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Types of visitors
16 Visitors can be classified into national and international visitors. National or 'domestic' visitors consist of Australian residents who travel outside their usual environment within Australia. They include both overnight visitors (staying one or more nights at a location) and same day visitors. International visitors are those persons who travel to a country other than that in which they have their usual residence.
17 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. There are some categories of individuals though that are exceptions to this one year rule in the balance of payments, in particular international students, who continue to be resident in the territory in which they were resident prior to studying abroad even if their course of study exceeds a year. The approach adopted in the Australian TSA is to include as visitors all international students undertaking short term courses with an actual length of stay of less than one year. If a student stays longer than one year (ignoring short-term interruptions to their stay, for example at vacation break), their usual environment is deemed to be the school or university, and they do not fit the definition of a visitor. However, if they travel outside their usual environment, they are considered a visitor.
18 For the purposes of measuring direct tourism gross value added and direct tourism GDP in the TSA, the consumption of Australian residents travelling overseas (outbound visitors) is excluded, except to the extent they consume domestically produced products before or after their overseas trip. This is because their consumption overseas does not relate to the value of goods and services produced within the Australian economy.
19 The usual environment is made up of one or more areas in which a person undertakes their regular activities such as their place of residence, place of work, place of study and other places frequently visited. The usual environment criterion has two dimensions; frequency and distance. Places that are visited on a routine basis (at least once a week) are considered part of a person's usual environment, even if the place visited is located a considerable distance from their place of residence. Further, locations up to 40 kilometres from home for overnight trips and up to 50 kilometres from home (round trip) for day trips are included in a visitor's usual environment in the Australian TSA.
20 Although a considerable amount of tourism spending may take place within the usual environment (i.e. purchase of air tickets, tour packages, pre-paid accommodation), the consumption of most tourism services occurs outside of the usual environment. Visitors have a positive economic impact on their destination by generating additional consumption at the destination over and above that generated by the resident consumers.
21 Tourism expenditure covers actual expenditure by the visitor, or on behalf of the visitor, and is defined in the international standards as:
'...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.' (International Recommendations for Tourism Statistics 2008, para 4.2)
22 Consistent with the definition of visitors, tourism expenditure includes expenditure by visitors whose primary purpose is business, whether this is totally or partially paid by businesses or government. Expenditure before or after the trip is likewise included provided the expenditures are related to the trip, such as the digital printing of photos after they return home or the purchase of tourism single-purpose consumer durables in anticipation of trips (e.g. luggage or camping equipment). Consumer durables which are purchased on a trip (e.g. motor vehicles) are also included, even though they are not mainly for use on trips. Since there is no reliable data source in Australia for acquisitions of valuables, this item is not included in the national accounts and is also excluded from tourism expenditure in the Australian TSA.
23 Expenditures by Australians travelling abroad on goods or services provided on Australian domestic territory, either before or after the trip, are included in tourism expenditure. In addition, outbound and inbound services provided by Australian international carriers are also included. All other expenditures by Australians while abroad are excluded from tourism expenditure, consumption and value added. These expenditures are classified as imports of goods and services.
24 Tourism consumption, as defined in the Australian TSA and the revised internationals standards, is broader in scope and also includes imputations for the consumption by visitors of certain services for which they do not make a payment. Imputed consumption included in the Australian TSA include:
25 In the Australian TSA, tourism consumption includes consumption by both domestic and international visitors. Domestic consumption is further split into that of households and that of business and government. This dissection is based on who incurred the expenditure rather than who actually paid. For example, a visitor may spend $1,000 on a business trip, of which $800 is reimbursed by the business. While the primary purpose of the trip is business, $800 is recorded as business consumption, with the remaining $200 reported as household consumption.
26 Some further information on particular inclusions and exclusions from tourism consumption are discussed in the 1997-98 issue of this publication.
Direct tourism gross value added and direct tourism GDP
27 Direct tourism gross value added and direct tourism GDP are the major economic aggregates derived in the TSA. The concepts are not the same and it is important to outline the differences between them.
