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Tourism’s ConTribuTion To The AusTrAliAn eConomy

1997–98 to 2011–12

Tourism’s ConTribuTion To The AusTrAliAn eConomy

ii

Authors: Jai Kookana and Tien Duc Pham

ISBN 978-1-922106-91-9 (PDF)

978-1-922106-92-6 (Word)

Tourism Research Australia

Department of Resources, Energy and Tourism

GPO Box 1564

Canberra ACT 2601

ABN 46 252 861 927

Email: [email protected]

Web: www.ret.gov.au/tra

Publication date: July 2013

This work is licensed under a Creative Commons Attribution 3.0 Australia licence. To the extent that

copyright subsists in third party quotes and diagrams it remains with the original owner and

permission may be required to reuse the material.

This work should be attributed as Tourism’s Contribution to the Australian Economy, 1997–98 to 2011–12, Tourism Research

Australia, Canberra.

Enquiries regarding the licence and any use of work by Tourism Research Australia are welcome at

[email protected]

mailto:[email protected]

http://www.ret.gov.au/tra

http://creativecommons.org/licenses/by/3.0/au/deed.en

mailto:[email protected]

iv

Contents

Executive summary ............................................................................................ v

Introduction ....................................................................................................... 1

What has changed from the previous report? ............................................................ 1

What is the direct economic contribution of tourism? ................................................. 1

What is the indirect economic contribution of tourism? ............................................... 1

What is the total economic contribution of tourism? ................................................... 2

Tourism’s contribution to GDP and GVA ............................................................. 4

Direct contributions ............................................................................................... 4

Indirect contributions ............................................................................................. 4

Total contributions ................................................................................................ 5

Tourism’s contribution to GVA by industry ......................................................... 6

Indirect GVA in ‗All other industries‘ ........................................................................ 8

Growth in total tourism GVA, by industry ................................................................. 9

Industry share of total tourism GVA ....................................................................... 10

Tourism’s contribution to employment ............................................................. 13

Tourism employment by industry .......................................................................... 15

Indirect employment in ‗All other industries‘ ........................................................... 19

Tourism multipliers .......................................................................................... 19

Tourism multipliers over time ............................................................................... 20

Conclusion ........................................................................................................ 21

References ....................................................................................................... 22

Appendix A: Methodology for calculating indirect contribution ................................. 23

Appendix B: Input-output multipliers and tourism multipliers .................................. 25

v

Tables

Table 1: Relationship between GVA and GDP ............................................................ 4

Table 2: Tourism GVA by industry, 2011–12 ............................................................. 8

Table 3: Industry share in total tourism GVA ......................................................... 11

Table 4: Summary, tourism‘s direct and indirect contribution

to the Australian economy .................................................................................... 14

Table 5: Direct and indirect employment by tourism industries, 2011–12 ................... 16

Table 6: Total (direct and indirect) employment in tourism ...................................... 18

Table 7: Tourism industry multipliers (2011–12) based on

2008–09 input-output tables ................................................................................ 27

Figures

Figure ES1: Key economic indicators, 2011–12 ........................................................ vi

Figure ES2: Output multiplier: Tourism versus other important industries ................... vii

Figure 1: Direct and indirect share of tourism GVA and GDP ....................................... 5

Figure 2: Annual growth in total tourism GDP and Australian GDP ............................... 6

Figure 3: Tourism indirect GVA in All other industries, 2011–12 .................................. 9

Figure 4: Average annual growth in GVA, tourism and all industries,

1997–98 to 2011–12 ........................................................................................... 10

Figure 5: Direct and indirect share of tourism employment ....................................... 13

Figure 6: Direct and indirect employment growth in the tourism industry,

1997–98 to 2011–12 ........................................................................................... 17

Figure 7: Tourism employment in All other industries, 2011–12 ................................ 19

Figure 8: Relationship between tourism product share and tourism output multiplier ... 20

Figure 9: Flow-on effect of tourism consumption ..................................................... 25

Figure 10: Presentation of results .......................................................................... 26

v

Executive summary

This report presents a complete picture of the Australian tourism industry‘s contribution

to the economy. TRA‘s estimates of tourism‘s indirect and total economic contribution

presented in this report complement the latest estimates of tourism‘s direct contribution

from the Australian Bureau of Statistics‘ (ABS) Tourism Satellite Account (TSA)

(ABS Cat. No. 5249.0). Results are presented for the period 1997–98 to 2011–12.

This report reflects revisions in the time series estimates published by the ABS and

revisions in the domestic and international consumption time series published by TRA

(see TRA 2013 for more information). Consequently, the estimates published in this

report are not comparable to the previously published estimates.

While Australia‘s tourism industry suffered a severe downturn during the global financial

crisis (GFC) of 2008–09, the industry showed its resilience by recovering quickly during

the post-GFC period (2009–10 to 2011–12), when tourism Gross Domestic Product

(GDP) increased by 3.9 per cent annually over this period (Figure ES1). In the long term,

total tourism GDP rose at an average annual rate of 4.6 per cent between 1997–98 and

2011–12. Tourism‘s contribution to Australian GDP was $87.3 billion, or 5.9 per cent

share of the Australian economy.

vi

Figure ES1: Key economic indicators, 2011–12

Tourism’s contribution to Australia’s GDP

$87.3 billion

or 5.9% of total GDP

Direct GDP(a) - $41.0 billion

Indirect GDP(b) - $46.2 billion

Growth in total tourism GDP and national GDP

between 1997–98 and 2011–12:

Total tourism GDP* 4.6%

National GDP* 6.8%

*average annual growth

Tourism’s contribution to Australia’s GVA

$77.1 billion

or 5.6% of total GVA

Direct GVA - $37.6 billion

Indirect GVA - $39.5 billion

Tourism’s contribution to Australia’s employment

908,434 persons

or 7.9% of total Australian employment

Direct - 531,900 persons

Indirect – 376,534 persons

As a labour intensive industry, tourism‘s direct employment share of 4.6% was higher than other important industries, such as: Mining 2.2%

Electricity, gas, water and waste water services 1.3%

Wholesale trade 3.6%

Financial and insurance services 3.7%

Tourism consumption expenditure1

$91 billion

Sources: (a) ABS Cat. No. 5249.0 (b) TRA calculations

1 Tourism consumption consists of tourism expenditure (the amount paid by a visitor or on behalf of a visitor for and during his/her trip and stay at the destination) plus imputed consumption by resident and non-resident visitors on tourism-related products, including those sold at prices that are non-economically significant.

vii

Tourism‘s results from another important economic measure, output multipliers, further

highlight the positive outlook for the industry. Tourism‘s total output multiplier was

valued at 1.92 (Figure ES2).

