WELLINGTON, March 7, 2017 — Attempting to understand what visitors spend isn’t always easy. TIA Insight Specialist Steve Riley explores what the different government measures of visitor spend are, how they differ from one another and how tourism businesses can use this information.
Tourism Satellite Account
The TSA provides a comprehensive picture of the role the tourism industry performs in the New Zealand economy. It presents information on the contribution of tourism in terms of economic and employment measures.
The TSA is produced each October by Statistics New Zealand and covers the period year ending March.
Key insight and messages from the year ending March 2016 indicate:
- Tourism is a massive industry
Tourism is a $34.7 billion industry. This is made up of $14.5 billion of expenditure from international visitors and $20.2 billion from domestic visitors. The TSA also shows that of the domestic visitor spend, $15.3 billion is derived from households and a further $4.8 billion comes from business and government spending on domestic travel.
- Tourism is our number one export earner
The industry contributes 20.7% in New Zealand’s total exports of goods and services. The next biggest export sector, dairy products, recorded a 17.6% contribution to export earnings.
- Tourism is a major earner of GST revenue
The tourism sector contributed $2.8 billion in GST revenue, including $1.15 billion from international visitors.
- Tourism is a big employer
332,322 New Zealanders are directly or indirectly employed in tourism – that’s 13.2% of the total workforce.
The tourism sector employs 188,136 directly in tourism, 7.5% of the total number of people employed in New Zealand. People directly employed in tourism tend to work in job roles that are predominantly consumed with working in the tourism industry, e.g. working as hotel concierge.
Just over 144,000 people were indirectly employed in tourism, 5.7% of the total New Zealand workforce. A good example of a person indirectly working in tourism is a person whose role is supplying goods or services to a tourism business, e.g. a supplier providing products to a souvenir shop.
- Tourism is in a period of very strong growth
In the year to March 2016 total tourism expenditure grew by 12.2% from the previous year.
International tourism expenditure was up 19.6%, while domestic tourism expenditure grew by 7.4%.
How to use the TSA
The TSA can be used by tourism businesses as an advocacy tool to reinforce with local/regional stakeholders the critical importance of the tourism sector to the New Zealand economy.
It provides a national picture and reasoning as to why tourism should be embraced as a regional growth tool across the communities of New Zealand.
The TSA provides businesses across the tourism industry with:
- An understanding of total visitor expenditure and the rate of growth for both international and domestic visitor markets
- The industry’s contribution to export earnings
- The value tourism contributes to other sectors of the economy, such as the retail sector
- The number of jobs tourism creates at a national level
Read more detailed information about the TSA.
International Visitor Survey
The IVS is conducted on behalf of the Ministry of Business, Innovation and Employment.
It is a quarterly survey of international visitors, primarily providing a national-level estimate of expenditure patterns of the main international visitor markets.
The results are released around 1.5 months after the reference period, for example year ending December results are normally released in mid-February of the following year.
Expenditure on airfares and international student education is excluded, so it shows a lower level of international visitor expenditure than the TSA.
A secondary purpose of the IVS is to provide information on characteristics and behaviours of international visitors. This includes the activities international visitors participate in, the transport and accommodation types used, and places visited.
The information from the IVS is also used as a key input to the TSA and other Statistics New Zealand economic insight that requires an understanding of the inbound travel market.
The IVS also collects demographic information about international visitors, their motivation for visiting New Zealand, and their satisfaction with their visit to New Zealand.
The IVS also provides data for the Tourism New Zealand Visitor Experience Monitor, which in turn provides the industry with tracking and performance measures on satisfaction and visitor motivations to visit New Zealand.
How to use the IVS
Given the IVS visitor spend is a national estimate and a key input into the TSA, it should be used by operators to gain an indicative understanding of overall visitor expenditure growth. The TSA provides the official, comprehensive measure of tourism’s economic contribution to the New Zealand economy.
The IVS also provides the following:
- Spend level and growth rates by key international market
- An average spend by key international visitor market and the growth of this spend on an annual basis
Read more detailed information on the IVS.
Monthly Regional Tourism Estimates
The MRTEs are calculated by MBIE from electronic and credit card transactions.
The results are released within a month after the reference period, for example March results are released by the end of April. They measure the level of spending by international and domestic visitors in the regions across New Zealand.
Like the IVS, the MRTEs do not capture all visitor expenditure so show a lower level of overall expenditure than the TSA.
The MRTE information can be broken down by regional council or at Regional Tourism Organisation level.
In a November release each year, a full breakdown by territorial authority is provided. This tool provides a measure of both international and domestic visitor expenditure.
The MRTEs can also drill down into tourism spend in different sectors of the economy, for example the accommodation sector vs spending in the retail sector in a regional area.
How to use this information
There is a good opportunity for operators and regional marketers to use the MRTEs to consider intervention strategies for visitor markets that are not performing well but offer potential to their business or regional growth strategies.
This insight product also provides users with a tool to measure and monitor markets that are performing well and delve into opportunities for these markets to spend in more areas of the local economy.
Read more detailed information on the MRTEs.
Bringing it all together
Download this table to see the key differences between the TSA, IVS and MRTEs. These include:
- The TSA is the sole measure to use to understand tourism’s contribution to the New Zealand economy
- The IVS and the MRTEs provide a source of estimated expenditure insight
- The TSA is the main national level tool for measuring tourism employment
- All expenditure tools provide an expenditure measure of the international visitor market
- The TSA and MRTEs provide an expenditure measure of the domestic market
- The TSA is the only tool that includes international airfares and education measures in its overall composition
- The TSA is used as the source to construct the Tourism 2025 aspirational goal of $41 billion annual visitor expenditure by 2025
- The MRTEs are derived as a source of insight that contribute to constructing aspirational goals at a regional level