28 Direct tourism gross value added shows only the 'value' which a producer adds to the raw material goods and services it purchases in the process of producing its own output. Direct tourism gross value added is measured as the value of the output of tourism products by industries in a direct relationship with visitors less the value of the inputs used in producing these tourism products. Output is measured at 'basic prices', that is before any taxes on tourism products are added (or any subsidies on tourism products are deducted). Taxes on tourism products include the GST, wholesale sales taxes and excise duties on goods supplied to visitors. Direct tourism gross value added is directly comparable with estimates of the gross value added of 'conventional' industries such as mining and manufacturing that are presented in the national accounts.
29 SNA 2008 states that basic price measures are to be used for comparisons between industries and across countries because it is free of the effects of taxes and subsidies on products which can vary between industries (and countries) and over time. The tax and subsidy component of a product's sale price does not represent value added by the industry producing that product.
30 Direct tourism GDP, on the other hand, measures the value added of the tourism industry at purchasers' (market) prices. It therefore includes taxes paid less subsidies associated with the productive activity attributable to tourism. Direct tourism GDP will generally have a higher value than direct tourism value added. Direct tourism GDP is a satellite account construct to enable a direct comparison with the most widely recognised national accounting aggregate, GDP. While direct tourism GDP is useful in this context, the direct tourism gross value added measure should be used when making comparisons with other industries or between countries.
Gross fixed capital formation
31 Purchases of capital assets are excluded from tourism demand for the purposes of calculating direct tourism gross value added, as there is no direct relationship between the visitor and the acquisition of capital by the tourism industries.
32 The services that capital investment provide are captured to the extent that the price change for products implicitly include a component to cover the cost of capital. Whilst the purchase of capital by tourism industries is of significant analytical interest in its own right, data of sufficient quality are not available for publication in the Australian TSA. Collection of industry data for gross fixed capital expenditure presents a number of difficulties, one being that assets obtained under finance leasing arrangements need to be recorded in the industry of the lessee rather than the legal owner.
33 Not all products and industries in the standard national accounts product and industry classifications are related to tourism. Therefore, the TSA distinguishes between products and industries that are related to tourism, and those which are not. Tourism related products and industries are further classified into tourism characteristic and tourism connected. There are three categories of industry and product in the TSA, as outlined below.
Tourism related products
34 Tourism characteristic products are defined as those products which would cease to exist in meaningful quantity, or for which sales would be significantly reduced, in the absence of tourism. Under the international TSA standards, core lists of tourism characteristic products, based on the significance of their link to tourism in the worldwide context, are recommended for implementation to facilitate international comparison. The core list of tourism characteristic products is consistent with the international classification of products, namely the Central Product Classification, Version 2 (CPC V2.0).
35 It is also recommended in the international TSA standards that country-specific tourism characteristic products are identified. In the Australian TSA, for a product to be a country-specific tourism characteristic product, at least 25 per cent of the total output of the product must be consumed by visitors.
36 Tourism connected products are those that are consumed by visitors but are not considered as tourism characteristic products. All products in the supply and use table not consumed by visitors are classified as 'all other goods and services' in the TSA.
37 See Appendix 1 for a correspondence between tourism related products in the Australian TSA, and products included in the CPC V2.0.
Tourism related industries
38 Tourism characteristic industries are defined as those industries that would either cease to exist in their present form, or would be significantly affected if tourism were to cease. Under the international TSA standards, core lists of tourism characteristic industries, based on the significance of their link to tourism in the worldwide context, are recommended for implementation to facilitate international comparison. The core list of tourism characteristic industries is consistent with the newly revised international classification of industries, namely the International Standard Industrial Classification, Revision 4 (ISIC Rev. 4), which aligns closely with ANZSIC 2006.
39 In the Australian TSA, for an industry to be a country-specific tourism characteristic industry, at least 25 per cent of its output must be consumed by visitors. Whether or not an industry is classified as characteristic has no effect on total value added resulting from tourism, as the TSA measures the gross value added resulting from the production of products directly consumed by visitors, not the total gross value added generated by tourism related industries.
