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Enzo paci a startpoint in the world statistics

Statistics in the economical impact of tourism
Faculty of Economic Sciences, LUCIAN BLAGA University of Sibiu, Romania

From a global point of view tourism is one of the worlds largest industry. Evaluating the economical proportions of
tourism is a complex procedure which involves specific statistical tools. A primary such tool used for quantifying
the economical impact of tourism is the “tourism satellite account” This tool provide macroeconomic indicators able
to describe the size and economic importance of tourism. The perseverance, the advanced stage in the preparation of
the procedure from the conceptual, methodological and application point of view, the effectiveness of the
specialized institutions and workteams in ordering, organizing and aligning the economies for this field of activity,
make me believe that we face a new start in the national statistics and in the international statistics.
Key word: impact of tourism, tourism statistics, satellite account, differentiations in concepts.
JEL classification: A20
1. Introduction. The economical impact of tourism.
In the contemporary evolution of economics, tourism is a guiding vector especially for receiving countries and regions since it implies investments, employment and generate income.
From a global point of view, some authors consider tourism to be the worlds largest industry. This opinion is backed by the evolution of the main indicators in this branc According to results of simulations conducted by the World Travel and Tourism Council in 2008 the sector of tourism and travel contributed with 9,9% to the global gross domestic product and it holds 238 million jobs worldwide. Concerning international tourism, statistics of World Tourism Organization show that in 2007 there were 903 million tourists worldwide and that the overall income reached 856 billion usd, which is 625 billion euro.
Evaluating the economical proportions of tourism is a complex procedure which involves specific statistical tools. A primary such tool used for quantifying the economical impact of tourism is the “tourism satellite account” (TSA) (ro. CST). At present there are two versions of this statistical tool: the one of World Travel and Tourism Council and that of Recommended Methodological Framework (ro. CMR) (a common approach of WTO, OCDE, Eurostat and the Statistic Division of ONU). The two versions represent the viewpoint of respectively the private and public sectors and differ in methodology and conceptually sometimes.
The implementation of CST involves two stage1. Regarding the domain of tourism and travel through the viewpoint of GDP devided on components (consumption, investments, governmental costs, net exports) 2. The usage of input-output tables in order to translate the computations for the demand (outlined in the first stage) into offer: engagement and payment of the employes, indirect net assessments, etc.
The WTTC version measures the extend to which the economical capacity of a country is dependent, is because tourism and travel, while CMR approaches, from the perspective of the consumer, measures the expenses of tourists and travelers or the amount of output(/production) generated directly in the industry of tourism and its adjacent branches.
Between the two versions there are differences in level) for the obtained values of up to +40% (as in the case of Italy and Canada) and -40% (as in the case of Slovenia).
The differences in methodology of the CMR and WTTC versions arise from the difference in objective that the organizations have. WTTC is aiming at rising awareness in governments and private sectors of the importance of tourism as a major factor of economical growth. On the other hand CMR, through a more temperate approach, is measuring tourism like any other activity sector in agreement with SCN.
1 World Travel and Tourism Council, Tourism Satellite Accounting, 2008 Travel and Tourism Economic Research, Executive Summary ( Metodology for produsing the 2007 WTTC/OEF Travel and Tourism Simulated Satellite Account, March 2007 (
2. STA - Appearance of the tool
Tourism Satellite Account (TSA) is the result of a considerable effort, dating already since 1970. In that year, France has used the wording « satellite accounts » as a modality to denominate those practices of accounting, at national level in horizontal plane, which are not identified exactly with SNC but can, anyhow, be considered a “satellite subsystem” in the national system.
In 1982, the World Tourism Organization (WTO) has appointed Jose Quevedo (Spain) to prepare the basic document to describe tourism, following the recommendation available in the national account system existing at that date – since 1968.
In 1983, the fifth session of the General Assembly of WTO in New Delhi has highlighted the importance of such an exercise, the document submitted at this session has highlighted the importance of such an exercise as a uniform and comprehensive mean of measurement and comparison with other areas of the economy. It was not immediately implemented, but was considered to be a guideline for many activities of WTO (by that date) designated to lead to international harmonization of concepts and statistics in tourism.
The Committee for Tourism of OECD (Organization for Development and Economic Cooperation) has also analyzed in advance the tendencies, nature and role of performances of tourism in the economy of OECD.
The organization investigates by now some of the difficult problems referring to the measurement in tourism, with the view to issue the Manual for Economic Accounts in Tourism.
In 1991 WTO has organized the International Conference for Statistics of Tourism and Traveling, in Ottawa. Here are set the basics of the program for establishing of a common and credible method for evaluation of the economic activities in tourism, in correlation with other industries of the home economy. The scheme (program) is based on a examination project of the feasibility in using the principles of satellite accountancy in tourism.
