Tourism Satellite Account (TSA) compilation in Iceland for 2009-2013


0. Registration entry for subjects


0.1 Name

Tourism Satellite Account (TSA) compilation in Iceland for 2009-2013

0.2 Subject area

Tourism, transport and IT

0.3 Responsible authority; office, division, person etc.

Böðvar Þórisson
bodvar.thorisson@hagstofa.is

0.4 Purpose and history

Since these new TSA data were first published in June 2015, it has been reported in all major newspapers and in radio. It has been quoted by politicians, interest groups and tourism associations.
No index for user satisfaction is available. However, a meeting with the Icelandic Travel Association (SAF) the main stakeholder from the private sector took place just before publishing the first TSA data in June, 2015. Further clarifications and answers were provided to SAF in the period August-September 2015. If needed, more addition clarifications will be provided on request.

0.5 Users and application

Since these new TSA data were first published in June 2015, it has been reported in all major newspapers and in radio. It has been quoted by politicians, interest groups and tourism associations.
No index for user satisfaction is available. However, a meeting with the Icelandic Travel Association (SAF) the main stakeholder from the private sector took place just before publishing the first TSA data in June, 2015. Further clarifications and answers were provided to SAF in the period August-September 2015. If needed, more addition clarifications will be provided on request.

0.6 Sources

Detailed data from Balance of Payments statistics (in Iceland named External Trade Statistics) particularly for Travel and -- - Air passenger transportation items
- Production Accounts and other National Accounts data
- Enterprise Accounts Register (EAR) and Value Added Tax Register (VAT Register)
- Detailed data Household Expenditure Survey and Household Final Consumption
- Data from the Financial Management Authority (is. Fjarsysla Rikisins) for travel expenditure in the governmental sector
- Data from the Directorate of Internal Revenue (is. Rikisskattstjori RSK) (data for breakdowns of travel allowances for the governmental sector)
- Icelandic Tourist Board (is. Ferdamalastofa) statistics (Counting of foreign visitors, Commissioned survey for inbound visitors and Commissioned survey for Icelanders)
- Survey on tourism companies carried out by Islandsbankin in 2015 (only data from one sector were used)
- Accommodation statistics carried out by Statistics Iceland
- 2007 - 2008 Travel survey (demand side survey amongst Icelanders) carried out by Statistics Iceland
- Icelandic Tourism Research Centre data on number of cruise passengers
- 2014 GP Wild study entitled Cruise Passengers and Crew Survey - Iceland" (for cruise passengers expenditure)
- Civil Aviation Administration (ISAVIA) data on number of passengers at Icelandic airports
- Registers Iceland data on number of summer houses

In addition to these data sources, special data requests were made to Icelandic airlines, universities, some ferry companies, some big car rental companies, ISAVIA, Icelandic Road and Coastal Administration (is. Vegagerdin). These requests had the purpose to cover the lack of data in some areas to improve and enhance the existing data.

0.7 Legal basis for official statistics

According to the Tourism strategy 2011-2020 accepted by Althingi, the Icelandic Parliament, in June 2011 (Parliamentary Resolution - on a Tourism Strategy for 2011-2020) it is stated that: The national accounts shall always include statistical data on developments in the tourism sector from year to year". TSA, as an extension of National Accounts is meeting this request.

0.8 Response burden

In general, it shouldn't be any burden but if additional information was required (as it was the case of Icelandic airlines) then some burden for the respondents might be noticed. We were told that the data requested are very detailed and involved several calculations, so somehow "a time consuming task" for the respondents. However, after many insistences and perseverance the data were obtained. At the same time one can note that some companies were very reluctant to provide these data.

There is one person dedicated to compile TSA data.

0.9 EEA and EU obligations

The EU regulation No 692/2011 concerning European statistics on tourism: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32011R0692
This regulation stipulates the importance of improving tourism statistics that are an input for TSA even if no TSA data are required yet but it might be the case in the future: "In order to enable assessment of the macroeconomic importance of tourism in the economies of the Member States based on the internationally accepted framework of tourism satellite accounting, showing the effects of tourism on the economy and jobs, there is a need to improve the availability, completeness and comprehensiveness of the basic tourism statistics as an input for compiling such accounts and, if deemed necessary by the Commission, as a preparation for a legislative proposal for the transmission of harmonised tables for tourism satellite accounts"

The EEA agreement, Annex XXI (p. 7): http://www.efta.int/legal-texts/eea
The national legal base is the act on Statistics Iceland and official statistics 163/2007.
· The act in Icelandic: http://www.althingi.is/lagas/nuna/2007163.html
· English summary of the act: http://www.statice.is/About-Statistics-Iceland/Laws-and-regulations

