net taxes on production (not applicable) P6: Imports Imports T2: Domestic Production Commodity Cm … C3 C2 C1 T1: Total Intermediate use Total Sales

29. Example of industry cost structure Cost of production = Materials (intermediate inputs) + 40 Net taxes on products + 0 COE (wages) + 20 GOS (cost of using capital) + 35 Net taxes on production 5 Total = 100 This is the cost of a product at the factory gate Basic Price

30. National Accounts – IO Tables J1J2J3J4Total Supply C1XSC1 C2XXSC2 C3XXSC3 C4XXSC4 C5XSC5 C6XXSC6 TotalSJ1SJ2SJ3SJ4 Supply or Make Table

31. State TSA The consumption measured at basic prices is the output of the industry produced for the tourism purpose. Output Tourism Non-Tourism Tourism ratio = Tourism / Total Output Cost of production = Materials (intermediate inputs) + 40 x 0.7 = 28 Net taxes on products + 0 x 0.7 = 0 COE (wages) + 20 x 0.7 = 14 GOS (cost of using capital) + 35 x 0.7 = 24.5 Net taxes on production 5 x 0.7 = 3.5 Tourism Output = 70

32. The role TSA Enabling direct comparison of the tourism sector with other conventional industries Revealing tourist expenditure patterns and the important of different tourist groups Assisting appropriate marketing campaigns Providing critical information for informing policy on investment and assessing public funding policies Relevant to labour force policies including in relation to education and training Providing a framework for modelling tourism impact analysis

33. The role TSA The construction of a (regional) TSA should not be considered the end of a process. It is rather as the beginning of an ongoing process to unfold the importance of the tourism sector at a level relevant to policy makers and provide them with policy relevant insights so that tourism activity can be adequately nurtured and stimulated at the right time and right place for sustainable (regional) economic development. Who needs TSA? Government – Tourism Department Elements of the private sector

34. Applications – Direct TSA Allows tourism to be included in the main stream of economic analysis – comparing with other industries using aggregate figures: GVA, Output, employment … Provides a base to develop different measures of tourism performance (tourism yield for different markets) – business planning

35. Applications – Direct TSA Provides a base to develop tourism productivity (TRA, 2014) Provide a base for strategic management and policy analysis: employment (skill/job training and development), input demand (inter- industry linkage)

36. Australian outbound visitors Source: Australian Bureau of Statistics, Tourism Satellite Accounts, 213-14

37. Australian outbound visitors Source: Australian Bureau of Statistics, Tourism Satellite Accounts, 213-14

38. Applications – Important Note TSA is just a statistical tool – capturing tourism contribution to the economy TSA is not a model for impact analysis – so what’s next?

39. Applications – TSA in CGE TSA is embedded in a Computable General Equilibrium model. An example: Pham and Dwyer (2013) - A book chapter on how TSA is combined with CGE modelling

40. References 1.Barber-Dueck, C. and Kotsovos, D. (2003), The provincial and territorial tourism satellite account for Canada, 1998, www.canadatourism.com 2.Pham, D.T., L Dwyer, and R Spurr (2009). Constructing a regional TSA: The case of Queensland, Tourism Analysis, 13(5/6), 445–460. 3.Pham, T.D. and Dwyer, L. (2013), Tourism Satellite Account and Its applications in CGE Modelling. In Tisdell (Eds), The Handbook of Tourism Economics – Analysis, New Applications and Case Studies, Chapter 22, World Scientific Publishing. 4.Dwyer, L. and Pham, T.D. (2012), CGE Modeling. In Dwyer, Gill and Seetaram (Eds), Research Methods in Tourism, Chapter 13, Edward Elgar Publishing. 5.Tourism Research Australia (2014), Tourism Productivity Update, Canberra 2014.

41. Direct and Indirect Major difference between 1.TSA 2. Input Output

42. State TSA 1.Tourism expenditure survey data by state 2.State Input Output tables