After being adopted by the Committee for Statistics in 1993, the Recommendation in Statistics for Tourism are reanalyzed and WTO and OECD start to develop the conceptual frame for issuing TSA. The Department for Statistics, Economic Analysis and Marketing Investigation is founded; it is headed by Enzo Paci and Marion Libreros (France) and John Joisce (Canada) have been appointed responsibles for the development of thr project in WTO, resp.OECD.
In 15-18 June 1999 is orgenized the World Conference “Enzo Paci” for measurement of the economic impact of tourism. After that conference, the work group of the inter-secretariate WTO-OECD-Eurostat has been founded, with the target to set a common conceptual frame for the development of the methodological draft for TSA. Responsibles for the final technical recommendation were appointed Antonio Massieu (WTO), Louis Kincannon (OECD), Alain Dupeyras (OECD), Carl Obst (OECD) , Pedro Diaz (Eurostat) and Sofia Eriksson (Eurostat). In 2000 is approved the Satellite Account for Tourism: Methodological Frame Recommended by the Committee for Statistics in the 31st session, based upon the existence of the institutional platform created during this time interval. It is published in 2001.
In parallel, starting with 1990, have been developed simulations and practical models, taken from the real world, to illustrate the economic contribution of Travel & Tourism, depending on the needs of the leaders of the private area, of the politicians in the public area and of researchers in industry, based upon the interpretation of the National Account System.
3. STA – The trend.
During the last 20 years, the World Tourism and Travel Council (WTTC) and its economic consultants from the Oxford Economics (OE) have developed and published researches referring to the economic contribution of Travel and Tourism in the world, regional and national economies.These researches are tightly connected in the international norm for satellite accounts for tourism, approved by the Statistics Committee of the United Nations.
In the same way, the Committee of Experts from the private or public areas, founded under the umbrella of the World Tourism Organization, has the responsibility to monitor the final setting of the conceptual frame of CST.
The update of the investigation proceedings, in 2008, of CST researches, is equal to that one of the previous years. After a series of improvements to the simulation methodology of TSA, made by WTTC in 2003, and the extension of country coverage in 2004, the work of OE from 2006 linked to this simulation has been focused on guaranteing that the sources of data about tourism (especially about business travels) are updated as much as possible and are of the best achievable quality. Especially the number of visitors has been precisely forecasted (using a weighted mean of real expenses for travels abroad, on target countries) and that indicator has been correlated with the travels estimated to ensure for each country a richer image for the expenses tendency (consumption) of tourists.
In 2007, two new countries joined (Armenia and Azerbaidjan) and, for all countries included in the investigation program, this tendency of yearly updating of macro-economic data with the newest available figures.
The methodological documentation is structured as follows:• Section A consists in an introduction in the problematic and approach mode of CST.
• Section B shows a conceptual overview image of the approach, including definitions of some key-denominations used in the simulated accounts. The following sections describe in detail the approach for measuring different elements of the • Section C analyzes the personal consumption in Travel & Tourism;• Section D is referring to the measurement of consumption and investment made by the • Section E is focused on investment in T&T in the private area;• Section F describes the approach for measuring the foreign trade in T&T;• Section G explains the estimations referring to the expenses for business travels, for both employees from the private and public areas; • Section H describes the attempt to measure the supply part of the T&T economy;• Section I describes the attempt to approach less relevant data, to estimate the main T&T notions Additional details are presented in two annexes: • Annex A gives a description of the consumption part of the United States basis used in T&T ;• Annex B lists the detailed equations used by themselves for the model systems OE, for producing simulated TSA for the countries members of OECD. 4. Notions and differentiations.
WTTC and OE have implemented TSA starting from two points of view:• Applying a definition of tourism to develop a method to calculate the components of the e part of PIB: consumption, investment, government expenses and net export.
Using in-out tables for showing the request part in shares of the offer parts: occupation of the manpower and compensation, depreciation, exceedent in exploitation and taxes.
The recommended methodological frame defines tourism as being “activities of persons traveling to and staying in places different from their usual environment for not longer than one year for pleasure, business or other reasons, not paid at the visited place”.
The syntagm “usual environment” is used to exclude from the concept “tourist” the persons traveling daily between home and work or education place, or other places, visited frequently.