This means that for every dollar that tourism earns directly in the Australian economy, it

generates an additional 90 cents to other parts of the economy. At 1.9, tourism‘s total

multiplier is larger than other important industries such as Mining (1.6), Retail trade

(1.7) and Education and training (1.4).

Figure ES2: Output multiplier(a): Tourism versus other important industries

1.91.7

1.61.5 1.5 1.4

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

Tourism Retail trade Mining Healthcareand socialassistance

Finance andinsuranceservices

Educationand training

Ou

tpu

t m

ult

iplie

r

Sources: (a) TRA calculations using ABS 2008–09 input-output tables (ABS Cat. No. 5209.0)

2 Tourism multiplier value measures the increase in the production of intermediate inputs in the economy (indirect contribution) resulting from a unit increase in consumption of tourism goods and services by the visitors. A high value of this multiplier indicates that a higher indirect value is created in the economy.

1

Introduction

This report is the fifth in the series that measures the broader indirect and total value of

tourism‘s contribution to the Australian economy. It provides estimates for the total

flow-on of output contribution from tourism consumption between 1997–98 and

2011–12. These estimates complement the Australian Bureau of Statistics‘ (ABS) direct

contribution estimates from the 2011–12 edition of the Tourism Satellite Accounts (TSA),

released in April 2013. Together, the estimates present a picture of the full value of

tourism to the Australian economy.

What has changed from the previous report?

This report reflects revisions in the time series estimates resulting from a new

benchmark in respect of the 2009–10 Supply-Use (S-U) tables by the ABS. Revisions to

the domestic and international consumption time series following recent adjustments to

Tourism Research Australia‘s (TRA) National and International Visitor Surveys have also

been incorporated. In addition, TRA‘s estimates of the indirect/flow-on contribution uses

the latest available (2008–09) input-output (I-O) tables from the ABS. Consequently, the

revised estimates in this publication are not comparable to those published previously.

What is the direct economic contribution of tourism?

The direct economic contribution of tourism to the Australian economy, as represented

by the ABS‘ TSA3, occurs where a direct physical or economic relationship exists between

the visitor and producer of the good or service. This is the opposite to the indirect

relationship via the retail sector between tourists and suppliers of goods and services.

The direct contribution of Australia‘s tourism industry primarily refers to the immediate

effect of expenditure made by visitors. For example, an increase in the number of

visitors staying overnight in hotels directly affects sales in the hotel sector. The ‗direct‘

effects are the sales and associated changes in payments for:

wages and salaries

net taxes

supplies and services.

What is the indirect economic contribution of tourism?

The introduction of direct and indirect definitions in Australia‘s TSA framework has

overlapped with similar terminology (not the concept) that has been historically used in

input-output modelling.

The I-O modelling concept on the other hand captures the flow-on effect generated by

the tourism consumption demand (visitor spending plus imputations presented in the

national TSA) on other industries in the supply chain. In this report the TSA direct

concept will remain the same for the flow-on effects for easy comparison.

Using the direct tourism contribution alone will under-estimate the total contribution of

tourism to the economy. In order to account for tourism‘s contribution correctly, the

3 The Tourism Satellite Account (TSA) estimates the value of tourism within the national accounting framework.

A satellite account allows an expansion of the national account for selected areas of interest while maintaining the concept and structures of the core National Accounts methodology.

2

consumptions of TSA direct and TSA indirect tourism output are combined to calculate

the flow-on effects using the I-O multipliers. The flow-on—or ‗indirect‘ effects—are the

changes in supply that result from spending of the tourism industry‘s receipts on goods

and services from other industries. For example:

A visitor purchases a meal from a hotel:

→ the hotel purchases vegetables and meat from a food supplier

→ the food supplier purchases these from a farming company

→ the farming company ‗purchases‘ labour and transport to deliver the produce to

market.

TRA estimates the economic impact of these indirect effects in order to complement the

direct effects that are reported in the national TSA, and to provide a more complete

picture of the economic contribution of tourism. (Refer to Appendices A and B for detail

on the I-O methodology used in deriving the indirect contribution of tourism on output

and employment.)

What is the total economic contribution of tourism?

The total contribution of tourism to Australia‘s economy is simply the combination of

direct contributions (as published in the ABS‘ TSA) and indirect contributions (TRA

estimates). In this report, the total contribution is presented over a fifteen year period;

1997–98 to 2011–12.

TRA‘s estimates of indirect Gross Value Added (GVA), Gross Domestic Product (GDP) and

employment have added significant value to the ABS‘ TSA. By providing a more

complete picture of the role tourism plays in the economy, policy makers have the

means to effectively gauge the value of tourism, and to use this to inform their decision

making.

Interestingly, Australia and New Zealand are the only countries that produce a full set of

indirect estimates for tourism GVA, GDP and employment. New Zealand‘s (NZ) TSA

(2012) reported that in the year ended March 2012:

Tourism‘s total contribution4 was 8.6 per cent to NZ GDP; NZ$6.2 billion (or 3.3 per

cent) directly and NZ$9.7 billion (or 5.2 per cent) indirectly.

Tourism employed a full-time equivalent of 186,900 employees (or 9.6 per cent of

total employment in New Zealand). Of the total employment, around 119,800 were

employed directly and 67,100 indirectly.

However, international governing bodies are recognising the importance of a TSA. The

United Nations World Tourism Organization (UNWTO) (2010) reported that, ―A total of

60 countries have been identified by early 2010 as having already produced or are

currently developing a TSA exercise‖.

4 Statistics New Zealand (2012), when emphasising the importance of estimating the full impact of tourism, states that, ―Direct value added does not measure the full impact of tourism on the New Zealand economy because it is limited to those businesses that have a direct relationship with tourists. Additional value added comes from tourism through the production of the intermediate inputs used in the production of goods and services sold to tourists, although there is no direct relationship between the producer of the intermediate inputs and the tourist. This additional value added is known as indirect value added‖.

3

Estimates in this report are provided in nominal terms unless stated otherwise, with

results presented in combination with the direct contribution reported in ABS‘ TSA

(2011–12). The analysis provides total contribution estimates for tourism GDP, GVA (by

industry) and employment.

4

Tourism’s contribution to GDP, GVA

GVA and GDP are primary measures for economic performance of an industry or the

whole economy. At the industry level, GVA is part of the output measure, accounting for

the sum of an industry‘s output less the costs of intermediate inputs used in the

production (of that good or service). The remainder is the value-added from the

industry. Thus, GVA is always smaller than total output and reflects more accurately the

contribution of an industry to the whole economy, as this amount is not distorted by the

output of other industries. GDP is built upon the GVA measure. GVA and GDP are

presented in simple formulas below and illustrated in Table 1.