1. Contents


1.1 Description of content

This new Tourism Satellite Account for Iceland provides the following data (in a table format):
- Inbound tourism expenditure by consumption products and classes of visitors (TSA table 1)
- Domestic tourism expenditure by products (TSA table 2)
- Internal tourism consumption by products (TSA table 4)
- Production accounts of tourism industries and other industries (at basic prices) (TSA table 5)
- Total domestic supply and internal tourism consumption (at purchasers' prices) (TSA table 6)
- Number of trips and overnights by forms of tourism and classes of visitors (TSA table 10a)
- International arrivals by modes of transport (TSA table 10b)
- Number of establishments and capacity by types of accommodation (TSA table 10c)

These data provide aggregates and indicators of tourism direct economic contribution at the Icelandic economy following international standards endorsed by the United Nations Statistical Commission, World Tourism Organization (UNWTO), Eurostat and OECD in the document entitled Tourism Satellite Account: Recommended Methodological Framework 2008 (TSA: RMF 2008). The numbering of the tables (placed in parenthesis above) is similar with the one found in the TSA: RMF, 2008.

1.2 Statistical concepts

Concepts and definitions are taken directly from TSA: RMF, 2008 as well as from International Recommendations on Tourism Statistics, 2008 (IRTS, 2008). In some case references from international standards for National Accounts (namely System of National Accounts, 2008 - SNA, 2008) were also provided.

The concepts and definitions refer to: visitor, usual environment, tourist, same-day visitor, trips/tourism trips, tourism (domestic tourism, inbound tourism, outbound tourism), residents/non-residents, establishment, tourism industries, tourism characteristic activities, tourism characteristic products, tourism expenditure (inbound tourism expenditure, domestic tourism expenditure, internal tourism expenditure), tourism consumption (domestic tourism consumption, inbound tourism consumption, internal tourism consumption), Production account, Gross Value Added, Output, Intermediate consumption, Gross Value Added of Tourism Industries, Tourism Direct Gross Value Added, Tourism Direct Gross Domestic Product, Tourism Ratio, Consumption products, Non-consumption products.


Visitor

A visitor is a traveler 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. (IRTS 2008, para. 2.9).

Usual environment

The usual environment of an individual, a key concept in tourism, is defined as the geographical area (though not necessarily a contiguous one) within which an individual conducts his/her regular life routines (IRTS 2008, para. 2.21).

Tourist (or overnight visitor) and Same-day visitor (excursionist)

A visitor (domestic, inbound or outbound) is classified as a tourist (or overnight visitor), if his/her trip includes an overnight stay, or as a same-day visitor (or excursionist) otherwise (IRTS 2008, para. 2.13).

Trips/Tourism trips

Trips taken by visitors are tourism trips (IRTS 2008 para. 2.29).

Tourism

Tourism refers to the activity of visitors (IRTS 2008 para. 2.9).

Domestic tourism

Domestic tourism comprises the activities of a resident visitor within the country of reference, either as part of a domestic tourism trip or part of an outbound tourism trip (IRTS 2008, para. 2.39).

Inbound tourism

Inbound tourism comprises the activities of a non-resident visitor within the country of reference on an inbound tourism trip (IRTS 2008, para. 2.39)

Outbound tourism

Outbound tourism comprises the activities of a resident visitor outside the country of reference, either as part of an outbound tourism trip or as part of a domestic tourism trip (IRTS 2008 para. 2.39(c)).

Residents/non-residents

The residents of a country are individuals whose centre of predominant economic interest is located in its economic territory. For a country, the non-residents are individuals whose centre of predominant economic interest is located outside its economic territory.

Establishment

An establishment is an enterprise, or part of an enterprise, that is situated in a single location and in which only a single productive activity is carried out or in which the principal productive activity accounts for most of the value added (SNA 2008, para. 5.14)

Tourism industries

The tourism industries comprise all establishments for which the principal activity is a tourism characteristic activity. The term tourism industries is equivalent to tourism characteristic activities and the two terms are sometimes used synonymously in the IRTS 2008.

Tourism characteristic activities

Tourism characteristic activities are the activities that typically produce tourism characteristic products. As the industrial origin of a product (the ISIC industry that produces it) is not a criterion for the aggregation of products within a similar CPC category, there is no strict one-to-one relationship between products and the industries producing them as their principal outputs (IRTS 2008, para. 5.11).

