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This article was published in Tourism Indicators, Australia, December 2001 (ABS Cat. No. 8634.0).
Tourism Industry Gross Value Added
Tourism gross value added measures the value of tourism gross output at basic prices (i.e. excluding product taxes such as the GST) by all industries which supply tourism products, less the value of the inputs used in producing these tourism products. It is the preferred national accounts measure of the production of industries because it is free from distortions in prices caused by changes in tax rates or the introduction of new taxes over time.
Tourism gross value added grew from $22.4 billion in 1997-98 to $26.3 billion in 2000-01. Growth in tourism gross value added in 2000-01 was 5.9%, the same rate as for the economy as a whole (graph F1.2). Tourism gross value added grew by 5.7% in 1998-99 and 4.9% in 1999-2000, reaching $23.7 billion and $24.8 billion respectively.
Tourism's share of total industry gross value added was 4.3% in 2000-01 (graph F1.1), with the same share recorded in 1999-2000 and 1997-98. However, the tourism share of gross value added reached 4.4% in 1998-99.
Comparison with 'non-tourism' industries
Tourism contributed $26.3 billion to total industry gross value added ($611.9 billion) in 2000-01. When compared with the traditional industry groupings (Australian and New Zealand Standard Industrial Classification divisions) published in ABS statistics, the gross value added of tourism ranks twelfth, exceeding that of the following industry divisions:
Tourism consumption increased from $58.2 billion to $71.2 billion between 1997-98 and 2000-01. Domestic households consumed $45.9 billion worth of goods and services in 2000-01, while domestic business/government spent $8.2 billion, and international visitors spent $17.1 billion. The international visitor share of total tourism consumption was 24% in 2000-01, up 2 percentage points from 1997-98.
International trade in tourism and tourism employed persons
Tourism also contributes significantly to Australia's exports and to total employment (graph F1.1). In 2000-01, tourism contributed 11.2% of total exports of goods and services. The tourism share of total employment was 6.0%.
Tourism industry gross value added
In 2000-01, the industries which accounted for the largest shares of tourism industry gross value added were: Air and water transport (14.9%), Accommodation (10.5%), Cafes, restaurants and takeaway food outlets (9.5%), and Other retail trade (8.7%).
Tourism consumption is the total consumption made by a visitor or on behalf of a visitor for and during his/her trip and stay at the destination. Tourism consumption increased from $58.2 billion to $71.2 billion between 1997-98 and 2000-01.
The international visitor share of total tourism consumption was 24.0% in 2000-01, up from 22.0% in 1997-98, reflecting the impact of the Sydney Olympics. Of the 76.0% contributed by domestic visitors in 2001, households accounted for 64.4% and business/government visitors accounted for 11.6%.
The bulk of domestic tourism was by overnight visitors (76.6%), with day visitors accounting for the remainder (23.4%).
The latest year for which full details of tourism consumption by product is available is 1999-2000. In that year, Long distance passenger transportation represented the largest proportion of tourism consumption at 17.8%, followed by Shopping (including gifts and souvenirs) (15.6%), Takeaway and restaurant meals (14.5%) and Accommodation services (9.0%).
There are some marked differences in consumption patterns by type of visitor. Long distance passenger transportation has been the dominant tourism product consumed by domestic business/government and international visitors. Shopping (including gifts and souvenirs) and Takeaway and restaurant meals were the dominant products purchased by domestic household visitors.
Tourism consumption by households increased from $38.8 billion to $45.9 billion between 1997-98 and 2000-01. Tourism consumption of domestic business/government rose from $6.6 billion to $8.2 billion, and international visitor consumption increased from $12.8 billion to $17.1 billion. Total tourism consumption growth was 5.9% and 5.0% in 1998-99 and 1999-2000 respectively, followed by strong growth of 10.1% in 2000-01. The growth for 2000-01 mainly reflects the impact of the GST on prices paid. Growth in domestic tourism was strongest in services, which attracted GST for the first time. Also, Recreational, cultural and sports services were particularly boosted by expenditure on Olympics tickets. International visitor consumption by product data are not yet available for 2000-01.
International trade in tourism
Tourism makes an important contribution to Australia's export earnings. In 2000-01, international visitors consumed $17.1 billion worth of goods and services produced by the Australian economy. This represented 11.2% of total exports of goods and services. Although tourism exports have grown quite strongly since 1997-98, so have exports of other goods and services, resulting in a slight decline in the tourism share since 1998-99.
Exports of tourism characteristic products compare favourably with other Australian 'traditional' export products. For example, exports of tourism products is higher than coal, and iron, steel and non-ferrous metals, but lower than food and live animals.
