The computation of a Tourism Satellite Account (TSA) may be described as an economic and accounting practice which effectively brings together elements of tourism expenditure and national accounts. The result of this exercise has been described as the “holy grail” of tourism statistics, and describes the contribution of tourism expenditure to gross value added (GVA). However a complete TSA also estimates employment, gross fixed capital formation and other non-monetary indicators of tourism.
At an international level the first steps towards the realisation of a TSA were undertaken under the leadership of the United Nations World Tourism Organisation (UNWTO). With the aid of the Organisation for Economic Co-operation and Development (OECD) and the Statistical Office of the European Commission (Eurostat), UNWTO published the first Tourism Satellite Account: Recommended Methodological Framework (TSA:RMF) in 2000. This publication, updated in 2008, has since been recognised as an international standard for all countries wishing to undertake a TSA project.
The underlying methodology of a TSA is simple yet ingenious, and rests on the economic fundamentals of demand and supply. The demand side of a TSA is made up of individuals’ demand for tourism-related goods and services. Within the Maltese scenario this would incorporate: The expenditure of foreign tourists and same-day visitors while on the island, the pre-trip expenditure of outbound Maltese tourists and expenditure related to domestic tourism. In sum, these figures make up total internal tourism consumption.
On the other hand, the supply side of a TSA requires little dedicated calculations as estimates may be drawn from Supply and Use Tables (SUT) - a well known practice within the system of national accounts. The TSA:RMF pinpoints industries relevant for tourism purposes, thus ensuring coherence and comparability at an international level. The sum of domestic producers’ output and imports gives total domestic supply.
Having gathered this information, the ratio of internal tourism consumption (demand) to domestic supply is basic mathematics. In turn this ratio can be applied to GVA figures for tourism-sensitive industries, thus effectively estimating the GVA brought about by tourism expenditure.
The end result of this calculation is a measure of the role the tourism industry plays in the national economic scenario. Other tables covering employment and capital formation support and enhance this result, thus making TSA a comprehensive and holistic tool in the hands of policy makers. Furthermore since GVA breakdowns are derived at an industry level, it is possible to identify which industries are most responsive to variations in tourism expenditure. This approach may be used to channel investment towards more receptive channels, with the intention of maximising returns.
At a national level more should be done to draw up a national TSA, and the National Statistics Office (NSO) has been working extensively to build the necessary skills and data sources.
Feasibility studies have been carried out and a pilot project is underway. These efforts ensure that the Maltese statistical system will in future be able to provide its users with a fully-fledged system of TSA.
Ms Scott is manager of the Information Society and Tourism Statistics unit at the National Statistics Office.