Tourism characteristic products

Tourism characteristic products are those that satisfy one or both of the following criteria:
(a) Tourism expenditure on the product should represent a significant share total tourism expenditure (share-of-expenditure/demand condition);
(b) Tourism expenditure on the product should represent a significant share of the supply of the product in the economy (share-of-supply condition). This criterion implies that the supply of a tourism characteristic product would cease to exist in meaningful quantity in the absence of visitors (IRTS 2008, para. 5.10).

Tourism expenditure

Tourism expenditure is 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. It includes expenditure by visitors themselves as well as expenses that are paid for or reimbursed by others (IRTS, para. 4.2).

Inbound tourism expenditure

Inbound tourism expenditure is the tourism expenditure of a non-resident visitor within the economy of reference (IRTS 2008, para. 4.15(b)).

Domestic tourism expenditure

Domestic tourism expenditure is the tourism expenditure of a resident visitor within the economy of reference (IRTS 2008, para. 4.15(a)).

Internal tourism expenditure

Internal tourism expenditure comprises all tourism expenditure of visitors, both resident and non-resident, within the economy of reference. It is the sum of domestic tourism expenditure and inbound tourism expenditure. It includes acquisition of goods and services imported into the country of reference and sold to visitors. This indicator provides the most comprehensive measurement of tourism expenditure the economy of reference. (IRTS 2008, para. 4.20(a)).

Tourism consumption

Tourism consumption has the same formal definition as tourism expenditure. Nevertheless, the concept of tourism consumption used in the Tourism Satellite Account goes beyond that of tourism expenditure. Actually, besides 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 (the focus of tourism expenditure), it also includes services associated with vacation accommodation on own account, tourism social transfers in kind and other imputed consumption. (TSA: RMF, para. 2.25).

Inbound tourism consumption

Inbound tourism consumption is the tourism consumption of a non-resident visitor within the economy of reference.

Domestic tourism consumption

Domestic tourism consumption is the tourism consumption of a resident visitor within the economy of reference.

Internal tourism consumption

Internal tourism consumption: the 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.

Production account

The production account records the activity of producing goods and services as defined within the SNA. Its balancing item, gross value added is a measure of the contribution to GDP made by an individual producer, industry or sector. Gross value added is the source from which the primary incomes of the SNA are generated and is therefore carried forward into the primary distribution of income account. Value added and GDP may also be measured net by deducting consumption of fixed capital, a figure representing the decline in value during the period of the fixed capital used in a production process (see SNA 2008, para. 1.17).

Gross value added

Gross value added is the value of output less the value of intermediate consumption (TSA: RMF, 2008, para. 3.32).

Intermediate consumption

Intermediate consumption consists of the value of the goods and services consumed as inputs by a process of production, excluding fixed assets whose consumption is recorded as consumption of fixed capital (SNA 2008, para. 6.213).

Output

Output is defined as the goods and services produced by an establishment,
(a) excluding the value of any goods and services used in an activity for which the establishment does not assume the risk of using the products in production, and
(b) excluding the value of goods and services consumed by the same establishment except for goods and services used for capital formation (fixed capital or changes in inventories) or own final consumption (SNA 2008. para. 6.89).

Gross value added of tourism industries

Gross value added of tourism industries (GVATI) is the total gross value added of all establishments belonging to tourism industries, regardless of whether all their output is provided to visitors and the degree of specialization of their production process (TSA: RMF 2008, para. 4.86).

Tourism direct gross value added

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, para. 4.88).

Tourism direct gross domestic product

Tourism direct gross domestic product (TDGDP) 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, para 4.96).

Tourism ratio

For each variable of supply in the Tourism Satellite Account, the tourism ratio is the ratio between the total value of tourism share and total value of the corresponding variable in the Tourism Satellite Account expressed in percentage form (TSA: RMF, 2008, para. 4.56).

Consumption products

Products that can belong to individual consumption expenditure of households, as defined in COICOP classification (deducted from IRTS, 2008, para. 5.15)

The consumption products considered by the TSA are divided into tourism characteristic products and other consumption products. Tourism characteristic products are further subdivided into internationally comparable tourism characteristic products and country specific tourism characteristic products. The TSA manual includes a list of the first. Other consumption products are divided between tourism connected products and non-tourism related products. (SNA, 2008, para. 29.97).

In the current TSA compilation for Iceland only international comparable tourism characteristic products are used. No country-specific tourism characteristic products have been established at this moment due to lack of sufficient data. Instead two categories have been created: "Goods purchased from trade activities" and a residual aggregated category entitled "Other consumption products".