Tourism employed persons
There were 551,000 persons in tourism generated employment in 2000-01. The number of tourism employed persons grew 7.4% between 1997-98 and 2000-01, faster than the growth rate in total employed persons (6.4%) over that period. However, the tourism share of total employed persons remained constant at 6.0% in each year.
The tourism share of total employment is higher than the tourism share of industry gross value added. This is because tourism tends to be more labour intensive, on average, than other forms of economic activity.
Retail trade generated the most tourism employment. Retail trade, Accommodation, and Cafes and restaurants accounted for more than half of the employment generated by tourism.
Domestic visitor numbers declined in 2000-01. Although the number of overnight visitors increased by 1.8 million in this year, the number of same day visitors fell by 14.3 million.
Short term international visitor arrivals to Australia exceeded 5 million in 2000-01. The number of arrivals grew strongly in 1999-00 and 2000-01 (up 8.5% and 8.8% respectively).
Source: Australian National Accounts: Tourism Satellite Account, 2000-01 (Cat. no. 5249.0).
The results of the 2000-01 TSA affirm the importance of tourism to the Australian economy. Domestic spending was the major component in the $71.2 billion worth of goods and services consumed by visitors in 2000-01, while preliminary estimates indicate that the international sector consumed more than $17 billion.
A TSA has been recognised internationally as the best method for measuring the economic contribution of tourism. Further details can be found in Australian National Accounts: Tourism Satellite Account 2000-01 (Cat. no. 5249.0), or contact Luisa Ryan on Canberra 02 6252 7346. Key results are available on the ABS web site < www.abs.gov.au >.
For an analysis of the key findings of the first TSA (relating to 1997-98), see the June quarter 2000 issue of Tourism Indicators, Australia (Cat. no. 8634.0). An article on the development of the first TSA, including key concepts and definitions, can be found in the March quarter 2000 issue of Tourism Indicators, Australia.
APPENDIX TO THE FEATURE ARTICLE: KEY DEFINITIONS USED IN THE TSA
CONCEPTS AND METHODS
The concepts and methods used in the calculation of the Australian TSA are based on international standards for TSAs which are published in Tourism Satellite Account: Recommended Methodological Framework (2001). This document is a joint publication by an Inter-Secretariat Working Group made up of the United Nations (UN), Organisation for Economic Co-operation and Development (OECD), World Tourism Organisation (WTO) and Eurostat (Statistical Office of the European Communities).
DEFINITION OF TOURISM
'Tourism' comprises the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited. The TSA refers to these persons as 'visitors'.
Tourism is not an industry in the traditional sense because industries are classified in accordance with the goods and services that they produce, whereas tourism depends on the status of the customer. Nearly all of the broad industry groups are involved to a greater or lesser extent in providing goods and services directly to visitors. While all the products that are produced and consumed in meeting tourism demand are embedded in the core national accounts, they are not readily apparent.
The TSA partitions industries into tourism and non-tourism activities so that the direct contribution of tourism to the economy can be measured on a consistent basis with 'traditional' industries such as agriculture, manufacturing and retail trade.
The estimates of tourism gross value added, Tourism GDP and tourism employment, relate only to the direct impact of tourism. A direct impact occurs where there is a direct relationship (physical and economic) between the visitor and producer of a good or service. (For estimates of tourism's indirect contribution to the economy, see: Research Paper No. 6: Tourism's Indirect Economic Effects 1997-98 published by the Bureau of Tourism Research in 2001. The Bureau of Tourism Research plans to update these estimates in the future.)
TOURISM CHARACTERISTIC INDUSTRIES AND PRODUCTS
Tourism characteristic industries are those industries that would either cease to exist in their present form, producing their present product(s), or would be significantly affected if tourism were to cease. In the Australian TSA, for an industry to be characteristic, at least 25% of its output must be consumed by visitors.
Tourism characteristic industries are:
Tourism characteristic products are those products which represent an important part of tourism consumption, or for which a significant proportion of the sales are to visitors. For a product to be 'characteristic' it must account for at least 10% of total tourism consumption and/or at least 25% of the total output of the product must be consumed by visitors.
Tourism characteristic products are:
TOURISM CONNECTED INDUSTRIES AND PRODUCTS
Other industries and products connected with tourism (but less significant to tourism) are described as tourism 'connected'. This definition refers to those industries and products not characterised as tourism characteristic, for which a tourism related product is directly identifiable and consumed by visitors in volumes which are significant for the visitor and/or producer.
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