PP: Inside the Tourism Sector

Class Objectives

• Understand the size of the tourism industry

• Explore the challenges in defining the breadth of the industry

• What does it mean to be a partial-industrialized industry

  Diverse Contributions: The tourism industry includes a wide range of businesses and services, from hotels and airlines to local shops and community services. Many of these entities may not consider themselves part of the tourism sector, even though they provide essential services to tourists.

  Interconnectedness: Tourism relies on various industries, including transportation, hospitality, and retail, which may not be exclusively focused on tourism. This interconnectedness complicates the measurement and classification of tourism as a distinct industry.

  Community and Government Involvement: The tourism experience is often shaped by local communities and government entities, which play a significant role in providing infrastructure and services that support tourism. This involvement further blurs the lines of what constitutes the tourism industry.

  Measurement Challenges: Because tourism is partially industrialized, it poses challenges for accurately measuring its economic impact and employment. Traditional industrial classification systems may not adequately capture the full scope of tourism-related activities.

  Dependent vs. Independent Tourists: The concept also distinguishes between dependent tourists, who rely heavily on organized tourism services, and independent tourists, who may engage with the local economy without significant interaction with the tourism sector.

A question for you all to consider

• As we have already learned, the tourism industry is unique

• That extends to measuring the size of the industry

• In your opinion, what sorts of statistics would you look at?

  Economic Contribution:

  • Tourism GDP: The contribution of tourism to the overall Gross Domestic Product (GDP) of a country or region.

  • Tourism Expenditure: Total spending by tourists, including accommodation, food, transportation, activities, and shopping.

  • Value Added: The value added by the tourism sector to the economy, which accounts for the income generated by tourism-related businesses.

• Employment Statistics:

  • Tourism Employment: The number of jobs directly and indirectly supported by the tourism industry, including full-time, part-time, and seasonal positions.

  • Employment Rate in Tourism: The percentage of the workforce employed in tourism-related jobs compared to the total workforce.

• Visitor Statistics:

  • Arrivals: The number of international and domestic tourist arrivals, which can be broken down by region, country, and purpose of visit (e.g., leisure, business, visiting friends and relatives).

  • Length of Stay: The average duration of stay for tourists, which can impact spending and resource allocation.

• Tourism Infrastructure:

  • Accommodation Capacity: The number of available hotel rooms, vacation rentals, and other lodging options.

  • Transportation Statistics: Data on the number of flights, train services, and other transportation options available to tourists.

• Visitor Demographics:

  • Demographic Profiles: Information on the age, gender, nationality, and income levels of tourists, which can help tailor marketing and services.

  • Travel Behavior: Insights into travel patterns, preferences, and motivations of tourists.

• Sustainability Metrics:

  • Environmental Impact: Statistics on the carbon footprint of tourism, including emissions from transportation and accommodation.

  • Resource Use: Data on water and energy consumption in tourism facilities and the impact on local ecosystems.

• Consumer Sentiment and Trends:

  • Tourism Sentiment Index: Surveys and indices that gauge consumer confidence and sentiment towards travel, especially in the context of global events (e.g., pandemics, economic downturns).

  • Trends in Travel Preferences: Insights into emerging trends, such as eco-tourism, adventure travel, and digital nomadism.

• Market Share and Competitiveness:

  • Market Share: The share of tourism in the overall economy compared to other sectors.

  • Competitiveness Rankings: Assessments of how a destination ranks in terms of attractiveness, accessibility, and overall tourism experience compared to other destinations.

World Travel and Tourism Council

• For 2024, so there are some numbers we can work with

• Global economic contribution of $11.1 trilion (projection)

• Out of 185 countries analyzed, 142 are outperforming previous records

• Generating roughly 348 million jobs globally

• International spending increased 33.1%

About those numbers?

• What is phishy about those numbers?

• Where do they exactly come from?

• Is tourism one singular entity?

• What should we include in our analysis?

• How do you determine if a job is part of tourism?

• The list of questions go on and on

1. What is phishy about those numbers?

• Source Verification: It's crucial to verify the sources of these statistics. If they come from reputable organizations like the World Travel and Tourism Council (WTTC) or the United Nations World Tourism Organization (UNWTO), they are likely credible. However, if the data is from less established sources, it may lack reliability.

• Methodology Transparency: The methodology used to derive these figures should be transparent. If the methods for calculating economic contributions, job numbers, or international spending are not clearly outlined, it raises questions about their accuracy.

• Contextual Factors: Projections can be overly optimistic or pessimistic based on current trends, economic conditions, or unforeseen events (e.g., pandemics, geopolitical issues). Understanding the context in which these numbers are generated is essential.

