# Tourism Impact

I am trying to estimate the impact of tourism. I am using the following visitor expenditure data per visitor. Shopping \$147.15 Dining 114.45 Entertainment 103.55 Transportation 109 Room 38.15 Misc 32.7 The nunmber of vistors per year is 7.1 miilion I get values of GDP and employment that are very high. What am I doing wrong? I am marging the retail trade event. Thank you for our assistance
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• For the U.S., the average GDP/Output for your tourism sectors is 59% and the Output per Worker is 29k. So, based on the sum of your expenditures (after margining the Shopping and Misc categories) multiplied by 7.1 million, I get an Output of about 3 billion. Multiplying this by 0.59 gives me an approximate direct GDP of 1.76 billion. Dividing the \$3 billion of Output by 29k gives me an approximate direct employment of 103k. If your direct effects differ significantly from these rough calculations using U.S. averages, it may signal something gone awry. The U.S. average GDP/Output for all sectors is 42% and the Output per Worker is 114k - this may help with evaluating your indirect and induced results. Also, I am curious as to which sectors you allocated the Misc expenditures to?
• I grabbed the wrong output/worker number for Jenny, it should have been 71k per worker. So the direct employment should approximate 3,000,000,000/71,000 = 42,000 jobs. Sorry Jenny.
• Thank you very much. I do get nearly the same results as you do. Is this a generally accepted method to estimate the tourism GDP and employment? I have come across articles that use the Satellite account methodology to estimate these numbers. Are there any articles/publications that use the method outlined by you for tourism projects?
• A lot of it will depend on what you assume about the broad expenditure categories of Shopping, Transportation, Entertainment, and Miscellaneous. In these cases, the satellite accounts may help. A keyword search for "tourism" on the forum and homepage should turn up multiple discussions and studies. This short video gives some tips for using the search features on the forum and on our homepage: http://implan.com/v4/index.php?option=com_content&view=article&id=700:search-the-forum&catid=266:faq-videos&Itemid=50 Page 360 of the attached Banking on Nature report may help with disaggregating the Misc expenditures - it has the bridge to IMPLAN used by the National Wildlife Refuges. These Banking on Nature reports are done for a handful of NWRs each year, so there may be a more current one with a more current bridge. I have also attached a guidebook for estimating tourism impacts by Daniel Stynes, a prominent figure in rec/tourism studies for the federal government. [attachment=274]Stynes_1997_GUIDEBOOK_for_Estimating_Economic_Impacts_of_Tourism.pdf[/attachment] [attachment=275]Banking_on_Nature_2006.pdf[/attachment]
• Hi, I am going to estimate the impact of tourism using visitor expenditure data and business data, too. However, I am curious whether i can use IMPLAN to analyse my data although my data will be collected outside US (Malaysia)? TQ.
• Hi Kei Wei, If you have the funding, I would recommend purchasing & modifying our Indonesia model. In general, the US and Malaysia have different income levels, so using a Hawaii model to estimate impacts in Malaysia may over-estimate outcomes such as GDP and Labor Income. Otherwise, you can certainly modify the Hawaii model to better reflect your region. As mentioned in a previous post, we suggest editing your Event fields to better reflect the Output per Worker and Income per Worker relationships in your particular region. You could also Customize the Study Area Data in order to Zero Out any industries that do not exist in your region. As a first attempt you could use your visitor expenditure data to build Events within the Hawaii model in order to assign spending categories to particular Sectors, and then run preliminary results. Instructions on building Events in IMPLAN can be found here. You could then use the Tool Tips in your Events to examine Employee Compensation per Worker by hovering over the Employee Compensation field. You could compare this value to your own knowledge of local industry wage, and if need be, Customize the Labor Income, Proprietor Income and Employment fields to more closely match what you know about industry wages in your region. Instructions for Customizing Events can be found here. We hope this helps you get started.