GVA Compensation of employees + gross operating surplus + other taxes on

production

GDP GVA + net taxes on products (taxes less subsidies)

Table 1: Relationship between GVA and GDP

Direct contribution ($ billion)

Output (basic prices) 90.9

GVA 37.6

Net taxes on products 3.4

GDP 41.0

Source: ABS Cat. No. 5249.0

Direct contributions

According to the latest TSA (2013):

Tourism consumption (at basic prices)5 was $90.9 billion in 2011–12, representing

an annual increase of 6.0 per cent.

The direct GDP contribution of Australia‘s tourism industry in 2011–12 was

$41.0 billion, representing an annual increase of 5.3 per cent.

Tourism GVA, or net income generated by the industry, amounted to $37.6 billion,

also representing an annual increase of 5.3 per cent.

Indirect contributions

In 2011–12, Australia‘s tourism industry indirectly contributed a further $46.2 billion of

GDP and $39.5 billion of GVA (Figure 1 and Table 2). The indirect GDP and GVA

contribution by the tourism industry accounted for 3.1 per cent and 2.9 per cent of

national GDP and GVA respectively.

5 This is the price received by the producers after deducting margins, net commodity taxes and imports from the price the tourists actually paid on the market to obtain goods and services. Thus, value of consumption measured at the basic prices equals the value of output produced.

5

Total contributions

Combining tourism‘s direct and indirect components, a total of $87.3 billion was

contributed to national GDP in 2011–12, up $5.5 billion (or 6.8 per cent) year-on-year.

Figure 1: Direct (a) and indirect (b) share of tourism GVA and GDP

44

45

46

47

48

49

50

51

52

53

54

GVA GDP

Per cent

Direct Indirect

Sources: (a) ABS Cat. No. 5249.0, (b) TRA‘s estimates

Collectively, tourism‘s direct and indirect contributions amounted to around 5.6 per cent

of total GVA. Tourism‘s direct measure contributed around 2.7 per cent, while another

2.9 per cent is estimated to be tourism‘s indirect contribution. When compared to 2000–

2001—when tourism‘s total contribution to Australia‘s GDP peaked at 8.3 per cent—this

represents a decline of 2.7 percentage points. However, the Sydney Olympic Games and

the introduction of the Goods and Services Tax (GST) were influencing factors during this

period.

Total tourism GDP has more year-to-year fluctuations than Australian GDP. In 2011–12,

total tourism GDP increased by around 6.8 per cent on the previous year and reflected a

solid recovery after the severe downturn associated with the global financial crisis in

2008–09. Over the longer period between 1997–98 and 2011–12, total tourism GDP has

risen at an average annual rate of 4.6 per cent, while Australian GDP has increased at a

stronger rate, averaging 6.8 per cent annually over the same period (refer Figure 2).

6

Figure 2: Annual growth in total tourism GDP and Australian GDP

Sydney Olympics

SARS

GFC

-2.00000

0.00000

2.00000

4.00000

6.00000

8.00000

10.00000

12.00000

14.00000

19

98

-99

19

99

-00

20

00

-01

20

01

-02

20

02

-03

20

03

-04

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

20

10

-11

20

11

-12

An

nu

al c

han

ge (

pe

r ce

nt)

Total Tourism GDP Australian GDP

Source: TRA‘s estimates using total GDP from ABS Cat. No. 5204.0, direct contribution estimates from ABS

Cat. No. 5249.0, 2011–12, and indirect estimates by TRA

Tourism’s contribution to GVA by industry

Tourism comprises many supplying industries. Each industry‘s contribution to tourism

varies depending upon how closely they are related to tourism. Some of the industries

interact heavily with visitors, such as Cafés, hotels and restaurants. Other industries

work in the supply line to the tourism industry such as Manufacturing, Agriculture,

Forestry and fishing and the Wholesale trade industries, which interact with tourism

more indirectly.

Tourism‘s indirect contribution to GVA is larger than its direct contribution. In 2011–12,

of the total GVA ($77.1 billion) contribution of the tourism industry, 49 per cent was

contributed directly and 51 per cent indirectly.

Tourism has a GVA multiple of 1.056, based on the ratio of tourism indirect value added

and direct value added. A multiple value greater than one indicates the industry‘s

indirect contribution to tourism is larger than its direct contribution. In 2011–12, tourism

generated $39.5 billion worth of GVA indirectly to the Australian economy, in addition to

its direct contribution of $37.6 billion.

The Ownership of dwellings, Accommodation and food services, Retail trade, Arts and

recreation, Education and training and Air, water and other transport services industries

had direct contact with visitors, therefore had a larger direct contribution.

These industries also generated some indirect value added. For example, most of the

services provided by a restaurant are by direct contact, but the services of a baker or

wholesaler providing the raw material such as bread, flour, rice, meat etc is considered

indirect.

6 GVA multiple is the ratio of indirect GVA to direct GVA and is not a multiplier. Indirect GVA for tourism is calculated using the ratio of Industry GVA to Gross Output from input-output tables and multiplying this ratio to the indirect output relating to tourism in an industry.

7

The following four industries7 collectively contributed more than three quarters of total

direct GVA in 2011–12 (Table 3):

Accommodation and food services – $12.9 billion, or 34 per cent of total GVA

Air, water and other transport services – $6.1 billion, or 16.2 per cent of total GVA

Retail trade – $5.2 billion, or 13.7 per cent of total GVA

Education and training – $2.4 billion, or 6.4 per cent of total GVA.

A large part of the total flow-on effect of visitor consumption was felt in other industries

represented by ‗All other industries’, where more than 90 per cent of total GVA

contribution was indirect.

7 Excluding ownership of dwellings industry

8

Table 2: Tourism GVA by industry, 2011–12

Industry Direct value

added(a)

Indirect

value

added(b)

Indirect value

added multiple

(M)

Total value added=

direct value added*

(1+M)

$ million Ratio $ million

Accommodation and food

services

12,923 503 0.0 13,426

Rail transport 509 164 0.3 673

Road transport and motor

vehicle hire and lease

1,759 3,104 1.8 4,864

Air, water and other

transport

6,079 2,455 0.4 8,534

Travel agency and tour

operator services

1,815 2,782 1.5 4,597

Arts and recreation services 1,566 183 0.1 1,749

Retail trade 5,161 1,266 0.2 6,427

Education and training 2,410 272 0.1 2,682

Ownership of dwellings 3,218 0 0.0 3,218

All other industries 2,181 28,757 13.2 30,938

Total tourism industry 37,621 39,486 1.05 77,107

Sources: (a) ABS Cat. No. 5249.0, and (b) TRA‘s estimates

Indirect GVA in ‘All other industries’

All other industries are a grouping of industries that by nature or activity are not

considered tourism-related, but are nonetheless affected by rises and falls in tourism.