The definition of “usual environment” in terms of distance, duration or location has obviously some limits. The travel to the work place, on one side, or the travek in holiday, on the other side, have a wide coverage and are overlapping in time and distance. That’s why the definition of various travel types included in Travel &Tourism could vary and vary from one period to another, from a place to another, from country to country and so on. For avoiding this problem, we believe that the definition Travel &Tourism should rely strictly on the criteria of distance, duration and location and to be based on the large perspective of travel “beyond the usual environment”, by using statistical approach for the cases where data are available to allow an interpretation of the “usual environment”. The philosophy of the team working to implement the STA is to leave people traveling to use their data when separating their usual environment from Travel&Tourism. That’s why they have approached this exercise in two ways: • In the case of transportation polls which distinguish between travels according to mode, distance and scope, they understand “usual environment” for each mode and scope of travel as being the distance average minus two standard deviations. Two standard deviations are generally admitted by the statisticians to be outside the standard. • In the case of polls referring to the expenses of the traveler as the value of the expenses made “outside the town”, “during a travel” or “during a vacation”, that is considered to be the average outside the “usual environment”.
This method allows the “usual environment” to be defined by the travelers, more than by a factor defined arbitrary and potentially not adequate to this area.
According to Travel&Tourism, it is necessary to identify which economic activity of the traveler corresponds to the frame of the Satellite Account of Travel&Tourism. TSA;RMF suggests that all personal consumptions from before, during and after a travel, directly linked to this one, and also the expenses related to travel, accommodation, nourishment and other various purchases should be included in the satellite account. The expenses made by friends, relatives and business associates are also included.
The most difficult problem is how to handle durable consumers by jeans of TSA1 elements. A durable consumer is defined as “a consumption good which can be used repeatedly or continuously for more than one year, with a normal average of physic wear”. A consumption good is defined as a good “used without subsequent transformation in production, by individuals, and also by the government to cover the direct individual or collective needs of the members of the community”.
Such elements have not being included traditionally in the national studies of the economic impact of tourism, but TSA:RMF stipulate the inclusion of certain goods for long usage, consisting of: • Goods for longer usag “with a single purpose”, like these ones used only for traveling, like • Goods for long term usage “with multiple purposes”, used also outside the usual environment, like photo cameras, services due to motor vehicles and rest homes, or cars etc.,but only if they were bought during a travel. This research aims the WTTC approach which stipulates the inclusion in TSA of a share of the expenses made for goods with long term usage, used for touristic, but also for other purposes; only goods purchased during travels are counted. The expenses for long term usage goods are recorded separately in simulated TSA, with a view to allow comparisons with and without included expenses. This category is called “charged services”.
5. Concerns for implementation of CST in Romani
Starting with 2004, Romania, by its authorized institutions, National Institute for Research- Development in Tourism, National Institute for Statistics, Ministry of Tourism, has launched a training for the implementation of he Satellite Account for Tourism in Romania. The central importance of the results is that thay reveal the dimension of tourism as an economical sector of the national economy CST was implements in Romania by using mainly the tabular form proposed in the CMR version. As a whole, the CST implementation in Romania with both versions point out a relatively low contribution of national(tourism to GDP of approximately 2,2%, whereas worldwide the direct contribution of tourism to GDP is 2-7%.
The Satellite Account for Tourism provides macroeconomic indicators able to describe the size and economic importance of tourism, like the Added Value in Tourism and how much the tourism GDP is from the national GDP; detailed data about the consumption of visitors and how this consumption matches with the internal offer; basic information requested for the development of the economic impact models of tourism, for the preparation of an analysis of the tourism market; the link between economic data and other non related to currency information, like: Number of travels, duration, transportation means, etc. For two days, 13 and 14 July 2006, at the headquarters of ANT was organized a presentation session and a training session, organized by an expert of Oxford Economic Forecasting, partner of the World Tourism and Travel Council (WTTC).
It was concluded that the indicators like the arrival numbers of tourists, the number of accommodations, capacity for accommodation (number of places and rooms) indicators of utilization (degree of occupation), data provided by the National Bank of Romania, meaning incomes and expenses from international tourism and characteristic features of tourists, their conditions during travel and accommodation, are considered as being insufficient. There is a need o new information with a view to enhance the credibility of the quantification of tourism activities. They need to have following characteristics: to be statistical data and to be obtained using an appropriate data collecting system, meaning that the estimations have not to be realized only once, but along the entire statistical process; the estimations have to rely on credible statistical sources, both visitors and service providers should be investigated, the data should be comparable in time, within one country, but also with data coming from other countries and from other fields of activity.