2. Where do they exactly come from?

• Data Sources: These figures typically come from industry reports, national statistical offices, and international organizations that analyze tourism's economic impact. For example, the WTTC publishes annual reports on the economic contribution of travel and tourism.

• Research Methodologies: The data may be collected through surveys, economic modeling, and analysis of spending patterns, as well as input-output models that assess the direct and indirect impacts of tourism on the economy.

3. Is tourism one singular entity?

• Complexity of Tourism: No, tourism is not a singular entity. It encompasses a wide range of sectors, including transportation, accommodation, food and beverage, attractions, and various services. Each of these sectors operates independently and has its own dynamics, making tourism a complex and multifaceted industry.

• Diverse Stakeholders: Different stakeholders, including government agencies, private businesses, and local communities, play various roles in the tourism ecosystem, further complicating the notion of tourism as a single entity.

4. What should we include in our analysis?

• Economic Impact: Include direct, indirect, and induced economic contributions of tourism, such as GDP contribution, job creation, and tax revenues.

• Visitor Statistics: Analyze data on tourist arrivals, spending patterns, and demographics to understand market trends.

• Environmental and Social Impacts: Consider the ecological footprint of tourism, including resource consumption and environmental degradation, as well as social impacts on local communities.

• Sectoral Breakdown: Examine the performance of different sectors within tourism (e.g., hospitality, transportation) to identify strengths and weaknesses.

• Trends and Challenges: Assess emerging trends (e.g., sustainable tourism, digital nomadism) and challenges (e.g., overtourism, economic downturns) that may affect the industry.

5. How do you determine if a job is part of tourism?

• Direct vs. Indirect Employment: Jobs can be classified as direct tourism employment (e.g., hotel staff, tour guides) or indirect employment (e.g., suppliers to tourism businesses, local shops benefiting from tourist spending).

• Tourism-Related Revenue: If a job is in a sector that derives a significant portion of its revenue from tourism (e.g., restaurants near tourist attractions), it can be considered part of the tourism industry.

• Statistical Classifications: Use tourism satellite accounts (TSAs) and standard industrial classifications (SICs) to categorize jobs and determine their relevance to tourism.

Importance of Definition

Think back to first lecture. Why are we so interested in defining tourist and more specific forms?

Grab a piece of paper. Why do we need a strong definition of tourism industry?

Clarity and Consistency

• Standardization: A clear definition helps standardize terminology across different sectors, organizations, and countries, facilitating better communication and understanding.

• Data Collection: Consistent definitions are essential for accurate data collection and analysis, allowing for reliable comparisons and assessments of tourism's impact.

2. Policy Development

• Informed Decision-Making: Policymakers need precise definitions to create effective tourism policies, regulations, and strategies that address the specific needs and challenges of the industry.

• Resource Allocation: Clear definitions help governments and organizations allocate resources effectively, ensuring that support and funding are directed to the appropriate sectors.

3. Economic Measurement

• Economic Impact Assessment: Defining the tourism industry allows for accurate measurement of its economic contribution, including GDP, employment, and tax revenues, which are vital for economic planning and development.

• Tourism Satellite Accounts (TSA): A strong definition is necessary for the development of TSAs, which provide a comprehensive framework for measuring tourism's economic impact.

4. Market Understanding

• Consumer Behavior Analysis: Understanding who qualifies as a tourist and the different forms of tourism helps businesses tailor their offerings to meet the specific preferences and behaviors of various market segments.

• Targeted Marketing: Clear definitions enable more effective marketing strategies by identifying target audiences and their unique needs.

5. Sustainability and Management

• Sustainable Practices: Defining tourism helps identify the environmental and social impacts associated with different forms of tourism, guiding the development of sustainable practices and policies.

• Crisis Management: In times of crisis (e.g., pandemics, natural disasters), having a clear definition allows for better management and recovery strategies tailored to the tourism sector.

6. Academic and Research Purposes

• Theoretical Frameworks: A strong definition provides a foundation for academic research and theoretical frameworks, enabling scholars to study tourism phenomena systematically.

• Interdisciplinary Collaboration: Clear definitions facilitate collaboration between different disciplines (e.g., economics, sociology, environmental science) in tourism research.

Issues with Definition

• In terms of definition for industry, historically rooted in manufacturing

• Manufacturing definitions only need to consider firms producing a single product and competing

• Tourism falls outside of that approach

• The other issue is that many so-called tourist industries dabble outside of tourism

• Let’s take a look at an example of this..

Partial Industrialization

• What does this mean?

• Highlights the complexity of the tourism industry

• Tourism industry has direct components, semi-direct components, and unaffiliated components.

• Also impacts how we understand and define tourists. How?