For example, increasing visitor numbers to cafés and restaurants increases demand for

flour from grain processing industries; this in turn increases grain production by the

agricultural industry.

Disaggregation of the $28.8 billion of indirect tourism GVA in All other industries in

2011–12 is presented in Figure 3. More than half (52 per cent) of total tourism GVA in

this category occurred in three industries:

Manufacturing - $5.8 billion

Professional, scientific and technical services - $4.7 billion

Finance and insurance services - $4.5 billion.

Additionally, one-third of total tourism GVA was contributed by:

Agriculture, forestry and fishing - $2.6 billion

Information and telecommunication services - $2.5 billion

Wholesale trade - $2.3 billion

Mining - $2.0 billion.

9

Figure 3: Tourism indirect GVA in All other industries, 2011–12

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

Manufacturing

Professional, scientific and technical services

Finance and insurance

Agriculture, forestry and fishing

Information and telecommunication services

Wholesale trade

Mining

Construction

Electricity, gas, water and waste water

Other services

Public administration and safety

Health care and social assistance

Indirect GVA ($ million)

Source: TRA‘s estimates

Growth in total tourism GVA, by industry

Total tourism industry GVA grew at an average annual rate of 4.2 per cent between

1997–98 and 2011–12, compared to 6.9 per cent average annual growth in the whole

economy (Figure 4). In Australia, two industries (Mining and Professional, scientific and

technical services) grew at double digit rates (12.9 and 10.0 per cent, respectively)

between 1997–98 and 2011–12. Together, these industries constituted 17.4 per cent of

total GVA in Australia.

Among tourism industries, only the Education and training industry achieved an average

annual GVA growth of 8.8 per cent. However, this industry represented only a minor

share (3.5 per cent) of total tourism GVA in 2011–12.

A little more than one-third (36 per cent) of tourism‘s total GVA was shared among two

main industries in 2011–12:

Accommodation and food services - 17.4 per cent

Transport, postal and warehousing - 18.2 per cent.

These industries achieved average annual tourism GVA growth of 5.6 per cent and

4.6 per cent, respectively. These rates were much lower than the growth rates achieved

by these industries at total GVA levels. Growth in total GVA for Accommodation and food

services and Transport, postal and warehousing was 6.3 per cent each, indicating that

the non-tourism component showed much stronger growth than the tourism component

of each industry.

10

Figure 4: Average annual growth in GVA, tourism and all industries, 1997–98 to 2011–12

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

Agricu

lture, fo

restry and

fishin

g

Min

ing

Man

ufactu

ring

Electricity, gas, water an

d w

aste services

Co

nstru

ction

Wh

olesale

trade

Re

tail trade

Acco

mm

od

ation

and

foo

d services

Transp

ort, p

ostal an

d w

areh

ou

sing

Info

rmatio

n m

edia an

d te

lecom

mu

nicatio

ns

Finan

cial and

insu

rance service

s

Re

ntal, h

iring an

d re

al estate services

Pro

fessio

nal, scien

tific and

techn

ical services

Ad

min

istrative and

sup

po

rt services

Pu

blic ad

min

istration

and

safety

Edu

cation

and

trainin

g

Health

care an

d so

cial assistance

Arts an

d recreatio

n se

rvices

Oth

er services

Ow

nersh

ip o

f dw

ellings

Total G

ross V

alue

Ad

de

d

Ave

rage

an

nu

al g

row

th r

ate

(p

er

cen

t)

Industry Gross Value Added (tourism and non tourism)

Industry Gross Value Added (total tourism)

Sources: Derived by TRA using total GVA and direct contribution estimates from ABS Cat. No. 5249.0,

2011–12, and indirect estimates by TRA

Industry share of total tourism GVA

Over the period 1997–98 to 2011–12, industry share in total tourism GVA varied. This

depended on changes in visitor types and numbers, and the price and quantity of

tourism products and services demanded (Table 4). For example:

The share of the Accommodation and food services industry has increased 2.9

percentage points (from 14.5 per cent in 1997–98 to 17.4 per cent in 2011–12);

largely due to an increase in visitor numbers.

o Between 2000–01 and 2011–12, inbound visitor nights increased 5.1 per cent

annually (Tourism Forecasting Committee 2013, Issue 1).

The Education and training industry increased its share of tourism GVA from 1.9 per

cent in 1997–98 to 3.5 per cent in 2011–12, due to an increase in short-term student

visitors to Australia in recent years.

o Short-term visitor arrivals for education8 to Australia rose at an average annual

rate of 7.2 per cent between 1997–98 and 2011–12.

The share of total tourism GVA in all other industries remained more or less unchanged

during this period.

8 Compiled from Overseas Arrivals and Departures publication (ABS Cat. No 3401.0) March 2013 database

11

Table 3: Industry share in total tourism GVA (%)

Tourism industries 1997/

98

1998/

99

1999/

00

2000/

01

2001/

02

2002/

03

2003/

04

2004/

05

2005/

06

2006/

07

2007/

08

2008/

09

2009/

10

2010/

11

2011/

12

Agriculture, forestry and fishing 4.0 4.1 4.1 4.1 4.1 4.0 4.0 3.8 3.7 3.8 3.6 3.5 3.4 3.3 3.4

Mining 2.8 2.8 2.8 3.1 3.0 2.9 2.7 2.6 2.5 2.9 2.7 2.7 2.5 2.5 2.6

Manufacturing 8.5 8.6 8.5 8.4 8.4 8.3 8.2 8.2 8.1 8.1 7.9 7.7 7.6 7.6 7.5

Electricity, gas, water and

waste services

1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.6 1.6 1.6 1.6 1.6 1.5 1.5 1.5

Construction 2.0 2.0 2.0 2.0 2.0 2.0 1.9 1.9 1.9 1.9 1.9 1.9 1.8 1.8 1.8

Wholesale trade 3.4 3.5 3.4 3.4 3.4 3.3 3.3 3.3 3.2 3.2 3.2 3.1 3.0 3.0 3.1

Retail trade 8.3 8.1 8.4 8.6 8.5 8.4 8.4 8.8 9.0 9.1 8.9 8.7 8.4 8.5 8.3


services

14.5 15.1 14.8 14.6 15.1 15.2 15.2 15.4 15.4 15.3 16.2 16.7 16.9 17.2 17.4

Transport, postal and

warehousing

15.1 15.0 15.0 15.3 15.1 15.7 15.5 15.6 16.1 16.1 16.0 15.7 15.9 15.8 15.8

Information media and

telecommunications

4.9 4.8 4.8 4.6 4.5 4.5 4.5 4.3 4.1 4.0 4.0 4.0 4.0 4.0 3.9

Financial and insurance

services

6.3 6.3 6.3 6.3 6.2 6.1 6.1 6.1 6.0 6.0 5.9 5.9 5.9 5.8 5.9

Rental, hiring and real estate

services(c)

