Things Statisticians Wanted To Know About the Tourism Satellite Account But Were Afraid To Ask

53 Pages·2012·1.23 MB·English

NATIO NAL STATISTICAL COORDINATION BOARD Date of Release June 2012 Reference Code 2012-001

Things Statisticians
Wanted To Know About
the Tourism Satellite
Account
But Were Afraid To Ask

By
Romulo A. Virola, Regina S. Reyes,
Florande S. Polistico and Aileen S. Oliveros

Presented during the Philippine Statistical Association-
Department of Tourism Annual Conference 2011
26-27 September 2011
Sarabia Manor Hotel and Convention Center
Iloilo City
Table of Contents

I. Tourism statistics and tourism satellite account: An overview . . . . . . . 1

1.1 Trends of tourism: Globally and locally . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Importance of tourism statistics/indicators
and tourism satellite account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

II. Tourism statistics and tourism satellite account:
Methodological framework, concepts and definitions . . . . . . . . . . . . . . . . . . 7

2.1 International frameworks and standards . . . . . . . . . . . . . . . . . . . 7
2.2 Basic concepts and definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Development of the Tourism Satellite Account (TSA) . . . . . . . . . . 11
2.4 The TSA and the System of National Accounts . . . . . . . . . . . . . . . 11
2.5 TSA Tables and Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

III. Philippine Tourism Satellite Account (PTSA) . . . . . . . . . . . . . . . . . . . . 14
3.1 The role of global development in tourism statistics
and TSA in Philippine setting . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 14
3.2 Framework of the Philippine Tourism Satellite Account . . . . . . . . . 15
3.3 Institutional initiatives in the Philippine Statistical System
on the PTSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.4 Data support and relevant agencies in the compilation
of the PTSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.5 PTSA milestones over the years . . . . . . . . . . . . . . . . . . . . . . . . . . 26

IV. Results and discussion (PTSA estimates, 2000-2010) . . . . . . . . . . . . . 28

4.1 Demand side: Tourism consumption/expenditure . . . . . . . . . . . . . 28
4.2 Supply side: Production of tourism goods and services . . . . . . . . 29
4.3 Employment in tourism industries . . . . . . . . . . . . . . . . . . . . . . . . . 30

V. Challenges and areas of future concern . . . . . . . . . . . . . . . . . . . . . . . 31

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
List of Figures

Figure A. Visitor Arrival to ASEAN Countries, 2004-2010 . . . . . . . . . . . . . 4

Figure B. The Philippine Statistical System . . . . . . . . . . . . . . . . . . . . . . . 15

List of Tables

Table A. International Tourist Arrivals by Region . . . . . . . . . . . . . . . . . . . 2

Table B. Visitor Arrivals to the Philippines and Visitor Receipts . . . . . . . . 4

Table C. Visitor Arrivals and Receipts, Boracay……………………………... 5

Table D. Foreign Visitor Arrivals, Boracay, Bali, Phuket …………………… 6

Annex

Annex A Initiatives Towards the Development of Philippine Tourism Satellite
Account
Annex B PTSA Estimates, 2000-2010

Table 1. Inbound Tourism Expenditure by Product, 2000-2010
Table 2. Domestic Tourism Expenditure by Product, 2000-2010
Table 3. Outbound Tourism Expenditure by Product, 2000-2007
Table 4. Internal Tourism Expenditure by Product, 2000-2010
Table 5 Production accounts on tourism industries and other industries, 2000
Table 6a Gross Value Added of Tourism Industries (GVATI), 2000-2010
Table 6b Tourism Direct Gross Value Added (TDGVA), 2000-2010
Table 7 Total Employment in the Philippines and Employment in
Tourism Industries, 2000-2010
Things Statisticians Wanted To Know About the Tourism Satellite Account
But Were Afraid To Ask1

by
Romulo A. Virola, Regina S. Reyes, Florande S. Polistico, & Aileen S. Oliveros

