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26 Feb, 2001

Asia-Pacific Countries Get How-To Update on Tourism Satellite Accounts

BANGKOK – Asia Pacific countries have take yet another step on the long and arduous road towards setting up a Tourism Satellite Account (TSA) with the conclusion last week of a major meeting designed to show them exactly how to go about it.

The meeting, organised by the World Tourism Organisation (WTO) and the United Nations Economic and Social Commission for Asia-Pacific, brought together 30 countries to explore the complicated accounting process by which to identify exactly what tourism means for a country’s GDP, balance of payments, foreign exchange earnings and very significantly, jobs.

The eventual goal of this effort is to set up a unified system of accounting that is comparable across all UN member countries and helps the tourism industry build a case both for higher marketing budgets as well as for stepped up efforts to conserve the cultural, environmental and natural resources that attract visitors in the first place.

Said Mr Harsh Varma, the WTO’s chief representative for Asia-Pacific, “We expect that tourism will – at last – receive from governments and financial institutions the consideration and treatment that its leverage in national economies justifies…By using this new reporting system, national tourism administrations will be equipped with a strategic tool to better formulate their marketing and development plans.”

One of the most advanced TSA systems has been set up by the Canadian Tourism Commission whose research director Mr Scott Meis told the meeting about some surprise findings that the Canadian TSA helped uncover after it was completed in 1991.

For example, the Canadians found that 99% of all tourism businesses in all industries within the sector were small and medium sized enterprises. Travel & tourism also creates 1.4 million direct and indirect jobs. Various fees and taxes paid by the industry netted the Canadian government C$15.4 billion in 1999.

The TSA was able to pinpoint 5.3% of national and provincial government revenues coming from tourism, and 2.1% of all municipal revenues. Roughly C$23 of every C$100 spent by visitors to Canada ended up as Government revenues. It was found that 29% of tourism jobs are in the food & beverage industry and accommodation 27%.

“These results alone influenced a decision of the national government to increase the federal share of our national tourism marketing budget by an additional C$15 million,” Mr Meis said.

Canada, which began working on its TSA in 1984, has now got an agreement with the World Tourism Organisation to transfer its expertise world-wide. The meeting here last week was the first of its kind in the Asia-Pacific at which Mr Meis and a number of other Canadian experts outlined the detailed methodology and answered questions about setting it up.

The process is not easy, fraught with complications about definitions of both economic and tourism terminology, building of databases, categorisation of various products and services, development of input-output tables, etc. It also needs to be managed by trained people.

The most important element is quality of data. Putting together an accounting system involves national statistical offices, the central bank and many other data-collecting government agencies. In Asia-Pacific, the quality of data collected from country to country is so huge that it could be a long time before any of the Mekong or South Asian countries get a TSA together.

At the moment, the travel & tourism industry measures its performance by easily-trackable indicators like visitor arrivals and random surveys to check expenditure. While the arrival-figures, based on Immigration arrival/departure cards, are quite reliable, the expenditure figures are essentially nothing more than calculated guesstimates, but the only source of data nevertheless.

A statistical expert from the International Labour Organisation noted, for example, the various ways of calculating the impact on jobs, income and conditions of work. Some data may come from household censuses, others from government administrative records, but both data-sources have pros and cons, and will need to be extensively fine-tuned to ensure they are timely, valid, reliable and precise.

Thailand is in the first year of a projected five-year plan to finalise a TSA. The academic team is headed by Dr Kitti Limsakun of Chulalongkorn University who made a presentation to the meeting outlining his experience in putting together the TSA.

So far, Thailand estimates that in 1999, tourism earned the country 253 billion baht and accounted for 5.4% of GDP. Direct and indirect employment is calculated at 3.4 million jobs, or 11% of total employment. At present growth rates in visitor arrivals, Thai tourism will employ 4.8 million people by 2010.

The World Tourism Organisation says it knows of 47 countries that either have a TSA or are working on one. Other Asia-Pacific countries working on a TSA are Sri Lanka, Singapore, Korea, Philippines, New Zealand, Malaysia, Indonesia, Hong Kong, Brunei and Australia.

In Vancouver this May, the CTC is hosting an international conference on TSA’s, and encouraging participation by banks, financial institutions, consulting companies, research firms and universities.

For all its publicly stated advantages, the TSA system has its critics. Many feel that the system is designed to paint an overall rosy picture of travel & tourism’s contribution to an economy and selectively measures only what is ‘consumed’ by tourists, with little emphasis on the amounts of money that have to be spent on supporting the industry.

Hence, the accounting system does not – at the moment – reflect the huge outflow of money from importation of products and payment of such things as management fees, marketing, reservation and intellectual property charges, nor on payment for aircraft or the heavy-duty capital equipment used by airports.

Mr Meis said that eventually all these may well be factored into the TSA as the process takes its course, and countries become familiar with how the basics work. This stage is only a start, he said.

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