6.1 6.1 6.2 6.1 6.2 6.1 6.2 6.5 6.5 6.5 6.7 7.1 7.3 7.4 7.5

Professional, scientific and

technical services

7.0 6.9 6.9 6.9 6.8 6.7 6.7 6.6 6.6 6.5 6.4 6.3 6.2 6.1 6.1

Administrative and support

services

6.7 6.5 6.4 6.1 6.3 6.2 6.2 6.2 6.3 6.2 6.2 6.1 6.0 6.0 6.2

Public administration and

safety

0.8 0.8 0.8 0.8 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7

Education and training 1.9 2.0 2.1 2.4 2.8 2.7 3.1 3.2 3.1 3.1 3.2 3.7 3.7 3.7 3.5

Health care and social

assistance

1.6 1.4 1.4 1.2 1.2 1.2 1.2 1.0 0.8 0.8 0.8 0.8 0.9 0.9 0.8

Arts and recreation services 2.3 2.3 2.2 2.3 2.2 2.2 2.4 2.4 2.4 2.3 2.2 2.3 2.3 2.3 2.3

Other services 2.2 2.1 2.1 2.1 2.0 2.0 2.0 1.9 1.8 1.8 1.8 1.8 1.8 1.8 1.7

12

Total tourism GVA (direct(a)

and indirect(b))

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

Sources: (a) ABS Cat. No. 5249.0, and (b) TRA‘s estimates, (c) Renting, hiring and real estate services also includes Ownership of dwellings

13

Tourism’s contribution to employment

TRA estimates that tourism directly and indirectly employed an estimated 908,434

persons in 2011–12 (or 7.9 per cent of total employment in Australia), comprising:

531,900 persons (or 4.6 per cent of the Australian workforce) employed directly; one

percentage point lower when compared to 2010–11.

376,534 persons (or 3.3 per cent) employed indirectly.

Fifty nine per cent of total tourism employment was provided directly and the rest

(41 per cent) indirectly (Figure 3 and Table 2).

Tourism‘s share of total employment (7.9 per cent) was higher than tourism‘s share of

industry GVA (5.6 per cent), because tourism is more labour intensive than many other

industries9.

In 2011–12, total tourism employment rose around 25,120 (2.8 per cent), with

increased employment of 1,600 (0.3 per cent) in directly tourism-related industries and

23,520 (6.7 per cent) in industries related indirectly to tourism. Total tourism

employment increased at an average annual rate of 2.8 per cent between 1997–98 and

2011–12; faster than the growth in direct tourism employment of 1.8 per cent over the

same period.

Figure 5: Direct and indirect share of tourism employment

0

10

20

30

40

50

60

70

Employment

Pe

r ce

nt

Direct Indirect

Sources: (a) ABS Cat. No. 5249.0, (b) TRA‘s estimates

9 A business is labour intensive if labour accounts for the largest proportion of all inputs to the business

outputs.

14

Table 4: Summary, tourism’s direct and indirect contribution to the Australian economy

1997/

98

1998/

99

1999/

00

2000/

01

2001/

02

2002/

03

2003/

04

2004/

05

2005/

06

2006/

07

2007/

08

2008/

09

2009/

10

2010/

11

2011/

12

Direct contribution(a)

Tourism GDP ($m) 18,496 20,067 20,892 24,844 25,518 26,966 27,173 28,260 29,898 32,454 35,100 35,757 37,955 38,936 41,018

Share of national (%) 3.1 3.2 3.2 3.5 3.4 3.4 3.2 3.1 3.0 3.0 3.0 2.9 2.9 2.8 2.8

Tourism GVA ($m) 18,791 20,358 21,191 22,724 23,332 24,678 24,859 25,837 27,389 29,594 32,035 32,704 34,821 35,711 37,621


Tourism employment

(‗000)

413.8 425.8 432.1 449.0 456.4 460.1 459.2 475.3 488.2 499.1 513.0 513.8 519.3 530.3 531.9


Indirect contribution(b)

Tourism GDP ($m) 28,098 30,253 31,604 34,170 33,887 34,988 34,738 35,146 36,840 40,092 41,520 40,894 42,819 42,787 46,232


Tourism GVA ($m) 24,304 26,366 27,192 29,261 29,186 30,181 29,998 30,437 31,804 34,629 36,122 35,518 36,801 37,110 39,486


Tourism employment

(‗000)

203.1 219.7 226.4 272.9 274.0 282.9 284.2 293.5 310.7 333.6 346.8 341.4 348.1 353.0 376.5


Total contribution

Tourism GDP ($m) 46,594 50,320 52,496 59,014 59,405 61,954 61,911 63,406 66,738 72,546 76,620 76,651 80,774 81,723 87,250


Tourism GVA ($m) 43,095 46,724 48,383 51,985 52,518 54,859 54,857 56,274 59,193 64,223 68,157 68,222 71,622 72,821 77,107


Tourism employment

(‗000)

616.9 645.5 658.5 721.9 730.4 743.0 743.3 768.8 798.8 832.7 859.8 855.2 867.4 883.2 908.4


Sources: (a) ABS Cat. No.5249; (b) TRA calculations

15

Tourism employment by industry

Applying a strict definition for tourism employment is problematic as employees in

tourism-related industries generally provide services to both visitors and non-visitors.

To overcome this, the TSA provides estimates for tourism employment by applying

tourism GVA ratios from the benchmark year to ABS Labour Force Survey estimates for

tourism-related industries. By applying this method, the TSA reports that the tourism

industry directly employed 531,900 persons in 2011–12.

Tourism‘s total contribution to the Australian labour force is estimated at 908,360

persons for 2011–12 (with 376,534 persons indirectly linked to the tourism value chain,

Table 5). While All other industries comprised a majority of indirect total tourism-related

employment (91 per cent, or 246,100 persons), the following industries had a higher

direct component:

Accommodation and food services: 95 per cent (or 242,800 persons) of total tourism

employment in the industry in 2011–12.

Education and training: 90 per cent (or 36,600 persons)

Arts and recreation: 91 per cent (or 35,300 persons)

Retail trade: 79 per cent (or 101,000 persons).

Six industries collectively accounted for 70 per cent of total tourism employment:

Accommodation, cafés and restaurants - 255,600 (28 per cent of total)

Retail trade - 127,400 employees (14.0 per cent of total)

Air and water transport plus road and rail transport - 110,100 (12.1 per cent of total)

Travel agency and tour operator services - 66,000 (7.3 per cent of total)

Education and training - 40,700 (4.5 per cent of total)

Arts and recreation services - 38,900 (4.3 per cent of total).