ABSTRACT

Tourism, widely considered as a powerful driver of economic growth is one of the key
priority areas of the Philippine Development Plan 2011-2016. With many attractive
destinations to offer to tourists, tourism is one industry where the country enjoys comparative
advantage. Like any other industry, there is a need to come up with reliable statistics and
indicators by which the industry’s economic contribution can be measured and which will be
useful in the formulation of policies and programs for the sector. However unlike other
industries such as mining, manufacturing, transportation, storage and communication, etc.
which are well-delineated in the classification systems used in the compilation of the national
accounts, tourism cuts across many economic sectors, making it difficult to directly measure
its economic contribution. Using the framework of the Tourism Satellite Account (TSA), it is
possible to quantify the contribution of tourism to the economy within the context of the
Philippine System of National Accounts (PSNA).

The Philippines, through the leadership of the National Statistical Coordination Board
and the Department of Tourism, and in collaboration with many agencies, is one of the
countries that have pioneered the compilation of the TSA. This paper discusses the
development of the Philippine Tourism Satellite Account PTSA), the PTSA conceptual
framework, its operationalization in the Philippine Statistical System (PSS), and some
results.

KEYWORDS: tourism, visitor, economic contribution, system of national accounts,
tourism satellite account, demand perspective, supply perspective

I. Tourism statistics and tourism satellite account: An overview

1.1 Trends of tourism: Globally and locally

Over the decades, the world has experienced continued development because of the
advances in transportation and technology. In addition, the liberalization of trade has made
the world truly global that allows people to transact business in ways previously
unimaginable. With the fast-paced globalization, a person can now travel back and forth to a
neighboring country instantly.

An important industry that has taken advantage of the benefits of the fast-paced
globalization is travel and tourism – a demand oriented industry that cuts across other
industries. A traveler avails of products and services of industries that are related to tourism,
directly or indirectly. A traveler would need transportation and its infrastructures,
accommodation, food and other personal items, souvenirs and indigenous products of the
destination, and services for activities like sports, cultural shows, health and spa treatments,

1 Presented during the Philippine Statistical Association-Department of Tourism Annual Conference 2011,
conducted on 26-27 September 2011 at the Sarabia Manor Hotel and Convention Center, Iloilo City
[1 / 36]
etc. Thus, development of the tourism sector would mean that there has to be a
corresponding development in other industries servicing tourism – from micro to large
business enterprises, without which tourism activities would be unsustainable. Each
destination has to have an environment suitable to tourism, thereby creating opportunities for
other industries to flourish. Travel and tourism has become sort of an umbrella industry,
touching many other production sectors in a country. Therefore, it would be more accurate
to describe tourism not as an industry in its strict definition but as an economic activity that
cross-cuts many industries2.

Tourism plays a role “in fostering global competitiveness on international trade,
wealth creation and regional development” and is recognized for its great potential in helping
countries achieve the Millennium Development Goals set by the international community in
20003, specifically on poverty alleviation (IRTS 2008). Further, tourism can contribute
towards a better understanding and appreciation of the differences and similarities of our
various cultures – towards world peace.

The United Nations World Tourism Organization (UNWTO), the leading international
organization in the field of tourism serves as the global forum for tourism policy issues and a
practical source of tourism know-how. The UNWTO4 describes tourism as an economic and
social phenomenon that has experienced continued growth and diversification to become
one of the largest and fastest growing economic sectors of the world. The UNWTO5
reported that in 2010, international tourism worldwide rebounded with international tourist
arrivals expanding by 6.6 percent from a decline of 3.8 percent in 2009 (Table A), and grew
at an average of 3.4 percent annually in 2000 – 2010. Over the past decades, in spite of
occasional shocks, international tourist arrivals have shown virtually uninterrupted growth:
from 25 million in 1950, to 277 million in 1980, to 435 million in 1990, to 675 million in 2000.
and 940 million in 2010. For the 6-year period from 2004-2010, tourist receipts grew at an
average of 6.4 percent annually. The report further noted that the overall export income
generated by inbound tourism, including passenger transport, exceeded US$ 1 trillion in
2010, or close to US$ 3 billion a day. Tourism exports account for as much as 30 percent of
the world‟s exports of commercial services and 6.0 percent of overall exports of goods and
services.