Non-consumption products

This category includes all products that by their nature cannot be consumption goods and services and, therefore, can neither be a part of tourism expenditure, nor a part of tourism consumption, except for valuables that might be acquired by visitors on their trips (TSA: RMF, 2008, para. 3.7)

2. Time


2.1 Reference periods

Yearly data for the period 2009-2013.

2.2 Process time

TSA yearly data might be available after one year and a half after the end of reference period. For instance, for 2013, TSA data were available at the end of June 2015.

2.3 Punctuality

Data are released relatively soon after they are compiled.

2.4 Frequency of releases

Two times dissemination until now:
- in June 2015: TSA tables 1, 2, 4 and 5
- in August 2015: TSA tables 6, 10a, 10b and 10c.

3. Reliability and security


3.1 Accuracy and reliability

Accuracy and reliabilty | Nákvæmni gagna og áreiðanleiki
The TSA statistics are computed using different data sources. Hence, accuracy of all the data source can be assessed but referring strictly to the TSA data, the conventional measurements made (i.e. sampling error, non-sampling error) are not applicable.

3.2 Sources of errors

The TSA aggregates on yearly basis are complete for the reference period 2009 to 2013.
However, there are some gaps in the TSA tables at the most detailed level of breakdown. It is believed that these gaps cannot influence greatly the final results.

3.3 Measures on confidence limits/accuracy


4. Comparison


4.1 Comparison between periods

Caution should be taken as the monetary data are in current prices, so the comparability from year to year is not very advisable. However, some comparability can be performed if some indicators are expressed in relative terms (as a share or as a ratio).

4.2 Comparison with other statistics

Due to its nature as a part of National Accounts (NA), TSA is always compared with aggregates from National Accounts.
However, TSA has its own concepts and definitions and some differences with NA also occurs. In this regard, in the TSA table 4 a separate category of internal tourism consumption entitled Employers' expenses for business trips of their employees" was created in order to allow a better comparison and integration with National Accounts aggregates. This is part of Intermediate Consumption according with National Accounts rules but as a specificity of TSA, this category is part of Internal Tourism Consumption (which can be seen as final demand).
The Icelandic TSA data are comparable with similar TSA data from other countries.

4.3 Coherence between preliminary and final statistics


5. Access to information


5.1 Forms of dissemination

All data are published online.

5.2 Basic data; storage and usability


5.3 Reports


5.4 Other information

Coverage - sector

All economic sectors are covered since there might be a theoretical possibility of occurrence of tourism expenditure. However, some industries are more likely to provide goods and services to tourists. These industries were standardized at international level (for international comparability) and were called tourism industries. Tourism industries were identified in Iceland at NACE Rev.2 (ISAT 2008) five digits' level as it follows:

Accommodation
55.10.1 Hotels and similar accommodation, without restaurants
55.10.2 Hotels and similar accommodation, with restaurants
55.20.0 Holiday and other short-stay accommodation
55.30.0 Camping grounds, recreational vehicle parks and trailer parks
55.90.0 Other accommodation

Food & Beverage serving industry
56.10.0 Restaurants and mobile food service activities
56.29.0 Other food service activities
56.30.0 Beverage serving activities

Road passenger transportation
49.32.0 Taxi operation
49.39.0 Other passenger land transport

Water passenger transportation
50.10.0 Sea and coastal passenger water transport;
50.30.0 Inland passenger water transport

Air passenger transportation
51.10.1 Scheduled air transport
51.10.2 Non-scheduled air transport

Transport equipment rental
77.11.0 Renting and leasing of cars and light motor vehicles
77.12.0 Renting and leasing of trucks

Travel agencies
79.11.0 Travel agency activities
79.12.0 Tour operator activities
79.90.0 Other reservation service and related activities

Cultural services
90.01.0 Performing arts
90.02.0 Support activities to performing arts
90.03.0 Artistic creation
90.04.0 Operation of arts facilities
91.02.0 Museums activities
91.03.0 Operation of historical sites and buildings and similar visitor attractions
91.04.0 Botanical and zoological gardens and nature reserves activities

Sport and recreational services
77.21.0 Renting and leasing of recreational and sports
92.00.0 Gambling and betting activities
93.11.0 Operation of sports facilities
93.13.0 Fitness facilities
93.19.0 Other sports activities
93.21.0 Activities of amusement parks and theme parks
93.29.0 Other amusement and recreation activities

In addition to these industries two more categories were created: "Good purchased from trade activities" (corresponding to a sum between ISAT/NACE "46 Wholesale trade, except of motor vehicles and motorcycles" and "47 Retail trade, except of motor vehicles and motorcycles") and "Other services/All other consumption products" (a residual category comprising all the rest of industries, except the above industries, that provides services to tourists. One can see that the former is referring to goods purchased by tourists which have a special treatment in the TSA and in Icelandic TSA as well (i.e. only their retail trade margin generates tourism share and contributes to generation of direct gross value added).

