The 2019–20 State TSA publication presents a comprehensive set of data on the direct and indirect economic contribution of tourism for all states and territories. It builds on the Australian Bureau of Statistics’ (ABS) National TSA.
The report highlights changes in 2019–20, in nominal terms. It also examines longer term patterns in tourism’s contribution to the national, state and territory economies.
ABS System of National Accounts
The ABS System of National Accounts (SNA) does not capture tourism as a single industry, despite it being a high value contributor to Australia’s economy. This is due to the sector’s diverse products and services.
The National TSA bridges this gap by:
- measuring the economic contribution of tourism
- supplementing the SNA.
Comparisons can then be made between:
- the tourism industry’s economic contribution, and
- conventional industries’ contribution within an economy.
Tourism sectors across different countries can also be compared.
Check the ABS’ Australian National Accounts: Tourism Satellite Account methodology for more information on the National TSA.
Sources for data and methodology
The approach in the State TSA is to derive the direct contribution of tourism. It is similar to the approach developed by Pham et al. (2009). Tourism spend data and state/territory industry input-output (I-O) data are combined with the National TSA benchmark. This is to capture the:
- supply of tourism at the state/territory level
- demand for tourism at the state/territory level.
The main sources for the data and methodology are:
- unpublished modelled regional expenditure data from Tourism Research Australia’s:
- International Visitor Survey (IVS)
- National Visitor Survey (NVS).
- I-O database from The Enormous Regional Model (Horridge, Madden & Wittwer, 2003).
- National TSA produced by the ABS (2019).
- Pham, T.D., L. Dwyer and R. Spurr (2009) ‘Constructing a regional TSA: The case of Queensland’, Tourism Analysis, 13, 5/6, pp. 445-460.
- Pham, T.D. and Dwyer, L. (2013), ‘Tourism Satellite Account and Its applications in CGE Modelling’, in Tisdell (ed), The Handbook of Tourism Economics – Analysis, New Applications and Case Studies, Chapter 22, World Scientific Publishing.
- Dwyer, L. and Pham, T.D. (2012), ‘CGE Modeling’, in Dwyer, Gill and Seetaram (eds), Research Methods in Tourism, Chapter 13, Edward Elgar Publishing.
When reconciling the State TSA data to the national target:
- regional spend patterns are maintained
- summing conditions between state/territory and national levels are satisfied.
Indirect and total contribution of tourism
Indirect effects of tourism demand on businesses that provide goods and services to the tourism industry are also measured. For example, the indirect tourism demand generated from supplying a meal to a visitor. This starts with production of what the restaurant needs to make the meal. This might include fresh produce and electricity for cooking.
This approach complements the direct effects presented through the TSA framework. It provides a clearer picture of the total contribution of tourism to the economy. However, they have been calculated using I-O analysis methods. This is because the TSA framework is not designed to measure these indirect effects at state and territory level.
The I-O analysis methods provide a breakdown of the supply and demand of commodities in the Australian economy.
Multipliers for calculating tourism’s indirect effects
Multipliers for standard industries in the Australian and New Zealand Standard Industry Classification (ANZSIC) are used as the basis for calculating tourism’s indirect effects. This is because the tourism sector does not represent a single industry in the economy.
The multipliers measure the individual contribution of industries associated with supplying goods and services to tourists. They provide estimates of the flow-on effects for:
- tourism output
- tourism GVA
- tourism GSP
- tourism employment.
The TERM I-O database also derives the:
- equivalent state and territory output multipliers
- state specific industry level GVA to output
- employment to output ratios.
This database is widely used in Australia. It is the only source available for this information at the state and territory level.
State TSA data are based on TRA modelled regional expenditure estimates. These were derived from IVS and NVS data.
The survey data are allocated to tourism regions using an iterative procedure (TRA, 2013). It takes into account visitors’ reported expenditure on their entire trip in Australia, relative to the nights they spend in different tourism regions in Australia.
Estimates derived from the regional expenditure model show there are large differences in spend patterns across states and territories. As a key input to the State TSA, they are an important contributor in shaping the patterns evident in:
- the estimates of each state and territory
- the shares attributed to specific tourism-characteristic and tourism-connected industries in each state and territory.
Note that the modelled regional expenditure figures are derived from survey data, and there can be some volatility in these estimates. This is particularly the case for:
- smaller states and territories
- spend categories with lower levels of spend.
Modelled tourism expenditure estimates
The State TSA uses modelled tourism expenditure estimates as an input. These are measured at purchasers’ prices. This includes the following components that are not directly related to industries producing goods and services for tourism purposes:
- wholesale, retail margins, and transport margins
- net commodity taxes.
Consumption represents the demand side of tourism, with visitors paying a final price for goods and services. It is mostly measured in purchasers’ prices in this report. This is to reflect the full price paid by tourists for goods and services. Most consumption data in the National Account and State TSA are presented in the same way.
However, it is necessary to use consumption measured at basic prices to measure flow-on effects correctly. If consumption were measured at purchasers’ prices, flow-on effects would be over-estimated by values (such as imports), which are not directly related to domestic production.
Tourism output measures how much demand is satisfied by domestic industries. Often, output is less than total consumption (at purchasers’ prices). This is due to the amount of:
- commodity taxes
- any associated margins needed to facilitate the transfer of goods and services from producers to tourists.
Good examples of this include road and rail transport, and the wholesale and retail sectors.
Only consumption at basic prices is equal to output of the producing industry. This is because all add-on components paid by the consumers are removed (noting the amounts of margins that are re-allocated to the applicable industries to reflect their contribution to tourism consumption explicitly).
Note that in the basic prices category, not all goods and services are now defined as direct output in the new TSA framework. The output of an industry is defined as direct tourism output only when the industry has physical contact with tourists. For example, cafés, restaurants and accommodation.
Items like fuel are not direct tourism outputs. For example, if a tourist spends $98 to fill up their petrol tank, and:
- the cost of fuel is $80
- the cost to run the petrol station is $18.
In this case only $18 is recorded as direct tourism output associated with the retail industry. The remaining $80 is considered to be the cost to the retailer of the domestic good sold to tourists. This would be captured in the flow-on effects to account for the value-adding tourism has generated in the domestic economy.
Read the TSA glossary in the National TSA Methodology on the ABS website.