Table A INTERNATIONAL TOURIST ARRIVALS BY REGION
(in million)
Average
INTERNATIONAL TOURIST ARRIVALS Market
REGION Change (%) Annual
(in million) Share (%)
Growth (%)
1990 1995 2000 2005 2008 2009 2010* 2010 08-09 09-10* 00-10*
World 435 528 675 798 917 882 940 100 -3.8 6.6 3.4
By UNWTO regions
Europe 261.5 304.1 385.6 439.4 485.2 416.5 476.6 50.7 -4.9 3.3 2.1
Asia and Pacific 55.8 82.0 110.1 153.6 184.1 180.9 203.8 21.7 -1.7 12.7 6.3
Americas 92.8 109.0 128.2 133.3 147.8 140.6 149.8 15.9 -4.9 6.4 1.6
Africa 14.8 18.9 26.5 35.4 44.4 46.0 49.4 5.2 3.7 7.3 6.4
Middle East 9.6 13.7 24.1 36.3 55.2 52.9 60.3 6.4 -4.3 14.1 9.6
* provisional figure
Source: Tourism Highlights 2011 Edition, World Tourism Organization (UNWTO(

2 The International Recommendations on Tourism Statistics (IRTS) 2008 has a list of tourism industries based on the
International Standard Industry Classification (ISIC) Rev 4. .
3 United Nations General Assembly adopted the Millennium Development Goals in its 55th Session on 18 September 2000
4 http://www2.unwto.org/en/content/why-tourism Why Tourism?, UNWTO.
5 http://unwto.org/facts/eng/highlights.htm. Tourism Highlights, Edition 2011, UNWTO. Tourism Highlights presents a concise
overview of international tourism in the world based on the results for the year 2010.
[2 / 36]
The UNWTO's Tourism 2020 Vision recognizes the great potential of tourism, and
forecasts that international arrivals will reach nearly 1.6 billion by the year 20206. But while
the positive contributions of tourism are obvious, it is recognized that “tourism, like many
other activities, might also contribute in creating irreversible damage to the environment,
through pressure on fragile ecosystems, through construction of resorts or roads that destroy
the natural sights and heritage, through the pressure that is exerted on land, water and air
and through diverse processes of all kinds generating pollution, discharge of residuals,
erosion, deforestation, etc.”; it is thus recommended that linking tourism and sustainability be
considered as a priority in further IRTS development. (IRTS 2008)

In the Philippines, tourism is considered a top priority for national development in
view of its potential in boosting the country‟s economy. In recognition of its importance to the
country, a national policy on tourism was passed – the Republic Act Numbered 9593
otherwise known as Tourism Act of 2009. With this Act, the State declares tourism “as an
indispensable element of the national economy and an industry of national interest and
importance, which must be harnessed as an engine of socio-economic growth and cultural
affirmation to generate investment, foreign exchange and employment and to continue to
mold an enhanced sense of national pride for all Filipinos”.

The Philippine Development Plan (PDP)7 2011-2016 has put tourism as one of the
key priority areas that are job generating and where the country enjoys comparative
advantage, and with high growth potential. To enhance the country‟s competitiveness as a
tourist destination, the Plan has identified strategic destination areas for tourism, and listed
down proactive measures that the government needs to undertake which include among
others, the formulation of a national tourism development plan (NTDP) as the framework for
the identification of tourism destinations and products, tourism infrastructure, marketing and
promotion strategies, and basis for the formulation of local tourism development plans of the
local government units (LGUs).