In addition, it has to be mentioned that although theoretically only retail trade activities serve directly tourists, in Iceland there were clear evidences that companies registered as wholesalers are also selling directly to tourists (i.e. petrol stations). Therefore, the wholesale trade was also included together with retail trade activities.

Data compilation
Each TSA table followed a separate and specific compilation procedure.
Detailed credit and debit card data (used by the BoP compilers for estimating Travel item -credit side) were used to create breakdowns by products in the TSA table 1. In fact, excepting the estimation of air passenger transportation, overall a top-down approach has been employed in this table.
However, in the TSA table 2, each TSA product was estimated separately through a specific procedure and using different data sources. A sort of a pure bottom-up approach was used in the compilation of this table.
In the TSA table 4 separate procedures were employed for government and business sectors but the data presented were aggregated in one single category entitled Employers' expenses for business trips of their employees". Different data sources were used even if in some case they might appear outdated (i.e. some breakdowns from Statistics Iceland's 2007-2008 travel survey amongst Icelanders)
Excepting some adjustments for water passenger transportation (in order to include freight companies performing ferries - Samskip and Eimskip) and for disaggregating output of travel agencies related to package tours, all the data for the TSA table 5 were taken directly (and further aggregated) from Production accounts. In addition, due to lack of data no breakdown of output by products was made in TSA table 5.
The core TSA table 6 (where the reconciliation of internal tourism consumption with domestic supply takes place in order to allow the calculation of Tourism Direct Gross Value Added and Tourism Direct GDP) had its own compilations and adjustments particularly for taxes, subsidies and imports. However, one can note some limitations (i.e. only Value Added Tax was considered when disaggregating taxes by tourism products/industries). Also, in this table a residual separate category for non-consumption products was created considering that these products do not generate tourism shares (not being purchased by tourists) which further do not contribute to the calculation of Tourism Direct Gross Value Added and Tourism Direct GDP.

In the TSA table 10 some data were taken directly from corresponding data sources while others were separately compiled; referring to the latter, this was the case of breakdown of international arrivals by air - scheduled vs. unscheduled and bed occupancy for short-term accommodation services (here in order to include not only bed occupancy for hotels and guesthouses but also other types of accommodations such as hostels, apartments, sleeping bag accommodation, huts in the wilderness, private homes).

Comment
Lack of a Supply and Use Table from National Accounts did not make possible the breakdown of output by products. In these conditions, the product classification was in fact rather an industry classification assuming a sort of homogeneity between activities (industries) and the products they produce (a symmetrical approach between industries and products) (However, in reality this is not the case: for instance, many hotels have also restaurants as secondary activities; so in our compilation restaurants belonging to hotels are included in the accommodation industry not in the restaurant industry).
Since from demand side the same approach is envisaged we consider that no significant influence on the calculation of the core TSA aggregates (i.e. Tourism Direct Gross Value Added) is produced.

The disaggregation of package tours and allocation to the corresponding components was made following a demand-side approach in the absence of direct data coming from Icelandic travel agencies. However, it should be noticed that during the time of compilations an attempt was done to involve direct data from travel agencies in this endeavour but this was not successful.

Also, in TSA table 2 no breakdown of domestic tourism expenditure by classes of visitors (tourists vs. day visitors) was possible due to lack of data on domestic day visitors.

In these conditions, new data sources are needed in order to rely on better data inputs. Iceland should urgently start to improve its statistics particularly to:
- Improve the procedure of counting foreign visitors at Keflavik airport (in order to distinguish tourists from other types of travellers with non-tourist purpose of trip).
- Carry out continuous surveys from demand side for inbound visitors and Icelandic residents in order to capture tourism expenditure and other tourism specific variables.
- Produce Supply and Use Tables by National Accounts on a regular basis in order for TSA to be fully integrated with them.
- Initiate a new supply-side survey among Icelandic travel agencies that produce package tours in order to calculate more accurately the distribution of the package tours components.

Related metadata
Additional documentation about the new compilation of TSA for Iceland will be available in the following report entitled: The New Compilation of Tourism Satellite Account in Iceland for 2009-2013: Data sources, Methodology and Results.
This report will be published by the Icelandic Tourism Research Centre at the beginning of 2016.

© Hagstofa �slands, �ann 3-11-2015