Tourism satellite account: General information

About the tourism satellite account We develop and publish the tourism satellite account, using a UNWTO framework, with funding from MBIE. The tourism satellite account is part of a core set of tourism data that provides base information for understanding and monitoring tourism activity in New Zealand. Other elements of the core dataset include a survey of spending by international visitors, regional tourism expenditure estimates, visitor arrival and accommodation statistics, and forecasts of international tourist numbers and expenditure. A tourism satellite account integrates data about the supply and use of tourism-related goods and services into a single format. It summarises the contribution tourism makes to production and employment, and is consistent and integrated with New Zealand’s official national accounts. This ensures that the importance of the tourism sector is measured and understood in the context of the New Zealand economy as a whole. New Zealand’s tourism satellite account (TSA) measures expenditure in New Zealand by both resident and non-resident tourists, and thus gives a picture of the overall size of the tourism industry, including its contribution to gross domestic product (GDP) and employment. Tourism, unlike ‘conventional’ industries such as agriculture or manufacturing that are classified according to the goods and services they produce, is defined by the characteristics of the customer demanding tourism products. Tourism products can cut across standard industry definitions, and therefore require a different approach. Satellite accounts are an extension of the core national accounts, and involve rearranging existing information in the national accounts so that an area of particular economic or social importance can be analysed more closely. As extensions of the core system of national accounts, satellite accounts are an important recommendation of the international standard, the System of National Accounts 2008 (Inter-Secretariat Working Group on National Accounts, 2008). We present both final and provisional estimates in tourism satellite account. The supply and use framework provides a detailed picture of the economy broken down by industry, product, primary input, and final demand categories. It is the starting point for deriving final accounts. To give a more timely picture of the impact of tourism, we prepare provisional TSAs, using fewer data sources than final year estimates. The provisional estimates are presented in a less detailed format, and are updated as relevant data sources become available. As balanced supply and use tables are completed for the relevant years (as part of the ongoing production of the New Zealand System of National Accounts), we replace provisional results with final year estimates. Value added Value added is the ‘value’ businesses add to the goods and services they purchase (intermediate inputs) and use in producing their own outputs. The measurement of tourism’s direct value added, also known as tourism’s direct contribution to GDP, is the major focus of the TSA. As direct value added for tourism is measured on the same basis as that used for industries in the national accounts, it enables a consistent comparison between the tourism industry’s contribution to GDP and that of more traditional industries such as agriculture and construction. Direct value added does not measure the full impact of tourism on the New Zealand economy because it is limited to businesses that have a direct relationship with tourists. Additional value added comes from tourism through producing the intermediate inputs used in producing goods and services sold to tourists, although there is no direct relationship between the producer of the intermediate inputs and the tourist. This additional value added is known as indirect value added. Results Tourism plays a prominent role in the New Zealand economy in terms of producing goods and services and creating employment opportunities. Tourism expenditure includes spending by all travellers, whether they are international, resident householders, or business and government travellers. International tourism expenditure includes spending by foreign students studying in New Zealand for less than 12 months. Impact of COVID-19 The data sources used to derive provisional year figures at the industry, commodity and resultant aggregate level, will be subject to future updates. These updates reflect post-COVID-19 methodological challenges as part of the cycle of annual analysis and updated input datasets. Data presented in the Tourism Satellite Account for the provisional year should be considered initial guidance and may be subject to larger than usual updates. Impact of Managed Isolation and Quarantine (MIQ) Accommodation expenditure in the periods since 2020 continue to be affected by the use of traditional accommodation providers for Managed Isolation and Quarantine (MIQ), and for emergency housing. In line with the definition of a tourist, emergency housing is not considered a tourism activity. While this expenditure is captured on the supply side, an allowance has been made to exclude it from the tourism demand side. As a result, accommodation product and industry ratios are historically lower, which flow through to tourism employment derivations. These derived numbers better reflect ‘employees’ engaged in tourism than those in accommodation industry entities servicing MIQ and emergency housing. Changes in tourism employment derivation The derivation of tourism employment relies on the proportion of tourism expenditure relative to an industry’s output, multiplied by that industry’s employment counts. The substantial loss of international tourism expenditure, along with declines in some domestic tourism expenditure, COVID-19 impacts on industry output, and tourism’s return to date has significantly changed these historically stable industry ratios. Employment counts across industry have also been affected. During COVID-19, some individuals classified as employed were supported by wage subsidy payments. A basic example of the tourism derivation impact is shown below in the table for the air transport industry. Tourism derivation impact – example for the air and space transport industry March year Industry ratio – passenger revenue to industry output Employment counts Applied industry ratio to derive direct tourism employment attribution – number of people employed A 0.86 12,300 10,600 B 0.86 12,600 10,800 C 0.67 10,800 7,200 Based on this, users should interpret tourism employment as employment attributable to tourism, providing one perspective on overall employment that may different from other measures. Definition of a tourist In the context of the Tourism satellite account, the term ‘tourist’ includes travellers who may not typically be associated with the term. In addition to holiday and leisure travel, it covers other visitor activities, such as conducting business, attending meetings and conferences, and arriving for short-term education. Domestic tourism costs Domestic costs incurred by New Zealanders travelling overseas, such as booking fees or commissions paid to a travel agency, are included in domestic travel expenditure. Additionally, purchases of tourism-specific consumer durable goods (such as outdoor equipment) before or after a trip are also counted. en-NZ