This Travel & Tourism Satellite Accounting research reflects a comprehensive
simulation of the new international standard adopted by the United Nations following the Enzo Paci World Conference on the
Economic Impact of Tourism (Nice, France, June 1999), thirteen years of model development and TSA experience by WTTC and
Oxford Economic Forecasting (OEF), and application of OEF's latest macro-economic forecasts.
TSA Economic Concepts
The Travel & Tourism Satellite Account is based on a 'demand-side' concept of economic activity, because the industry
does not produce or supply a homogeneous product or service like traditional industries (agriculture, electronics, steel,
etc). Instead, Travel & Tourism is an industrial activity defined by the diverse collection of products (durables and
non-durables) and services (transportation, accommodations, food and beverage, entertainment, government services, etc) that
are delivered to visitors. There are two basic aggregates of demand in the TSA:
- Travel & Tourism Consumption represents the value of products and services that have
been consumed by visitors. It is the basic demand-side aggregate used to construct an explicitly defined production-side
'industry' equivalent for comparison with all other industries. Travel & Tourism Consumption includes:
- Personal Travel & Tourism, more formally known as consumer expenditures, which captures spending by economy
residents on traditional Travel & Tourism services (lodging, transportation, entertainment, meals, financial
services, etc) and goods (durable and nondurable) used for Travel & Tourism activities.
- Business Travel by government and industry, which mirrors Personal Travel & Tourism's spending on goods and
services (transportation, accommodation, meals, entertainment, etc), but represents intermediate inputs used in the
course of business or government work.
- Government Expenditures (Individual) by agencies and departments which provide visitor services such as cultural
(art museums), recreational (national park) or clearance (immigration/ customs) to individual visitors.
- Visitor Exports, which include spending by international visitors on goods and services.
- Travel & Tourism Demand builds on Travel & Tourism consumption to include Travel &
Tourism products and services associated with residual components of final demand. It is used to construct a broader
'economywide' impact of Travel & Tourism. The residual elements of Travel & Tourism demand are:
- Government Expenditures (Collective) made by agencies and departments associated with Travel & Tourism, but
generally made on behalf of the community at large, such as tourism promotion, aviation administration, security
services and resort area sanitation services.
- Capital Investment by Travel & Tourism providers (the private sector) and government agencies (the public
sector) to provide facilities, equipment and infrastructure to visitors.
- Exports (Non-Visitor) which include consumer goods sent abroad for ultimate sale to visitors (such as clothing,
electronics or petrol) or capital goods sent abroad for use by industry service providers (such as aircraft or cruise
ships).
By employing input/output modelling separately to these two aggregates (Travel & Tourism Consumption and Travel &
Tourism Demand), the Satellite Account is able to produce two different and complementary aggregates of Travel & Tourism
Supply: the Travel & Tourism Industry and the Travel & Tourism Economy.The former captures the explicitly defined
production-side 'industry' equivalent, direct impact only, for comparison with all other industries, while the latter captures
the broader 'economy-wide' impact, direct and indirect, of Travel & Tourism.Through this process, the Satellite Account is
also able to determine that portion of supply, which it Imports from abroad.
Next, the satellite account breaks down both aggregates of supply (Industry and Economy) into the direct and indirect impacts
of Gross Domestic Product (GDP), the main descriptor of economic production, as well as the various components of GDP (Wages &
Salaries, Indirect/Transaction Taxes, Operating Surplus, Depreciation and Subsidies). Beyond the regular TSA accounts, a
separate analysis is also provided of Personal Income Taxes paid by Travel & Tourism generated employment and Corporate
and Property Taxes paid by Travel & Tourism companies. Finally, one of the most important elements of the Travel &
Tourism Satellite Account are the Employment results, which can now be quantified for the basic Travel & Tourism Industry
and the broader Travel & Tourism Economy.
- T&T Industry Employment generally includes those jobs with face-to-face contact with
visitors (airlines, hotels, car rental, restaurant, retail, entertainment, etc).
- T&T Economy Employment includes T&T Industry Employment plus those faceless jobs
associated with:
- Industry suppliers (airline caterers, laundry services, food suppliers, wholesalers, accounting firms, etc).
- Government agencies, manufacturing and construction of capital goods and exported goods used in Travel &
Tourism.
- Supplied commodities (steel producers, lumber, oil production, etc).