40 Tourism connected industries are those, other than tourism characteristic industries, for which a tourism related product is directly identifiable (primary) to it, and where the products are consumed by visitors in volumes which are significant for the visitor and/or the producer. All other industries are classified as 'all other industries', though some of their products may be consumed by visitors and are included in the calculation of direct tourism gross value added and direct tourism GDP.
41 The following points are worth noting about the industry classifications for the TSA:
42 See Appendix 2 for a correspondence between tourism related industries and industries included in the ANZSIC.
TOURISM SATELLITE ACCOUNT FRAMEWORK
43 The supply and use tables for the Australian economy provide the framework in which data for visitor expenditure (demand) and industry output (supply) are integrated and made consistent in the TSA benchmark. Moreover, they provide the means of calculating direct tourism gross value added and direct tourism GDP. The input-output table variant provides a tool for further analysis and economic modelling of tourism.
44 The 'supply' table is a matrix showing (in the rows) the basic price values of products produced by each major industry. It also shows the supply of products from imports, and the net taxes on products and trade and transport margins required to derive supply at purchasers' prices. The 'use' table shows the use of each product, both as intermediate consumption by industries and in domestic final demand and exports. The use table also shows the primary inputs (compensation of employees and gross operating surplus) required by each industry.
45 The supply and use tables are brought to balance so that the supply of each product equals its use. The supply and use tables on which the TSA is based contain 67 industries and 297 products. To derive the TSA, it was necessary to augment the standard supply and use tables. As the objective of the TSA is to focus on tourism related products and the industries that produce them, some disaggregation of the products and industries shown in the standard tables was required. For operational convenience in constructing the TSA, the non-tourism products and industries were compressed, but the details still remain in the underlying supply and use tables.
46 An important characteristic of tourism products is that they are not uniquely defined by their nature, but by who purchases them. Therefore, the consumption of each product has to be divided into that part consumed by visitors and that part consumed by non-visitors. This information is used to partition industries into their tourism and non-tourism components, enabling the derivation of direct tourism value added and direct tourism GDP.
47 An important part of the compilation process is to check the consistency of data for visitor expenditures on products with the total supply of products. Apparent inconsistencies have to be resolved by further data investigations and adjustment.
48 More details on the supply and use approach to constructing a TSA can be found in OECD's, "Measuring the Role of Tourism in OECD Economies". Readers who require more detailed information on supply and use tables should consult SNA 2008.
CALCULATING BENCHMARK TOURISM GROSS VALUE ADDED AND TOURISM GDP
49 The gross value added for an industry is derived as the gross output for that industry less the intermediate consumption required to produce that output. However, as the tourism industry is defined according to who purchases an industry's output rather than according to the nature of the output itself, tourism consumption is required in order to measure the tourism output of industries. For the current TSA time series, benchmark years are 2003-04, 2006-07 and 2009-10.
50 To calculate direct tourism gross value added, a number of steps are required. These can be summarised as:
51 It is not feasible to collect the detailed supply side data required to produce a timely full scale TSA every year. However, the key aggregates can be updated annually using relationships in the benchmark TSA and demand side data that are available on a yearly basis.
52 The following steps are used in the update years:
53 Where there is structural change in tourism related industries, or the economy more generally, in the update years, it is likely that there will be revisions when the next benchmark is compiled.
54 The main data sources used to compile the benchmark and the update TSA are described in this section. The 1997-98 issue of this publication provides additional information on the data sources used to compile a benchmark TSA.
Tourism consumption data
55 The data sources for actual expenditures are the same for both the benchmark and update years.
56 Most of the visitor expenditure data used in the compilation of the TSA is sourced from TRA in the National Visitor Survey (NVS) for expenditure by Australian visitors and the International Visitor Survey (IVS) for expenditure by international visitors. These data are supplemented with data from the balance of payments and national accounts.