• Thank you for the helpful advises. I agree with you that I may overestimate the GDP and labor income since the average labor income in Semporna is as low as USD100 per month. In Malaysia, we do not have multiplier at State level. I am wondering how I can get the multiplier for Type II multiplier analysis. Which county data you would recommend me to purchase (Indonesia cases), Bali? As I mentioned earlier, the region I am doing is a small county that focus on diving tourism. If I conduct a visitor’s expenditure, the spending categories should align with the one in IMPLAN, such as 324 Retail Stores - Food and beverage, 411-Hotels and motels, including casino hotels, 413-Food services and drinking places, 421-Dry-cleaning and laundry services? How about business survey data? In Malaysia, it is very hard to get data on tax because they are not willing to disclose. I plan to collect business expenditure data (e.g. employment information, expenditure inside and outside the region, capital). The reason I want to include business survey because it can be treated under final demand column (input output), and businesses data definitely reflect the economy of the region. On the other hands, one of the objectives is to understand the interdependency of economic sectors using input output models, with the assistance of IMPLAN. Now, I still figure out how my questionnaire is likely to be. It would be great if I can get opinions from you and others. Thank you very much.
• Thanks for your quick reply. These are the GDP based on 2011 world bank data in South East Asia Malaysia = 287.9 billion USD Indonesia = 846.8 billion USD Philippines = 224.8 billion USD Singapore = 239.7 billion USD Vietnam = 123.6 billion USD Thailand = 345.7 billion USD I've checked the GDP of a State in Malaysia called Sabah (Semporna is under the state of Sabah), GDP at constant 2000 prices (USD 9.94 million). Sabah has huge land area (73,620 sq.km) while Semporna has only 1144.78 Sq. Km (1.6% of total land area).This is why one of the reason i want to do the study in Semporna as I would like to know how much tourism money is derieved from the state/national GDP. However, the GDP of the study site is unknown. If I use the models as suggested by you, i am sure it will overestimate the results. The only IMPLAN data that closely to Malaysia GDP is Thailand data. Therefore I do not know how I can make assumption based on the statistic i have. I will save my time if i do not need to collect business survey. So, do you mean that i will get the linkages result based on the spending categories? E.g. I will get the linkage info about agricultural sector, manufacturing sector etc although the spending categories do not capture info about those sector? I will read the quick start guides and try to understand it. I am really appreciate your help.
• Hi Kei, We apologize but in a previous post to you we forgot the embedded links, we think these will assist you in being able to modify and model with the IMPLAN data. You can [url=http://implan.com/V4/index.php?option=com_kunena&func=view&catid=81&id=16068&Itemid=35]modify the Hawaii model to better reflect your region[/url]. As mentioned in a previous post. [url=http://implan.com/v4/index.php?option=com_multicategories&view=article&id=724:quick-start-2&Itemid=71]Instructions on building Events in IMPLAN can be found here.[/url] [url=https://implan.com/v4/index.php?option=com_multicategories&view=article&id=568:568&Itemid=14]Instructions for Customizing Events can be found here.[/url] We do also have a Thai data set available with data from 2005 if you would be interested. IMPLAN works by looking backward through the supply chain. So there are inter-linkages between industries and these are based on what each industry purchases for their production (e.g. a diving service would need to make purchases of diving gear, boat rental or maintenance, fuel, rent for their offices, payroll etc). This then extends to what other industries are stimulated to purchase as well as the stimulus of payroll spending (the advantage of the SAM Multiplier over the type II which only captures inter-industry transactions). Multipliers are based on what can be purchased locally relative to the geography. If you impact the retail sector (of which there is only one in the OECD data, but the Hawaii data set will list them as Sectors 320-331)you will see only the impacts of the retailers operations, you will not see the impact of what they purchase. If you know what people are buying, we typically recommend impacting the producing Sector and applying Margins, as this will show the impact of the local production of the commodity as well as associated transport, wholesale and retail operations. Thus, as you stated, if you make a purchase of boat services and there are petroleum refineries local to the regional geography of the model, you will see an impact to 115 petroleum refineries. Likewise if a worker goes out and purchases produce as a result of payroll, there will be expenditures to Sector 3 Vegetable and melon farming (Sectors based on U.S. sectoring). Hopefully this helps.