The Department of Tourism (DOT) reported that despite the global, national
economic, political and social upheavals, the tourism sector remained resilient. As a result of
continued efforts to boost the tourism sector, visitor arrivals in the Philippines have been
growing at more than seven percent annually since 2004, reaching 3.52 million visitors by
the end of 2010. Looking at the tourist receipts, income generated from inbound visitors
grew at an average annual rate of 3.8 percent, from US$ 1.99 billion in 2004 to US$ 2.49
billion in 2010 (Table B). Ratio of tourism receipts to total exports averaged 4.2 percent
annually from 2000-2010. Indeed, tourism offers excellent opportunities for economic
growth brought about by the influx of foreign exchange earnings coming from tourist
expenditures

6 http://unwto.org/facts/eng/vision.htm Tourism 2020 Vision is the World Tourism Organization's long-term forecast and
assessment of the development of tourism up to the first 20 years of the new millennium.
7 A plan based on President Aquino‟s “Social Contract with the People” with the vision of achieving inclusive growth, creating
employment opportunities, and reducing poverty.
[3 / 36]
Table B VISITOR ARRIVALS TO THE PHILIPPINES AND VISITOR RECEIPTS
VISITOR ARRIVALS TO THE PHILIPPINES AND VISITOR RECEIPTS
Arrivals Receipts (in million)
Levels % Growth US$ % Growth PhP % Growth
2004 2,291,352 1,990.8 111,569.5
2005 2,623,084 14.5 2,236.1 12.3 123,058.7 10.3
2006 2,843,345 8.4 3,465.0 55.0 177,572.8 44.3
2007 3,091,993 8.7 2,957.1 -14.7 136,664.3 -23.0
2008 3,139,422 1.5 2,428.7 -17.9 106,081.8 -22.4
2009 3,017,099 -3.9 2,235.9 -7.9 106,380.6 0.3
2010 3,520,472 16.7 2,490.2 11.4 112,324.1 5.6
2004-2010 7.4 3.8 0.1
Source: Department of Tourism (DOT)

In terms of market share, the Philippines is slowly increasing its share of world tourist
arrivals from 0.30 percent in 2004 to 0.37 percent in 2010, and to Asia and the Pacific
arrivals from 1.59 percent in 2004 to 1.73 percent in 2010.

However, among our seven ASEAN neighbors, the Philippines has the 2nd lowest
number of visitor arrivals during the period 2004-2010, and shared around 5.0 to 5.2 percent
of visitor arrivals. (Figure A). Malaysia consistently topped the list, receiving on the average
35.9 percent of the total visitors in the region, followed by Thailand with 24.7 percent;
Singapore, 13.8 percent; and Indonesia and Viet Nam with 10.3 percent and 7.0 percent,
respectively. Cambodia ranked seventh, cutting in 3.1 percent of the pie. Worth noting is
that between 2004 and 2010, growth of visitor arrivals in the Philippines was higher than
Singapore, Thailand, and Indonesia.

Figure A. Visitor Arrivals to ASEAN Countries
2004-2010 (% Share)

Cambodia
Philippines
3%
Vietnam 5%

7%
Malaysia

Indonesia 36%

10%

Singapore
14%

Thailand
25%

Source: World Tourism Organization (UNWTO)
[4 / 36]
The DOT reports that of the total of 19.13 million visitors who stayed in
accommodation establishments in 2010, about 14.93 million or 78.1 percent were domestic
visitors, 4.0 million or 20.9 percent were foreign visitors, and 0.2 million or 1.0 percent were
“balikbayan”.

Based on the same set of data obtained from accommodation establishments, the
province of Camarines Sur topped all provinces with 2.3 million visitors in 2010, 48.8 percent
higher than the 1.6 million visitors in 2009. Metro Manila and Cebu province came in next
with 2.3 million and 1.8 million visitors, respectively. Boracay island registered 0.8 million
and Baguio City, 0.7 million visitors. Puerto Princesa City registered the highest growth at
50.7 percent, from 268.9 thousand visitors in 2009 to 405.4 thousand visitors in 2010.