• Somebody define for me

Partial Industrialization in Tourism

Definition: Partial industrialization in tourism refers to the concept that the tourism industry is not fully industrialized like traditional manufacturing sectors. Instead, it consists of a mix of direct, semi-direct, and unaffiliated components that contribute to the overall tourism experience. This complexity highlights the diverse nature of tourism and the various stakeholders involved in delivering tourism products and services.

Key Components of Partial Industrialization

• Direct Components:

  • These are businesses and services that are primarily focused on serving tourists. Examples include hotels, airlines, travel agencies, and tour operators. These entities exist specifically to cater to the needs and wants of tourists.

• Semi-Direct Components:

  • These include businesses that serve both tourists and local residents. For instance, restaurants, shops, and transportation services may cater to both groups. While they derive a significant portion of their revenue from tourism, they are not exclusively tourism-focused.

• Unaffiliated Components:

  • These are sectors that do not primarily serve tourists but still benefit from tourism-related activities. Examples include local markets, public services, and community resources that may see increased demand due to tourist presence.

Implications for Understanding and Defining Tourists

• Broader Definition of Tourism:

  • The concept of partial industrialization necessitates a broader definition of tourism that goes beyond just the direct services provided to tourists. It encourages the inclusion of semi-direct and unaffiliated components in understanding the tourism ecosystem.

• Understanding Tourist Behavior:

  • Recognizing the various components of the tourism industry helps in understanding tourist behavior and preferences. Tourists may interact with a wide range of services and businesses, influencing their overall experience and satisfaction.

• Impact on Policy and Management:

  • Policymakers and tourism managers must consider the interconnectedness of these components when developing strategies for tourism development, sustainability, and crisis management. This understanding can lead to more effective policies that address the needs of all stakeholders involved in tourism.

Economic Mombo-Jumbo

• From an economic and political standpoint, want to able to put tourism into well defined specific categories accommodation for example

• Because tourism does not exist in easy sectors, this cannot be done

• Does not produce one product, in one market, etc

Tourism Satellite Accounts

• Instead of seeing tourism as a singular entity, understand that tourism impacts come from numerous areas

• TSA’s look at economic impacts from delineated industry

• Utilize concepts/definitions to investigate economic impact of tourism

Measuring employment

• Always interest in measuring the size of employment in tourism

• Based on the earlier conversation, how is this problematic

• Goes back to many of the issues we have explored today

  1. Lack of Clear Definitions

  • Ambiguity in Classification: The tourism industry is not universally recognized as a distinct industry in standard industrial classifications (SIC). This ambiguity makes it difficult to categorize jobs accurately as "tourism jobs." Many businesses that serve tourists (e.g., restaurants, shops) also cater to local residents, complicating the identification of tourism-specific employment.

  2. Diverse Nature of Tourism

  • Multiple Sectors Involved: Tourism encompasses a wide range of sectors, including transportation, accommodation, attractions, and services. Each of these sectors may have different employment characteristics, making it challenging to aggregate data meaningfully.

  • Partial Industrialization: As discussed earlier, tourism is partially industrialized, meaning that many businesses involved in tourism do not exclusively serve tourists. This overlap makes it difficult to determine how many jobs are directly attributable to tourism.

  3. Variability in Employment Types

  • Full-Time vs. Part-Time: Employment in tourism often includes a mix of full-time, part-time, seasonal, and informal jobs. Accurately measuring these different types of employment requires sophisticated methodologies that can account for variations in hours worked and job stability.

  • Informal Economy: A significant portion of tourism-related employment may occur in the informal sector, where jobs are not officially recorded. This makes it challenging to capture the full extent of employment in tourism.

  4. Impact of External Factors

  • Economic Fluctuations: Employment in tourism is highly sensitive to economic conditions, seasonal variations, and external shocks (e.g., pandemics, natural disasters). These factors can lead to rapid changes in employment levels, complicating efforts to measure and report on tourism employment accurately.

  • COVID-19 Pandemic: The pandemic has had a profound impact on tourism employment, leading to significant job losses and changes in employment patterns. The need for timely and accurate data during such crises highlights the inadequacies of existing measurement systems.

  5. Data Collection Challenges

  • Inconsistent Data Sources: Different countries and organizations may use varying methodologies for collecting tourism employment data, leading to inconsistencies and difficulties in making international comparisons.

  • Delayed Reporting: Employment data is often reported with a lag, making it difficult to assess the current state of tourism employment, especially in rapidly changing situations.

Take Aways

• There is a lot of mombo jumbo in this chapter

• Having to do with economics, supply and demand, etc.

• For us, the technical stuff is not what should concern us

• Instead, understanding the size of this industry (maybe I should not use that term)

• This clues us into what makes tourism exciting, but at the same time hard to fully grasp

• Should clue us into why many government have a hard time grasping the impact