• Thank you for the clear explanation. I am interested to purchase the Thai data, but i gonna discuss with my Professor about the funding since we'd purchased 4 set of data last month. I will follow the case study 12 you suggested to analyse my data. In the coming data collection, I will collect the expenditure of tourists visiting my study area (Semporna) based on the following spending categories as suggested by IMPLAN 1.Hotels 411 2.Food services and drinking places 413 3.Recreation/entertainment services 410 4.Groceries 224 5.Gas & Oil 326 6.Sporting goods 328 7.Souvenirs & other retail 329 8.Transport by water 334 9.Transit and ground passenger transportation 336 10.Scenic and sightseeing transportation and support activities for transportation 338 11.Telecommunications 351 12.Travel arrangement and reservation services 383 13.Dry-cleaning and laundry services 421 1-3, & 13 are classfied as IMPLAN industry? while 4-12 should be classified as IMPLAN commodities? I confuse between transport by water and Scenic and sightseeing transportation and support activities for transportation. For your information, Semporna is a gateway to many marine parks and island resorts.Tourists need take boat to the nearby islands for diving, so which one is more relevant to reflect their spending? Buying internet services and simcard are considered in Telecommunications? Can diving gears refer to Sporting goods? I might face a problem in collecting the expenditure data, because majority of the tourists buy tourism package and they might not know each spending category they have purchased. Looking forward to your advises. Thank you.
• Hi Kei, As regards the Sectors and Sector selection: - We would actually recommend running all these items as an Industry Change Activity unless you have some reason to believe that the tourists are not making these purchases from the primary industry. For example if you ran Grocers as a commodity change you would attributing about 1.5% of the total sales value to Other Government Enterprises. Likewise with fuel 1.35% of the total sales would be attributed to Government Enterprises. As a general rule you would only purchase by commodity if you did not know the type of industry that was making the sale, you just knew how much of a product was being purchased. - If you purchase the OECD Thailand model, please note the Sectoring scheme is not the same and there is only one generalized retail Sector. [url=http://implan.com/v4/index.php?view=article&id=847&option=com_content&Itemid=2]This link will show you the Sectors available in the OECD models[/url]. Because of the higher specificity you may decide that the Hawaii data is a better fit, and as describe earlier you overwrite the relationships if you have regional data. -We would suggest using Sector 334, based on the Help>Sector Search descriptions. If you sort the Sector Search window by "Industry Code" it will order all the Sectors in the model by number, you can then search through the NAICS descriptions associated to that Sector. Based on your description Sector 334 seems most appropriate, but we encourage you to look through both 334 and 338 to confirm what you would consider to the best choice, as you know your industry best. -Internet service providers fall under Sector 351. If the purchase is directly from providers. Using the keyword 'internet' in Help>Search function will allow to see all the Sectors associated to the word 'internet'. As for Sim Cards they appear to be primarily associated to cell phones. Cell phone services are also Sector 351, whereas stores are Sector 322. So you will want to choose based on what you feel the customer is buying the card itself or a related service. -Diving gear, in reference to a retail store front (using diving in the Help>Sector Search) is Sector 328. Diving services are under 389, and manufacturing is 311. Again for any purchases from a retail store, if you have a local producer of that item, you will likely want to choose the producing Sector and margin that Sector rather than the retailer, as described in an earlier post. If a lot of what is done is done through a travel agency, you might consider impacting that Sector (as long as travel agencies have local representation as well. Travel agencies are Sector 383. Please let us know if you have any additional questions.
• Also, just one last thought on model selection. GDP is just one indicator you could use to justify model selection. Economic impact results are also sensitive to the industry mix and wage level within an economy. As such, you could pick a model based on these indicators as well. Ultimately, it is up to the researcher to decide which economy is best fitted to their modeling exercise. This may mean undertaking a little research on your part to determine which of these countries or territories makes the best proxy for your research project. If you think Thailand represents your region better than these other territories, then it may be a better choice. If Thailand's wage level and industry mix are similar to your region then you probably won't be over-estimating that much.