Meanwhile, statistics generated by the DOT Regional Office VI, Boracay, the beach
capital of the Philippines, showed that visitor head count and tourist receipts in the world-
famous island have been consistently increasing for the last 10 years since year 2001. The
highest increase in visitor arrivals was in 2004 with 26.3 percent from 339,434 visitors in
2003 to 428,755. In 2010, Boracay received a total of 779,666 visitors up by 20.0 percent
from 649,559 visitors in 2009. Correspondingly, tourist receipts have been steadily
increasing from PhP 4.9 billion in 2001 to PhP 14.3 billion in 20108 or at an average rate of
12.7 percent (Table C).

Table C. Visitor Arrivals and Receipts, Boracay Table D. Foreign Visitor Arrivals
Boracay, Bali, Phuket

Visitor Arrivals & Receipts, Boracay: 2001-2010 Boracay Bali Phuket

Visitor Arrivals % Receipts Year F oreign Foreign Interntl

Year Foreign Domestic OFs Total Change (in Php) 2001 76,475
2001 76,475 188,332 0 264,807 15.21 4,868,053,004 2002 77,892

2002 77,892 221,600 1,300 300,792 13.59 5,529,579,653 2003 84,747

2003 84,747 251,704 2,983 339,434 12.85 6,239,950,995 2004 121,023 1,525,994
2004 121,023 291,279 16,453 428,755 26.31 7,881,974,666 2005 155,744 1,454,804
2005 155,744 321,893 21,820 499,457 16.49 9,181,717,814 2006 183,427 1,328,929
2006 183,427 340,602 30,152 554,181 10.96 10,187,730,995
2007 208,870 1,741,935
2007 208,870 359,433 28,404 596,707 7.67 10,969,503,464
2008 197,376 2,081,786
2008 197,376 404,807 32,080 634,263 6.29 11,659,910,434
2009 192,873 432,271 24,415 649,559 2.41 11,941,102,921 2009 192,873 2,384,819 1,183,635
2010 278,531 2,546,023 1,692,598
2010 278,531 474,097 27,038 779,666 20.03 14,332,911,944
Source publication: Factsheet, NSCB Region VI Source: Bali - Directorate General of Immigration
Souce of Basic Data: Department of Tourism (DOT) Region VI and Center Statistic Board

Phuket- Phuket Magazine, May 23, 2011

Between the period 2004 and 2010, growth of foreign visitor arrivals in Boracay was
higher than in Bali. However, compared to Bali and Phuket, Boracay received only 0.3
million foreign visitors while Bali and Phuket received 2.5 million and 1.7 million foreign
visitors, respectively, in 2010 (Table D). It should be noted though, that Bali and Phuket
have international ports that provide direct access to travellers.

1.2 Importance of tourism statistics/indicators and tourism satellite account (TSA)

8 Based on NSCB RD6 Factsheet posted on May 12, 2011 http://www.nscb.gov.ph/ru6/FS-Tourism-Boracay2011.htm

[5 / 36]
Like any other industry, there is a need to come up with reliable statistics and
indicators by which we can determine the viability and the performance of tourism.
Qualitative observation is neither suitable nor sufficient for potential investors and for
development planners. The relevance of statistics and indicators is without doubt immense
for those interested in determining the contribution of tourism, whether in the public or the
private sector. According to UNWTO/UNEP9, indicators illustrate the following five (5)
points:

1. Current state of the industry
2. Stresses on the current system
3. Impact of tourism
4. Management efforts and
5. Effect of management actions

For managers and investors, it is important to know the current trends of the industry.
The trends will show what market is flourishing and what market needs attention. The
current state may also indicate the availability of products needed by tourists and what
needs are not being addressed. The steady growth of influx of tourists will mean a
corresponding growth in tourism-related establishments. And a tourism statistical framework
should be able to show that the development of a tourism product is largely dependent on
the characteristics or actions or even the lack thereof of consumers.

Knowing the stresses, impacts, and current state would clarify the goals of the
tourism sector stakeholders. Management interventions are adjustments to the
administration or to the implementation strategy of tourism-related programs or projects.
Reliable data make it possible to make good decisions on the appropriate interventions to
make.