The remaining 30 per cent (or 269,800) of total tourism employment was generated in

All other industries.

16

Table 5: Direct and indirect employment by tourism industries, 2011–12

Direct

employment(a)

(a)

Indirect

employment(b)

(b)

Tourism indirect

employment

multiple

(b)/(a) = (c)

Total tourism

employment =

direct

employment*(1+

E)

‗000 Ratio ‗000


services

242.8 12.8 0.1 255.6

Rail transport 3.3 1.2 0.4 4.5

Road transport and motor

vehicle hiring

19.1 28.9 1.5 48.0


transport

37.7 19.8 0.5 57.5

Travel agency and tour

operator services

32.4 33.6 1.0 66.0

Arts and recreation

services

35.3 3.6 0.1 38.9

Retail trade 101.0 26.4 0.3 127.4

Education and training 36.6 4.1 0.1 40.7

All other industries 23.7 246.1 10.4 269.8

Total tourism

employment

531.9 376.5 0.7 908.4


Growth in the contribution of main tourism industries to total tourism employment has

been mixed (Figure 5 and Table 6). Total tourism employment added 291,800 persons

(118,300 directly and 173,500 indirectly) to the Australian workforce between 1997–98

and 2011–12, with the following industries also showing growth during this period:

Accommodation and food services added around 56,800 persons (52,000 persons

employed directly and 4,800 indirectly)

Retail trade added 29,200 persons (19,100 persons employed directly and 10,100

persons indirectly)

Travel agency and tour operator services added 21,300 persons (7,800 persons

directly and 13,500 persons indirectly).

During this period, employment in the tourism industry grew at an average annual rate

of 2.8 per cent; higher than the 2.1 per cent for total employment in the economy.

17

Figure 6: Direct(a) and indirect(b) employment growth in the tourism industry, 1997–98 to 2011–12, (‘000)

0

50

100

150

200

Acco

mm

od

ation

and

foo

d services

Rail tran

spo

rt

Ro

ad tran

spo

rtan

d m

oto

r veh

icleh

iring

Air, w

ater and

oth

er transp

ort

Travel agency an

dto

ur o

perato

rservices

Arts an

drecreatio

nservices

Retail trad

e

Edu

cation

and

trainin

g

All o

ther

ind

ustrie

s

Total

Emp

loye

d p

erso

ns

(00

0)

Direct Indirect


18

Table 6: Total (direct (a) and indirect (b)) employment in tourism (‘000 persons)

1997

/98

1998/

99

1999/

00

2000/

01

2001/

02

2002/

03

2003/

04

2004/

05

2005/

06

2006/

07

2007/

08

2008/

09

2009/

10

2010/

11

2011/

12

Accommodation and

food services

198.8 204.1 209.7 221.6 224.8 224.2 220.2 227.2 226.1 231.1 236.9 241.1 253.7 258.9 255.6

Rail transport 3.5 3.4 3.0 3.3 3.0 3.3 3.5 3.4 3.7 3.5 3.5 4.7 4.7 4.8 4.5

Road transport and

motor vehicle hiring

36.4 38.2 38.4 40.4 41.3 41.8 43.3 41.5 42.4 45.1 47.0 47.2 46.3 46.0 48.0


transport

43.8 45.3 46.7 50.6 48.8 47.2 47.1 48.6 51.8 52.2 53.3 53.3 51.5 53.2 57.5

Travel agency and

tour operator services

44.7 47.0 46.1 46.9 46.8 46.0 46.2 48.9 52.5 55.9 61.7 58.1 62.5 62.8 66.0

Arts and recreation

services

23.2 24.4 24.8 25.6 27.1 28.1 29.0 31.4 34.6 35.8 36.8 37.9 36.9 37.5 38.9

Retail trade 98.2 102.6 104.0 105.8 109.1 116.1 115.7 123.0 128.4 134.5 135.7 130.5 124.2 127.4 127.4

Education and

training

27.1 28.2 28.6 29.2 30.2 31.3 32.7 31.2 32.7 32.4 35.3 36.8 38.9 40.3 40.7

All other industries 140.9 152.2 157.1 198.7 199.3 205.1 205.6 213.6 226.5 242.1 249.5 245.5 248.7 252.5 269.8

Total 616.7 645.5 658.5 722.0 730.5 743.1 743.3 768.7 798.7 832.6 859.7 855.1 867.5 883.5 908.4


19

Indirect employment in ‘All other industries’

In 2011–12, 246,100 persons were employed in All other industries. More than half (58

per cent) of total tourism-related indirect employment in this category occurred in

Manufacturing (55,600 persons); Professional, scientific and technical services (52,300

persons); and Agriculture, forestry and fishing (34,400 persons). Around 22,700 persons

were employed in Other services industries and 18,300 persons were employed in

Wholesale industry. The Construction, Information and telecommunication services and

Finance and insurance services industries employed around 16,500, 15,200 and 14,800

persons, respectively (Figure 6).

Figure 7: Tourism employment in All other industries, 2011–12

0 10 20 30 40 50 60

Manufacturing

Professional, scientific and technical services

Agriculture, forestry and fishing

Other services

Wholesale trade

Construction

Finance and insurance

Information and telecommunication services

Public administration and safety

Electricity, gas, water and waste water

Mining

Health care and social assistance

Employed persons (000)

Source: TRA‘s estimates

Tourism multipliers

The concept of indirect (and total) contribution to the Australian economy fully values

tourism‘s supply chain. This is different to the concept of total and indirect multipliers,

which reflects the economy-wide impacts on other sectors of the Australian economy.

Care should be used in using multipliers as they are a measure of average effects, not

marginal effects, and consequently do not take account of economies of scale, unused

capacity or technological changes (ABS 1995).

The calculation for the indirect contribution of tourism requires output multipliers. These

are sourced from ABS‘ input-output tables (ABS Cat. no. 5209.0.55.001). Details on the

output multipliers used in this analysis are presented in Table 7 in Appendix B, and are

from the latest available input-output data for 2008–09, released in September 2012.

Applying these multipliers to tourism consumption expenditure in Australia in 2011–12

also provides tourism multiplier values for indirect output in Appendix B.

20

Using this methodology, tourism‘s output multiplier for 2011–12 is valued at 1.8810,

which means for every dollar tourism earns directly in the Australian economy, it value

adds an additional 88 cents to other parts of the economy. At 1.88, tourism‘s multiplier

is larger than Mining (1.62), Retail trade (1.74) and Education and training (1.44).

When applying both multipliers, a one per cent increase of tourism direct consumption

expenditure of $91 billion ($910 million or one per cent of total) in 2011–12, generated

an output of $814 million (in nominal terms) outside tourism and increased employment

of 2,871 persons outside tourism.