57 The international visitor consumption total is the sum of the balance of payments, transportation and travel services items adjusted for conceptual differences between the TSA and balance of payments. The conceptual differences relate to the restricted coverage in the TSA of student visitors studying in Australia; imputations for non-market services provided to overseas visitors; margins on foreign exchange transactions; and the value of products provided to overseas visitors within private households. IVS data provide the detailed product information.
58 Adjustments to the TRA data are required to break down the following broad expenditure categories for both domestic and international visitors: organised tours, package tours, conference fees, and trips with more than 21 stopovers. Given a lack of suitable direct information, these allocations are made on the basis of models or supplementary information from either ABS or TRA surveys.
59 The major imputed component in tourism consumption relates to the imputed value in 'actual and imputed rent on dwellings', where the imputed value of rent refers to the consumption of housing services provided by holiday houses to the owner. The estimate is calculated by multiplying average annual rents by the total number of holiday houses in Australia from the Census of Population and Housing.
60 An imputation for products provided to visitors in private households is derived using indicators from the ABS Household Expenditure Survey and IVS/NVS data which are moved forward using household final consumption expenditure from the National Accounts. These methods are used for both the benchmark and update estimates.
61 For the 1997-98 TSA the imputation for non-market services provided by government utilised data on visitor numbers from Cultural Trends in Australia: A Statistical Overview, 1997 (cat. no. 4172.0), whilst the imputation for foreign exchange margins was derived using international visitors' expenditure data, and data for currency buy/sell rates. Estimates for later years are extrapolated using movements in government final consumption expenditure on relevant products for the government imputation, and movements in the number of short term arrivals for the foreign exchange imputation.
62 Internal tourism consumption at basic prices is calculated by removing the net taxes, margins and imports from internal tourism consumption at purchasers' prices. This is done using relationships in the supply and use tables. Estimates of GST for years from 2000-01 onwards are available from the supply and use tables. Generally a 10% GST applies to all expenditure by domestic households and international visitors, excluding expenditure on education, health, international airfares, and groceries that are GST exempt. In the update years other product taxes, subsidies, imports and margins are calculated using a variety of sources including government budget reports, balance of payments data and retail trade data.
Relationship with balance of payments tourism related services
63 Memorandum items for credits (exports) and debits (imports) of tourism related services are included in Balance of Payments and International Investment Position, Australia (cat. no. 5302.0). These are derived by combining total travel services (business, education-related and other personal travel), passenger fares, and the air transport component of other transportation services which relates to agency fees and commission receipts.
64 In this publication information on Tourism Consumption by Australian Residents on Outbound Trips is presented. This table records the value of goods and services sourced from non-residents purchased by Australian residents in association with these trips. The difference in the estimates in this publication and the service debits memorandum item published in the balance of payments relate to: any transactions between residents and non-residents which do not relate to the value of tourism goods and services purchased within Australian economic territory; expenditure by student travellers on long term visas (as they do not meet the definition of a visitor); and payments to non-resident travel agencies for services provided outside Australian territory.
65 Balance of payments tourism related services credits are closely related to exports of tourism goods and services in the estimates of the value of domestically produced goods and services presented in the Tourism Consumption by Non-residents on Inbound Trips table in this publication. The most significant differences occur because the Australian TSA excludes the expenditure of overseas students with a length of stay of greater than one year and non-resident to resident transactions which occur in other countries, i.e. delivery of services by Australian residents in other countries, both of which are included in the balance of payments. The other differences relate to the TSA imputations for non-market services provided to overseas visitors, margins on foreign exchange transactions and the value of products provided to overseas visitors within private households, these imputations are generally not recorded in the balance of payments.
66 While the supply and use tables provide 'control totals' for industry output of products and the inputs required to produce those products, in the benchmark TSA years of 2003-04, 2006-07 and 2009-10 the data have to be disaggregated and rearranged to focus on tourism related products identified from tourism demand data. This has mostly been done using information from the ABS annual business surveys.