Regular and updated tourism statistics would likewise enable the evaluation of
management efforts and make them more effective. Management of the tourism sector
should be an ongoing spiral of progress as it is with the development of the tourism
statistical system.

The identification of the stresses and impact of tourism to the current system can be
enhanced by a good tourism database. It is important to know for example if the community
is responding well to tourism activities. While it may be true that tourism is a financially
rewarding activity, it may be a threat to the community‟s current sources of basic needs or to
the environment hosting the activity. Limits should be identified and a good measurement
system must be in place. Statistical inferences regarding trade-offs in tourism activities
enable objective decisions and they are helped by the availability and accessibility of a
sound tourism database.

Surely, individual countries have tried in varying degrees to develop ways to measure
tourism. As the IRTS 2008 says, “Tourism Statistics are necessary for designing marketing
strategies, strengthening inter-institutional relations, evaluating the efficiency and
effectiveness of management decisions, and measuring tourism throughout the national
economy”.

Specifically, tourism statistics and tourism satellite accounts provide us the means by
which we can measure the size, economic contribution, and social impact of tourism.

9 UNWTO / UNEP Making Tourism More Sustainable: A Guide for Policy Makers
[6 / 36]
II. Tourism Statistics and Tourism Satellite Account (TSA) Methodological
Framework: Concepts and Definitions

2.1 International Frameworks and Standards

To aid countries in their compilation of tourism statistics, the UNWTO together with
the Commission of the European Communities (Eurostat), Organization for Economic Co-
operation and Development (OECD), United Nations Statistics Division (UNSD), has come
up with international standards in order to make tourism statistics comparable worldwide,
such as the: a) International Recommendations in Tourism Statistics (IRTS), and b) Tourism
Satellite Accounts: Recommended Methodological Framework (TSA: RMF). The IRTS and
TSA: RMF are continuously updated, the latest of which are the IRTS 2008 and TSA: RMF
2008. The Philippines participated in the worldwide consultation on the revision of the IRTS
and the TSA: RMF by providing series of responses to the questionnaires sent by the
UNWTO.

The main objective of IRTS 2008 is to present a system of definitions, concepts,
classifications and indicators that are internally consistent and that facilitate the link to the
conceptual frameworks of the Tourism Satellite Account, national accounts, the balance of
payments and labour statistics, among others. In addition, general guidance with respect to
data sources and data compilation methods is also provided. Complementing the IRTS
2008 in providing practical guidelines to countries in the development of their tourism
statistics, is the IRTS 2008 Compilation Guide.

Because the IRTS 2008 already provides basic conceptual consistency with other
statistical frameworks (IRTS 2008, para. 1.31) such as the 2008 System of National
Accounts (SNA) and the Balance of Payments and International Investment Position Manual
(BPM6), the TSA: RMF 2008 builds upon this consistency and provides an additional
resource to link tourism statistics to the standard tables of the 2008 SNA.

The TSA: RMF 2008 is aimed at integrating the measurement of tourism as an
economic phenomenon within the mainstream of macroeconomic statistics. Its history and
development is strongly related to that of IRTS 2008. Hence, it should be considered from
two different perspectives:

 As a statistical tool that complements the concepts, definitions, aggregates,
classifications already presented in the IRTS 2008, and articulate them into analytical
tables for regions, countries or groups of countries, and at the same time, make
these estimates comparable with other internationally recognized macroeconomic
aggregates and compilations;

 As the framework to guide countries in the further development of the system of
tourism statistics, the main objective being the completion of the TSA, which could be
viewed as a synthesis of such a system.

2.2 Basic concepts and definitions

Tourism satellite account can be viewed from two perspectives, from the demand
side, which refers to the demand for goods and services associated with tourism, and from
the supply side, which refers to the supply of these goods and services.

2.2.1 The Demand Perspective

[7 / 36]