The Slovene project of implementation of TSA Institute for the Socio-Economic and Business Evaluation Faculty of Economics, University of Ljubljana dr. Hugo Zagoršek Prepared for the CEI meeting, Dolenjske toplice, 17th-18th October, 2007

ISBE The structure of presentation 1.History of the TSA implementation in Slovenia 2.Basic principles and sources used 3.Challenging issues 4.Techniques for estimating same-day tourists’ consumption 1.Characteristics of TSA for Slovenia in year Physical flows 3.Internal tourism consumption 4.Main tourist aggregates 5.Recommendations 6.Lessons learned

ISBE TSA for 2003: methodlogy

ISBE Phases of TSA implementation in Slovenia Feasibility study TSA for year 2000 TSA for year 2003 and extrapolation for year Ministry of the Economy, Directorate of tourism International Institute for Tourism ISBE, Faculty of Economics Statistical Office of the Republic of Slovenia 2009 TSA estimated regularly at 3 year intervals

ISBE Basic principles and specifics of TSA estimation in Slovenia Principles: Following RMF as closely as possible Based on previous studies Upgrading methodology and sources Reliability Transparency Specifics: 1)Small and open economy 2)Diverse attractions and activities 3)Large number of day tourists (both foreign and domestic) 4)Large number of transit tourists 5)Small number of large tourist companies – accessible for personal interview 6)Good existing statistical coverage of tourism 7)Shadow economy?

ISBE Secondary sources Slovenian Tourist organization (visitor surveys) Hiking and mountaineering Sightseeing Spa tourists Cycling, golf … Balance of payments AJPES 1.Accounting database on Slovenian organizations Office for gaming supervision: Data on gambling in Slovenia Statistical Office of the Republic of Slovenia: 1.National Accounts 2.Accommodation facilities, tourist arrivals and overnight stays 3.Survey on tourism travels of domestic population 4.Survey on foreign tourists in the Republic of Slovenia in summer season Visits to selected tourist sights, museums and galleries, swimming facilities, casinos.. 6.Nautical tourism 7.Survey of border crossings 8.Slovenian travel agencies

ISBE Primary sources 1.Interviews with experts from various fields 2.Disaggregated data on types of visitors and their consumption provided by major tourist companies in each TSA category 3.Data on operating margins and expenditure structure provided by major tourist agencies 4.Data on the place of the residence of domestic visitors to casinos and gambling parlors 5.Daily data on the number of cars passing toll stations in Slovenian highways (DARS), data from car counting (DRSC). Crucial for estimation at the lower levels of aggregation. Secondary data is usually too much aggregated for TSA requirements Crucial for estimation at the lower levels of aggregation. Secondary data is usually too much aggregated for TSA requirements

ISBE Challenging issues 1.Travel agency, tour operator and tourist guide services Net valuation – difficult to get data Could not disaggregate in 3 subcategories (travel agency, tour operator, tourist info and guides) 2.Sports and recreational services – many providers, many sources, missing and conflicting information 3.Existing data and surveys not suitable for TSA – not enough monetary information; different categorizations 4.Treatment of goods (e.g. gasoline) – only trade margins 5.Tourism social transfers – what to include and how to estimate it 6.Second home ownership – imputed rents 7.Outbound tourism consumption (TSA Table 3) – could get the total consumption estimate, difficult to disaggregate 8.Collecting primary data is high resource consuming activity

ISBE Techniques for estimating the consumption of same-day tourists (I) Foreign same-day visitors: the problem of detection 1)Sightseeing: based on survey (STO) 2)Activities: based on survey (STO, SORS) 3)Gambling: combination of survey and expert estimates 4)Transportation: company records (e.g. airlines), border surveys Distinction between same-day foreign tourists and transit tourists – purpose of visit Transit visitors Types of expenditures: 1)Gasoline 2)Road tools 3)Food, beverages, etc. (convenience shopping) Methods: 1)Cross-border traffic survey as a baseline estimate 2)Traffic-flows estimates and traffic-counting data to determine major transit tourists routes 3)Subtraction of other types of traffic 4)Estimate consumption using data from gas station operators, toll-roads and expert interviews

ISBE Techniques for estimating the consumption of same-day tourists (II) Domestic same-day visitors: the problem of definition. How to operationalize the definition of “usual environment”? How to apply it in practice? Method: Survey data on the number of day trips Data from other surveys Interviews with the experts Most problematic categories: Food and beverage serving services Cultural services Sports and recreational services Gambling

ISBE SLO TSA 2003 overview

ISBE Characteristics of TSA for Slovenia in year Completed in Estimates for 2003 and 2006 (extrapolation). 2.Harmonized with national accounts, but based on additional primary and secondary data 3.Harmonized to a greatest extent possible with the international guidelines (RMF) 4.Inspired by the previous national satellite accounts (for year 2000) but incomparable to them because of different methodological assumptions and different data sources 5.Extended to include calculation of indirect effects: Value added and GDP produced in the national economy due to tourism 6.Estimated TSA tables 1 – 7 and 10. Developed methodology for estimating TSA tables 8 & 9 (not yet estimated) 7.Published in the comprehensive report in Slovenian language with English summary

ISBE Physical flows – arrivals of tourists

ISBE Arrivals and overnights, 2003 Foreign tourists in Slovenia Domestic tourists Domestic tourists abroad Number of trips Number of overnights (official statistics) Number of overnights (from survey)

ISBE Internal tourism consumption

ISBE Structure of internal tourism consumption

ISBE Key tourism aggregates for Slovenia 2003 (m€) Tourism value added 824 Share of tourism value added in the total VA of the economy 3,82% Tourism characteristic industries' VA 678 Other industries' VA 146 Share of tourism characteristic industries in total tourism VA 82,26% Tourism GDP Share of tourism in national GDP (%) 4,94% GDP of Tourism characteristic industries 766 GDP of other industries 462 Share of tourism characteristic industries in total tourism GDP 62,37% Employment in tourism characteristic industries

ISBE Assessment of total economic impact (m€) Tourism value added without domestic business travel706 Tourism GDP without domestic business travel1.093 Total output of the national economy due to tourism2.540 Value added produced in the national economy due to tourism Share of total national value added (%)6,60% GDP of the national economy due to tourism1.921 Share of total national GDP (%)7,72%

ISBE Recommendations for SLO TSA 1)Applying TSA methodology to narrower segments of tourism sector 2)Estimating regional TSA for Slovenia. 3)The needs of TSA should be taken into account in all tourism- related statistical activities, especially survey preparation. 4)Tourism field surveys should gather more monetary data, instead of being mostly limited to physical indicators. 5)More diligence should be focused on same-day visitors. 6)Transit tourism should be researched more in depth. 7)TSA should be extended with estimation of the total “leisure” services and expenditures

ISBE Lessons learned 1)TSA is the most comprehensive methodology for estimating the economic impact of tourism 2)It is difficult to operationalize in practice, since it demands plenty of data, that is not usually available 3)It is necessary to use many assumptions and rough estimates 4)Different researchers may use different methodologies. That may damage the comparability of results over time 5) Transparency of estimating methods and procedures is important 6)TSA estimation is an on-going learning process

ISBE Discussion?

ISBE Contact information: dr. Hugo Zagorsek Institute for socioeconomic and business evaluation Faculty of Economics University of Ljubljana