67 The ABS annual business surveys collect data for business income and expense items for all broad industry groups in the economy. These surveys were expanded in the 1997-98, 2000-01, 2003-04, 2006-07 and 2009-10 reference years to provide extra data for tourism characteristic industries. The ABS Economic Activity Survey (EAS), supplemented with taxation data, is the major source of data for the following industries: transport, automotive fuel, motor vehicle hire, travel agents, accommodation, cafes and restaurants, pubs and taverns, clubs, gambling industries and casinos.
68 As the TSA supply table is not updated for the extrapolated years, benchmark coefficients are carried through to the update estimates. Recently published TSA estimates have used benchmark coefficients for 2003-04 and 2006-07 applied to the time series. With the release of new benchmark data for 2009-10 new coefficients for 2006-07 were also produced and selected 2003-04 coefficients, which apply to all periods in the series prior to 2006-07, were revised. The 2009-10 coefficients are carried through to 2012-13 in this publication, and will continue to be used until the derivation of a new benchmark for the 2012-13 reference year due for release in April 2016.
69 Persons employed in tourism related industries will generally provide services to both visitors and non-visitors. Tourism employment is derived for each industry by applying the tourism value added industry ratios from each of the benchmark years to employment estimates for each industry in subsequent years. The employment estimates between benchmark years are smoothed. This method of using the tourism value added industry ratios involves an assumption that the employment generated by tourism in each industry is in direct proportion to value added generated by tourism in the benchmark year.
70 Details by industry of employment, status in employment and gender, are collected in the Labour Force Survey (LFS) in the February, May, August and November months. Estimates of the number of total, full-time and part-time, and male and female tourism employed persons by industry have been calculated as the average of these four months. Total employment is derived by adding employment in the defence forces to the civilian labour force. Alternative data sources were used for the accommodation, travel agency, cafes and restaurant, clubs, pubs, taverns and bars, casinos and other gambling services and air and water transport industries, where employer survey data have been used in the benchmark years up to 2006-07 when available. Employment in these industries has been extrapolated using movements in the LFS for the updated years. However, there may be some downward bias in estimates for the tourism industries due to the timing of these collections, i.e., the LFS survey months exclude the major Christmas holiday period, and the employer survey data are provided as at a point in time, e.g. 30 June.
71 Part-time, full-time, male and female employment ratios are derived for each tourism characteristic and connected industry using LFS ratios and applying these ratios to the total number of tourism employed persons by industry. The underlying assumption is that the LFS distribution of part-time, full-time, male and female employment from within a given industry is consistent with the distribution of part-time, full-time, male and female employment within the tourism share of that particular industry.
72 Hours worked by labour is a key input to the measurement of labour productivity in industry analysis. The index of tourism hours worked presents a tourism view of labour input conceptually equivalent to the ANZSIC Division level labour input index presented in the national accounts, and, as such, it allows comparison of labour input growth in tourism with traditional industries. However, the method for producing the tourism index differs from that applied in the national accounts, where the index is constructed from industry estimates of aggregate annual hours worked in the reference year. As aggregate annual hours worked is unavailable at the detailed industry level necessary for application to tourism, the tourism index is instead based on annual averaging of quarterly detailed estimates of actual hours worked. This approach has been found to produce estimates of sufficient quality for the analysis of movement in a data series such as that described by an index and also produces results comparable with the National Accounts hours worked indexes.
73 Some of the tourism industries in the TSA have been compressed in the tables relating to employment because the LFS is not designed to produce estimates of sufficient accuracy for some of the fine level industries in the TSA.
Other visitor characteristics
74 Domestic visitor numbers are sourced from the NVS. As the survey commenced in January 1998, the visitor numbers for this year have had to be extrapolated to a financial year basis (1997-98). Data for all subsequent years are based on financial year data from TRA.
International arrivals and departures
75 Data on international arrivals and departures (by country of origin or destination) were taken from the ABS publication Overseas Arrivals and Departures, Australia (cat. no. 3401.0).
