Tourism Satellite Account: 2009

Tourism value added

 
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Direct tourism value added

Direct tourism value added calculations are made at a finer level of industry detail than is presented in table 8.

The tourism industry ratio is calculated by dividing tourism supply by industry by the total supply for that industry. The tourism industry ratio represents the proportion of each industry’s output that is consumed by tourists.

Tourism industry ratios are multiplied through each production account for all industries to produce direct tourism value added. This is summarised and presented in table 8 for the years ended March 2006–09.

Table 8


Table, Direct Tourism value added. 
Points to note from table 8:


Comparing 2006 and 2009, direct tourism value added (also referred to as tourism’s direct contribution to GDP) increased 5.6 percent, a lower rate than the contribution to GDP from domestic production, which increased by 13.5 percent.


As illustrated in figure 1, total expenditure on goods and services by tourists ($21,737 million in 2009) consists of three components:

  • Direct tourism output of $18,543 million, representing the value of goods and services produced in New Zealand and directly purchased by tourists. Domestic production (in producers’ prices) consisted of $12,180 million of intermediate inputs, and $6,364 million of direct tourism value added.
  • Imports of $1,600 million sold directly to tourists by retailers.
  • GST of $1,594 million paid on goods and services purchased by tourists.


Indirect tourism value added and imports

As well as measuring direct tourism value added, Tourism Satellite Account: 2009 measures indirect tourism value added, or tourism’s indirect contribution to GDP. This indirect measure goes beyond the value added generated by producers directly supplying tourism products, and embraces the total value added of all producers both directly and indirectly.

Measuring indirect tourism value added involves tracing the flow-on effects of businesses’ intermediate purchases that are used directly in producing tourism products ($12,180 million in 2009, see figure 1) and measuring the cumulative value added these purchases generate.

For example, included in the $12,180 million are the intermediate purchases of the accommodation, and cafes and restaurants industries. These include items such as electricity, bedding, and food purchased from other industries or imported. In turn, these other industries will have made intermediate purchases from other industries (or from overseas) in order to produce the items they sell to the accommodation and cafes and restaurants industries. So the sequence continues, until all intermediate purchases can be directly accounted for, either as value added or imports.

Measuring indirect tourism contribution to GDP involves summing the value added of each industry that is generated throughout this sequence. The New Zealand TSA covers the intermediate consumption related to direct tourist expenditure. Total tourism expenditure can be explained in terms of:

  • direct tourism value added
  • indirect tourism value added
  • imports (both those directly sold to tourists and those used indirectly in production)
  • GST.

Note that some of tourism indirect demand for intermediate inputs will not be met by the output of New Zealand producers, but by imports that provide no direct contribution to New Zealand’s GDP.

 
Table 9 summarises the relationship between the various components of tourism expenditure.


 

Table 9

Table, Components of tourism expenditure.


Direct tourism value added does not necessarily show the same movement as tourism expenditure. This is because changes in expenditure patterns flow through into the composition of industries that supply products consumed by tourists.

Changing industry composition flows through into other economic aggregates. This can lead to a result whereby different industries contributing to tourism have varying value added to output ratios.

Movements in the value of imports directly sold to tourists and imports used in the production of goods and services sold to tourists are strongly influenced by exchange rate variations and changes in the mix of products purchased. In the year ended March 2009, these imports increased by 4.3 percent, while total tourism expenditure rose 1.1 percent (see table 9).
 
Alternatively, the components can be presented as their share of total tourism expenditure as shown for the years ended March 2006–09 in table 10.

Table 10

Table, Share of tourism expenditure by component. 

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