Tourism multipliers over time

The output multiplier value for the tourism industry may change depending upon the

composition of tourism products consumed by visitors and the total multiplier value of

the industries producing these products. The tourism industry output multiplier value

seems to be influenced by three main products: Long distance transport; Takeaway and

restaurant meals; and Accommodation services. These three products constituted

around half (47 per cent) of the total tourism consumption in 2011–12.

As can be seen in Figure 7, the tourism industry output multiplier value was highest at

1.91 in 1998–99, but declined to 1.88 in 2011–12. This was consistent with the decline

in the share of Long distance transport consumption expenditure, which declined from

21.4 per cent in 1997–98 to 18.3 per cent in 2011–12. The share of Takeaway and

restaurant meals expenditure remained steady at 16.2 per cent, whereas

Accommodation services share rose from 9.5 per cent in 1997–98 to 12.6 per cent in

2011–12. In 2011–12, the multiplier value remained unchanged from 2010–11 at 1.88,

in line with the increase in Accommodation services consumption, while the share of

Long distance transport expenditure remained unchanged.

Figure 8: Relationship between tourism product share and tourism output multiplier

1.80

1.82

1.84

1.86

1.88

1.90

1.92

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00

22.00

24.001

99

7-9

8

19

98

-99

19

99

-00

20

00

-01

20

01

-02

20

02

-03

20

03

-04

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

20

10

-11

20

11

-12

Tou

rism

ind

ust

ry o

utp

ut

mu

ltip

lier

shar

e in

to

tal t

ou

rism

co

nsu

mp

tio

n a

t b

asic

pri

ce (

pe

r ce

nt) Long distance passenger

transportation

Takeaway and restaurantmeals

Accommodation services

Retail margin

Food products

Recreational, cultural andsports services

Education

Tourism industry outputmultiplier (RHS)

Source: Derived from ABS unpublished data

10 Tourism output multiplier changes every year depending upon the proportion of consumption expenditure by visitors. For 2011–12, the tourism output multiplier value was 1.88, which was lower than the multiplier value of 1.91 in 1998-99.

21

Conclusion

This report provides estimates of the total contribution of tourism to Australian GDP,

GVA and employment for the period 1997–98 to 2011–12. The results presented reflect

revised indirect tourism contribution estimates published by the ABS, and revisions to

TRA‘s National Visitor Survey and International Visitor Survey data. The report highlights

tourism‘s role in Australia‘s economic growth and its performance as compared to other

industries.

The report confirms that:

Tourism is a critical component of the Australian economy, contributing around

6.0 per cent to national GVA and GDP, and 8.0 per cent to total employment.

Tourism‘s indirect contribution to the economy is higher than some other industries

including the Mining and Retail trade industries. The benefits of the tourism industry

are far reaching, and significant for the economic growth of all sectors within

Australia.

Tourism‘s contribution to the Australian labour force is larger than that of the Mining

industry. This shows that while Mining is important for Australia‘s economic growth,

tourism is crucial—not only for economic growth, but also for Australia‘s social

growth.

Despite its significant contribution to the economy, the tourism industry is at a

disadvantage in terms of investment and innovation when compared with other

industries, in particular Mining. For the tourism industry to achieve its potential, it is

important that increased investment flows to areas such as innovation. This will allow

improved productivity and smooth possible imbalances in the various industries that

comprise ‗tourism‘.

22

References

Access Economics (2011, completed 2010), The 2020 tourism industry stretch goal

(now called the 2020 Tourism Industry Potential), implications and imperatives,

consultancy report for the Department of Resources, Energy and Tourism, Access

Economics, Canberra (unpublished report).

Australian Bureau of Statistics (ABS) 2013, Australian National Accounts, Tourism

Satellite Accounts, 2011–12, Cat. No. 5249.0, ABS, Canberra.

ABS 2013, Overseas Arrivals and Departures, Cat. No. 3401.0, ABS, Canberra.

ABS (1995), Information Paper: Australian National Accounts – Introduction to Input-

Output Multipliers, Cat. No. 5246.0, ABS, Canberra.

Statistics New Zealand (2012), Tourism Satellite Account: 2012, Wellington: Statistics

New Zealand

Tourism Research Australia (2013), Travel by Australians – June 2012 Quarterly Results

of the National Visitor Survey, Tourism Research Australia, Canberra.

Tourism Forecasting Committee, Forecast 2013 Issue 1, Tourism Research Australia,

Canberra.

United Nations Statistical Division, Statistical Office of the European Communities,

Organisation for Economic Co-operation and Development, World Tourism Organization,

Tourism Satellite Account: Recommended Methodological Framework, 2008, Luxemburg,

Madrid, New York, Paris: United Nations.

United Nations World Tourism Organization 2010, TSA Data Around The World –

Worldwide Summary, Statistics and Tourism Satellite Account Programme, June,

UNWTO, Madrid.

23

Appendix A: Methodology for calculating indirect

contribution

The indirect contribution model developed and implemented by TRA uses relationships

derived from the latest available input-output (I-O) table for 2008–09 from the ABS. The

model assumes that from 1997–98 to 2011–12, the industry structure of the Australian

economy remained consistent with 2008–09 input-output tables.

This also means that the model produces estimates based on the supply and demand

relationships generated by the 2008–09 input-output tables. It does not take into

account any year-to-year variation in supply and demand ratios. This assumption holds

in terms of recently revised supply-use tables for the whole time-series based on

Australian and New Zealand Standard Industrial Classification 2006 (ANZSIC 2006).

Direct and indirect effects are measured in terms of three key economic indicators:

tourism GDP, tourism GVA and tourism employment. It is difficult to directly measure

employment in tourism because employees in tourism-related industries generally

provide services to both visitors and non-visitors. The TSA measures direct tourism

employment by applying the tourism GVA ratio in the benchmark year to the ABS Labour

Force Survey estimates for tourism-related industries in subsequent years.

This method assumes that the employment generated by tourism is directly proportional

to the ‗value added‘ generated by tourism in the benchmark year. While this might not

be strictly accurate, the method provides a way of apportioning total industry

employment between servicing demands of visitors and non-visitors.

Tourism industry GVA ratios are used for generating employment estimates for the

subsequent years until a new benchmark is produced using revised estimates in terms of

supply-use tables, service industry surveys and other new information. Employment

estimates presented in this report are based on the 2009–10 benchmark year.

The model

The Australian TSA measures the direct effects of tourism activity. This is the activity of

those businesses which directly supply a product to a visitor (tourist). For example, it

includes a hotel providing accommodation to a visitor, or a retailer selling a souvenir to a

visitor. When a visitor buys a meal in a restaurant, the direct tourism demand is the

price of the meal.