For this purpose it was proposed and started an inventory of data sources which make reference to tourism. Following have been counted: statistics obtained from inquiries addressed to visitors, statistics get from the tourism companies, statistics get from administration units, statistical synthesis, other data 3 Cristi Ferent, Impactul economic al turismului. Statistică și metode de evaluare, Ed Universitara, Bucuresti 2009, pag. 179 sources (AMIGO a,o,). Also available statistic indicators from actual sources, like money indicators or work force indicators, have been reviewed, the statistic system of tourism has been evaluated and existing statistic research has been improved and new statistic investigation necessary for STA have been identified (Inquiry for foreign tourists in Romania, Research referring to touristic packages offered by tourism agencies/ touroperators from Romania, Evaluation of tourism to private persons (component of “private accommodation”) and also the case of secondary residences used for tourism, Research activities referring to the work force, gross formation of fix assets and government consumption in the tourism industry, a.o.).
In 2008 an exhaustive investigation in this area was performed. The research was sponsored by Accenture and performed by Oxford Economics. Within this research have been founded accounts for 176 countries and it was aimed the standardization of the methodology of the United Nations for measurement of the impact of the activity of Travel&Tourism (T&T) on the personal consumption, business expenses, investment, export, import, thus quantifying the contribution in the domestic product and occupation of the work force.
As a summary of this research it was shown that T&T has almost 240 million employees and creates 10% of the global Gross Domestic Product. The international tourism has reached almost 900 million and the visitors‘ expenses were accordingly high.
With respect to the contribution of T&T to the DDP, following of the research from 2008, • In Romania: the Industry of Travel and Tourism ensures 2.2% from GDP in 2008 (RON9.1 mld or US$3,630.5 mn), and a growth in nominal terms at 25.6 mld RON or 9,099.2 mn US$ (3.0% from total) up to 2018 is estimated. The contribution of this economy (% from total) should grow from 5,8% to 7,0% during this time period.
• In the European Community: the Industry of Travel and Tourism contribuyes with 3,6% from GDP in 2008, and the Economy of Travel and Tourism with 10,2%.
• At global level: In 2008 the Industry of Tourism contributes with 3,4% directly to the global GDP; the Economy of Tourism with 9,9% from the global GDP.
Referring to the occupation of the work force in activities of tourism, following have been • In Romania: the occupation of work force in the Economy of T&T is of 600.000 workplaces in 2008, 6,9% from total of employees or 1 for each 14,5 workplaces. Until 2018 it should reach 705,000 workplaces, 8,4% from the total number of employees or 1 at each 11,9 workplaces. The occupation for the Industry of T&T is in 2008 of 3,5% from the total of workplaces from 2007 and it will grow to 376000 or 4,5% until 2018.
• In the European Community: the Industry of T&T generates 8709000 workplaces in 2008 (3,9% from total), whereas the Economy of T&T generates 23938000 workplaces, or 10,8%.
• At global level: T&T creates workplaces covering the whole spectrum of employment. In 2008 one from 11.9 workplaces is generated by the Economy of Travel &Tourism. This economy has created 8,4% from the world employment. Today there are 80.7 million workplaces directly within the Industry of Travel &Tourism and 238,3 million in the Economy of Travel&Tourism; they will grow to 98 and respectively 296,3 million until 2018.
The Tourism Satellite Account is a statistic method which aims the measurement of the
economic impact of tourism; a direct comparison of the size of the tourism area to the other areas and its influence on other areas is possible. CST was created also to ensure a methodological standard in the definition, collecting, analysis and interpretation of tourism data, at the country level.
The advanced stage in the preparation of the procedure from the conceptual, methodological and application point of view, the effectiveness of the specialized institutions and workteams in ordering, organizing and aligning the economies for this field of activity make me believe that we face a new start in the national in international statistics.
With effort and perseverance a new model was launched; if it reaches the proposed target, it can serve as a basis for new “satellite” schemes. Over years we will talk about “Satellite System for Agriculture”, Satellite System for Industry” and so on.
The split of economics national systems in satellite systems is a favorable auspice? I wonder if this new schematic does not “break” the unity of economies, placing them in fragile component parts? References
• Eurostat, European Implementation Manual on Tourism Satellite Account(TSA), 2001 • Eurostat, Up-dating the Community Methodology on Tourism Statistics, workshop on tourism Ferent Cristi, Impactul economic al turismului. Statistică și metode de evaluare, Editura Universitara, Bucuresti, 2009.
• INCDT, studiul Adaptarea sistemului informaţional din turism la cerinţele integrării în Comunitatea Europeană (Contul Satelit al turismului) – etapele I, II, 2002-2003 • UN – Eurostat – OECD – WTO, Tourism Satellite Account – Recommended Methodological Framework, Luxembourg, Madrid, New York, Paris, 2001 • World Tourism Organization – WTO, General Guidelines for Developing the Tourism Satellite Account (TSA),volume 1, Measuring Total Tourism Demand, Madrid, 2000


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