• Hello Kei, We apologize if we made this confusing. You will want to restrict the purchases that you initiate the model with using Events to what you know tourists spend money on. This does not however, that industries involved with boat construction might not see impacts in the indirect and induced because of the backward linkages. As regards Margins, your survey will likely give you an idea of how much was purchased at a specific type of store. In this case you will want to use retail sectors(in HI model). You will see that the initial value entered into industry sales will be larger relative to the results. This is because of the Margins. When using retail sectors, the Model will ask if you want to Margin the value, you will select the Gross Retail Sales, which represents the price consumers will pay. When you margin this way, you are capturing the operations of the retail store only since you cannot go farther back of the supply chain. This is because you don't know exactly what is being sold, and whether or not it's produced locally. However, in some circumstances you may know what is purchased and that is when you would start from the producing sector. You would still start with the value paid by the tourists, but in this case, you would manually apply Margins. [url=https://implan.com/v4/index.php?option=com_multicategories&view=article&id=567:567&Itemid=71]Event Options[/url]> Edit Event Properties>Margins> Yes;you will also want to set LPP=SAM unless you know the amount of local production. The process of applying margins manually like this breaks out the retail from the wholesalers, transporters (etc) and assigns each portion of the product sales value. You may also want to go into the Event Options> Edit Event Properties>Margins>Edit and modify the Local Purchase Percentage(LPP) column for retail sectors that receive the sale to 100%. Note that services such as restaurants, land transport services and hotels do not have margins since they are the producer of the service they provide. Please let us know if you have any further questions.
• Sorry for the late reply. I will post my questions regarding to data analysis after my data collection. It is great to know that i can modify Hawaii data to suit my study. In constructing a new model, should i find the population, size of study area, employment number? Inclusive package tour is currently the biggest challenge for me since they will give the total expenditure instead of breaking the expenditure into categories, probably they do not know how much they have paid for each expenditure category. There are 13 expenditure categories identified in my questionnaire: 1. Hotels 2. Food services and drinking places 3. Recreation/entertainment services 4. Groceries 5. Gas & Oil 6. Sporting goods 7. Souvenirs & other retail 8. Transport by water 9. Transit and ground passenger transportation 10. Scenic and sightseeing transportation and support activities for transportation 11. Telecommunications 12. Travel arrangement and reservation services 13. Dry-cleaning and laundry services I am not sure is there any categories i miss out for a diving tourism industry.
• Thank for the reply. Are you saying the Output per Worker and Employment Compensation per worker relationships, as well as Proprietor Income relationships can be generated through visitor's expenditure survey? If i am not mistaken, travel arrangement and reservation services are included in the package tour. I gone through some visitor expenditure studies, airfare is excluded as it is purchased at home country. Please correct me if i am wrong. The reservation services in study region refer to arrangement on land transportation and sea transportation. From my understanding, most of the sporting goods (e.g. diving gear) are provided by dive operators; however it can be purchased in some stores. I have also observed some tourists bought fishing pole. Yes there are few clinics and a government hospital in the town. For your information, there are 3 types of accommodation in my study area, hotels, luxury resorts, budget lodging. There are 4 types of package tour, the package inclusive of the following services: Package 1 (accommodation only) -Airport meeting services -Return land transfer from airport to Semporna -Return speedboat transfer from Semporna to resort -Twin sharing room -Buffet breakfast, lunch and dinner. Package 2 (Dive Package) -Dive in selected locations. -Diving equipment -Budget accommodation -All meals, refreshments and snacks (excluding carbonated drinks & alcoholic drinks) -Boat transfers (Semporna-selected island return) Package 3 (Pay 'à la Carte') -100 RM per fun dive including equipment -150 RM per night dive including equipment and torch rental -50 RM pp per boat snorkel trip -95 RM pp per night twin-share accommodation and food (breakfast, lunch, dinner) -70 RM pp per night dorm accommodation and food (breakfast, lunch, dinner) -50 RM pp boat transport (8am Semporna-Mabul) exclusive of Semporna Jetty fee. -50 RM pp boat transport (4pm Mabul-Semporna) -10 RM pp Semporna Jetty fee. -50 RM pp extra (min 2 pax) if you need a special boat schedule. -Airport transfers: 80 RM per taxi daytime and 100 RM per taxi after 6pm. Package 4 (Semporna Proboscis Monkey & River Cruise) -Return transfer, English speaking guide, light refreshment * 1, dinner * 1, boat river cruise. I will finalize the questionnaire and get back to you for suggestion.Thank you.
• Hi Kei, Sorry for the confusion, we were not suggesting that you would know the Output per Worker or compensation per worker values from your survey. Instead we were saying that if you had concerns in regards to regionalizing your Events, what would affect your Multipliers would be those relationships as opposed to the demographic data. In regards to airfare, we typically see it handled one of two ways. This first is as you suggest with the airfare being excluded, but at least in the U.S. there are fees paid at the destination site by every plane that comes into the gate. Assuming that this is true in Malaysia as well, then you can split the airfare 50:50 between origin and destination, or if you feel that more would be staying at the point of origination because travel agents may be from the home county, you could create your own split, if you still wanted to reflect some local impact from airlines coming into Malaysia. Please let us know if you have further questions.
