Informing tourism policy with statistical data: the case of the Icelandic Tourism Satellite Account^†

† This paper is related to the Icelandic Tourism Research Centre's project ‘The Economic Benefits of Tourism in Iceland' carried out in the period 2013–2015. At the same time, this paper is a revised and substantially extended version of the paper Expanding the Icelandic Tourism Satellite Account and its possibilities of using for tourism policy which was presented at the International Conference in Tourism (ICOT 2015) held in London, 24–27 June 2015. At this conference the paper received the Best Paper Award.

Abstract

The Tourism Satellite Account (TSA) is a popular internationally recognized method for measuring tourism's contribution to the economy. The credibility and visibility of tourism as a distinct economic activity are, therefore, based on TSA data which have the power to show its macroeconomic importance. According to the most recent World Tourism Organization study, 60 countries around the world implemented TSA in one way or another in 2010. However, in the same year, a research carried out by the Organization for Economic Co-Operation and Development revealed that the usage of TSA for tourism policies is rather limited due to specific issues, such as the lack of knowledge about TSA, inadequate international comparability, and timeliness. This paper illustrates several possibilities of using enhanced TSA estimates in the Icelandic context for informing tourism policies. Specific examples are presented of developing data on tourism-related investment (Tourism Gross Fixed Capital Formation) and governmental consumption for selected collective services related to tourism (Tourism Collective Consumption). These improve the usefulness of the TSA as a statistical instrument for sound tourism policies.

Keywords:

• Tourism Satellite Account
• tourism policy
• Tourism Gross Fixed Capital Formation
• Tourism Collective Consumption
• Iceland

Acknowledgements

Special thanks are due to Edward Hákon Huijbens who has reviewed my work in this project.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

† This paper is related to the Icelandic Tourism Research Centre's project ‘The Economic Benefits of Tourism in Iceland' carried out in the period 2013–2015. At the same time, this paper is a revised and substantially extended version of the paper Expanding the Icelandic Tourism Satellite Account and its possibilities of using for tourism policy which was presented at the International Conference in Tourism (ICOT 2015) held in London, 24–27 June 2015. At this conference the paper received the Best Paper Award.

1 A visitor is defined by international standards as being a

traveller taking a trip to a main destination outside his/her usual environment for less than a year and for any main purpose (business, leisure or other personal purpose) other than to be employed by a resident entity in the country or place visited. (WTO, 2008, p. 10)

2 The concept of tourism consumption used in the TSA is larger than the one of tourism expenditure. Actually, besides tourism expenditure (defined as the amount paid for the acquisition of consumption goods and services, as well as valuables for own use or to give away, for and during tourism trips), which corresponds to monetary transactions, it also includes services associated with vacation accommodation on own account, tourism social transfers in kind and other imputed consumption (TSA:RMF, 2008, p. 12).

3 Tourism direct gross value added is the part of gross value added generated by tourism industries and other industries of the economy that directly serve visitors in response to internal tourism consumption (TSA:RMF, 2008, p. 46).

4 Tourism direct GDP is the sum of the part of gross value added (at basic prices) generated by all industries in response to internal tourism consumption plus the amount of net taxes on products and imports included within the value of this expenditure at purchasers’ prices (TSA:RMF, 2008, p. 47).

5 In the national accounts, investment, that is, the purchase of machinery (including software) and buildings (offices, infrastructure, and dwellings) and the constitution of stocks (inventories), is known as gross capital formation. When stock-building (or ‘changes in inventories’) is excluded, leaving only the purchase of buildings and machinery, the result is known as GFCF (OECD, 2006, pp. 23–24).

6 Internal tourism consumption is defined as tourism consumption of both resident and non-resident visitors within the economy of reference. It is the sum of domestic tourism consumption and inbound tourism consumption. Domestic tourism consumption is the tourism consumption of a resident visitor within the economy of reference, while inbound tourism consumption is the tourism consumption of a non-resident visitor within the economy of reference (TSA:RMF, 2008, p. 15).