QUALITY OF ESTIMATES
76 While as much care as possible has been taken to ensure the quality of the estimates in the TSA, users should exercise some caution in the use and interpretation of the results. In order to produce estimates at a finer level of product and industry detail than that normally provided in the national accounts, some of the data have had to be stretched up to the limits of their design capabilities. Moreover, major tourism aggregates such as direct tourism gross value added and tourism employment are not directly observable in practice. They have to be modelled in a supply and use framework. The assumptions underlying the estimates can have an effect on their quality.
77 The estimates have been prepared from a wide range of statistical sources. Some are closely related to the desired national accounting basis, but others are not. There are differences in coverage, concepts and timing. Many of the tourism industries and products identified in this publication are at a more detailed level, or do not directly concord with the industry and product details in the national supply and use tables. While every effort has been made to improve the survey coverage of the finer level tourism industries, the accuracy of these estimates are subject to a higher degree of error than that generally pertaining to the broader level estimates published in the national accounts.
78 Tourism expenditure data are generally obtained from large scale visitor surveys and are a key component of the TSA. These surveys are scientifically designed to produce estimates of good quality but, like all sample surveys, are subject to sampling variability. The relevant NVS and IVS publications describe in detail the associated confidence intervals for a given estimate. In order to adapt the visitor survey data to the concepts and classifications required for the TSA, some dissection and rearrangement of the data has been required. While the rearrangement of the basic data can impact on the quality of tourism consumption estimates for individual products, the aggregate level of tourism consumption should not be affected, although the estimate of direct tourism gross value added could be.
79 The most significant assumption in the compilation of a TSA relates to the use of the tourism product ratios and the tourism industry ratios in the calculation of tourism related monetary and employment aggregates. The default assumption is that the input requirements of tourism and non-tourism output are identical for an industry. While this is likely to be a more valid assumption for fine level industries where industry output is relatively homogenous (such as the taxi transport industry), there will be some instances where the assumption may be less valid. This is more likely to be the case where the tourism specialisation ratio of the industry is low, and a diverse range of products are produced. However, errors resulting from the use of assumptions will tend to offset in the calculation of the broad aggregates such as direct tourism value added and direct tourism GDP.
80 In the TSA update years the allocation of direct tourism gross output to producing industry and the derivation of direct tourism gross value added are based on relationships that applied in the benchmark years. In terms of earlier data in the time series (with some exceptions with significant industry structural change during this time), the industry coefficients from 2003-04 are used back to 1997-98 and forward to 2006-07 (the following benchmark year). In compiling the 2009-10 benchmark the coefficients for the previous 2006-07 benchmark year, as well as the update years, were reviewed and adjusted as appropriate (as were some of the 2003-04 coefficients where necessary). From 2006-07 to 2009-10, industry coefficients from 2006-07 were used except for those industries where the structural change was significant enough to warrant smoothing of the coefficients between benchmarks. In the absence of such smoothing, data movement between 2008-09 (using 2006-07 coefficients) and 2009-10 would have been significant and resulted in a broken time series. The review of these coefficients for all years was required to reflect the significant revisions to the demand side data sourced from TRA in the NVS for expenditure by Australian visitors and the IVS for expenditure by international visitors.
81 The underlying assumption of the three yearly benchmarking approach is that structural change occurs only slowly. The extrapolation techniques used in the TSA updates may not fully capture structural changes in the tourism industry and the Australian economy. To overcome this deficiency the benchmark coefficients can be altered in the TSA updates where there is strong evidence of structural change in tourism related industries. As the benchmark relationships are likely to become less relevant over time, extrapolated estimates only remain tenable where there is a realignment to periodic benchmarks.
82 Estimates of the number of persons employed in tourism related industries have generally been derived from the LFS. As this is a household survey, it has some deficiencies when used to derive detailed industry estimates. In order to mitigate some of these potential quality problems, estimates of employment have been published at a more aggregated industry level than that provided in the first dimension of the TSA.
83 Most figures are subject to revision as more complete and accurate information becomes available.
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