• Thank you for your reply. I have finalized the expenditure categories for my study site. Please refer to the attachment. I am not sure whether i've assigned the implan industries and commodities correctly. May i know what the industry code for “Other” category is?
• Hello Kei, Your attachment did not seem to go through. Please try sending it to implangroup@implan.com with forum post#: 16208 in the subject line. Thanks!
• I've sent the attachement to the email given. Please check it. Thank you.
• Hi Kei, Thank you for emailing in your Sector selections, and we apologize that is has taken so long to get back to you. For the most part your Sector selections looked great, just one note... you will want to run all the impacts an Industry Change Activity type under the codes you have selected. The one code that we would suggest modifying is the the code for medical care. You are using only 396, unless you don't have any private hospitals in the region, we would recommend examining a mix of expenditures to Sector 396 and 397. If you have a local split that would be ideal, but if not we would recommend using a Household Spending Pattern in the middle income to high income range (to represent tourists) and this split as a means of proxying the split between 396 and 397. You can access these spending patterns through the Activity Options>Import>Institutional Spending Pattern. You had also asked about the other category. This is a write-in field that allows tourists completing your survey to include expenditures that you might not have thought of...say tourists going to local salons or buying jewelry. You would not assign these Sectors until after the surveys were completed and then you would divide the various write-in purchases (using allowing for a few write-ins will provide you the best set of results) in categories and assign sectors to these. Hopefully this helps.
• Hi IMPLAN, I built a model based on the case study 12 on impacts of wildlife tourism. The table demonstrates the average spending of respondents (n=380) and the total visitors during my study period were 90,562 (based on statistic). Each respondent paid for difference expenditure groups and not all respondents spent the same amount of money. For example, only 105 respondents paid social drinks while the remaining did not spend. So the total spending on social drinks was RM8003, average RM21. I calculated the average spending based on those who had spent on the respective expenditure groups. Then, I totaled up the expenditure (RM4038). Am I correct? I just curious since each expenditure groups have different number of respondents. Should I divide by n=380 or based on those who really spent? Did I classify the Industry and Commodity correctly? Thank you. [attachment=541]Table1.docx[/attachment]
• Hello, If you are going to scale all expenditure items to the total number of visitors (90,562), then you need to use the total number of respondents (380) to calculate your averages. So you are correct to have an average expenditure on beverages of RM21. Otherwise, when you scale up to 90,562, you would be assuming that all of the other visitors (90,562 - 380) bought social drinks, which is clearly not a sound assumption. You have done it correctly. If it makes the interpretation clearer, you can state in your report that the average expenditure on social drinks OF THOSE WHO BOUGHT SOCIAL DRINKS was RM76 but that not all visitors consume social drinks.
• It means that I need to divide the spending of each group by n=380 instead of those who had really spent to get the average spending of the particular expenditure groups? The average takes into account only those who had spent or just divide by 380? Please refer to the attachment for the commodity and industry classification, did i classify them correctly. Thank you. [attachment=543]Table1commodityvsindustry.docx[/attachment]
• Hello, This looks good to us. Econ Staff
• Thanks for the reply. You mean that i should divide the expenditure by all respondents (n=380) instead of those who had spent to get the average expenditure of each group?
• Hi Kei Wei. The table you built concerning tourism spending and how you derived the per person expenditures all seems perfectly fine. The table should demonstrate the average spending of respondents (n=380) and the total visitors during my study period were 90,562 (based on statistic). If you are going to scale all expenditure items to the total number of visitors (90,562), then, yes, you should use the total number of respondents (380) to calculate your averages. Concerning the classification of IMPLAN Industries and Commodities, with the exception on “Social Drinks”, you classified all of the expenditures correctly. For social drinks, we would recommend that you use Sector 413 and not Sector 326 to model this impact. We hope this helps.
• Thank you for your reply. If I change to 413, I have two 413 industry, Food services and drinking places, Social drink. Should I aggregate them?