However, it does not include the indirect effects of tourism, which is of considerable

interest. These are the up-stream effects of tourism demand on businesses which

provide goods and services to the tourism industry. The indirect tourism demand

generated from the supply of a meal to a visitor, for example, begins with the production

of intermediate inputs used by the restaurant (e.g. the production of meat and

vegetables used to make the meal, electricity for cooking etc). Producers of these inputs

have no direct relationship with the visitor.

Indirect tourism demand is calculated through input-output analysis. This analysis

provides a breakdown of the supply and demand of commodities in the Australian

economy.

Input-output is based on a fundamental identity which equates supply and demand as

follows:

Let, in a simple production function form, tij = Ati + fi

24

where: t = total outputs of industry sectors

A= inter-industry coefficients

f = final demand for outputs of the industry sectors

Solving the input-output model:

t = At + f

t – At = f

(I-A) t = f

t = (I-A)-1 f

where (I-A)-1, is the Leontief inverse, or input-output inverse/multiplier.

TRA uses the following mathematical relationships to estimate indirect tourism

contribution:

Indirect output = [(I-A) -1 - I] F

Indirect employment = E [(I-A) -1 - I] F

A = a matrix (coefficient) derived from the I-O table. This table contains data on the flow

of goods and services in the economy (e.g. who buys what, and who produces what)

I = Identity matrix (ones in the diagonal and zeros elsewhere)

(I-A) = matrix calculated by subtracting the coefficient matrix (A) from the identity

matrix (I)

(I-A) -1 = An inverse matrix showing by what factor (row) industry sells goods and

services to (column) industry because of change in final demand

F = Tourism consumption at basic prices

E = Employment/output ratios

The model uses input coefficients generated by econometric equations that predict input

purchases based on an economy‘s characteristics. Output from the model includes total

industry output, employment, and value-added for all industries in the Australian

economy. Total industry output is defined as the value of production by industry per

year. Employment represents total wages and salaried employees for both full-time and

part-time workers.

Total value added is defined as:

all income paid to workers by employers

self-employed income

interests

rents

royalties

dividends

profit payments

excise and sales taxes paid by individuals to businesses.

25

Appendix B: Input-output multipliers and tourism

multipliers

Input-output multipliers:

The introduction of direct and indirect definitions in TSA has overlapped with a similar

terminology (not the concept) that has been used historically in the input-output

modelling technique. In the I-O modelling concept, direct contribution is the initial

consumption demanded in the economy. The indirect contribution is the total flow-on

effect on industries providing intermediate inputs to the industry supplying goods and

services to the initial consumption.

In order to account for tourism contribution correctly, the consumptions of TSA Direct

and are combined to calculate the flow-on effects using the I-O multipliers. As

mentioned, this report adopts and reports the TSA Direct tourism contribution as those

in the national TSA, the contribution of the TSA Indirect contribution is then combined

with the flow-on effect of tourism contribution in this report for the reporting purposes.

Charts 8 and 9 summarise our process.

As seen from Figure 8 and 9, total contribution is the same in both TSA and I-O

multipliers approaches. Estimates in this report are provided separately for direct and

indirect tourism effects in nominal terms unless stated otherwise. The report provides

mainly tourism GDP, tourism GVA and tourism employment.

Figure 9: Flow-on effect of tourism consumption

TSA direct tourism output $74,588 m

TSA indirect tourism output $16,319 m

Total tourism consumption $90,907 = $74,561 + $16,319

Total flow-on economic output generated by tourism consumption

$171,294 m

I-O

multipliers

26

Figure 10: Presentation of results

A multiplier reflects the flow-on effect on output or employment, due to a unit increase

in the output of a given industry resulting from increased demand for a particular

commodity. They are not tourism specific multipliers, but can be used to discuss the

multiplier effect of increases in consumption expenditure in tourism characteristic

industries.

Input-output multipliers are summary measures used for predicting the total impact on

all industries, in an economy of changes in demand for the output of any one industry.

The multipliers describe average effects, not marginal effects, and consequently do not

take account of economies of scale, unused capacity or technological changes

(ABS 1995).

Industry multipliers provide the basis for calculating tourism‘s indirect effects, derived

from the latest available input-output data from the ABS: the 2008–09 input-output

tables published in late 2012.

For example, $1.0 million worth of increased demand in the Accommodation and food

services industry will require $1.98 million (Column B) worth of goods and services to be

produced throughout the economy generating around 15 jobs (Column F*1000). This

increase in output in the economy will increase tourism related output in Accommodation

and food services industries by $598,000 (tourism consumption ratio being 30.2%) and

will increase total tourism employment by 4.6 persons, of which 1.2 persons will be

employed indirectly (refer Table 7).

TSA Direct Tourism output (reported) $74,588 m

TSA Indirect Tourism output (reported) $16,319 m

Flow-on economic output generated by tourism consumption

$80,387 m

Total Indirect output (reported) $96,706m = $16,319 m+ $80,387m

Indirect effects Direct effects

Total tourism output (reported)

$171,294 m = $74,588 m + $96,706 m

27

Table 7: Tourism industry multipliers (2011–12) based on 2008–09 input-output tables

Industries Tourism consumption at

basic price (tourism output)

identified as direct or indirect

in TSA

Total tourism

consumption ($

million) at basic

price (sum of

direct and

indirect)

Output

multipliers*

Tourism

consumption

ratio

Share weighted

consumption

(Col.B*Col.C)

Indirect

output

($ million)

Total

employment

multipliers*

Share weighted

tourism

employment

(Col.C*Col.F*1000)

Indirect

employment

multipliers*

Share weighted

indirect tourism

employment

(Col.C*Col.H*1000)

Columns Direct Indirect A B C D E F G H I

Agriculture,

forestry and

fishing

0.000 648.1 648.1 1.973 0.007 0.014 5417 0.009 0.067 0.004 0.030

Mining 0.000 0.0 0.0 1.619 0.000 0.000 2785 0.003 0.000 0.002 0.000

Meat and dairy 0.000 1337.2 1337.2 2.501 0.015 0.037 2399 0.010 0.140 0.007 0.100

Other food 0.000 1420.7 1420.7 2.340 0.016 0.037 2531 0.009 0.141 0.006 0.090

Beverages and

tobacco

0.000 1581.1 1581.1 2.101 0.017 0.037 1989 0.007 0.117 0.005 0.084

Textiles 0.000 135.4 135.4 1.983 0.001 0.003 212 0.007 0.010 0.004 0.006

Clothing and

footwear

0.000 353.8 353.8 1.608 0.004 0.006 83 0.009 0.034 0.003 0.012

Wood 0.000 3.0 3.0 2.146 0.000 0.000 346 0.009 0.000 0.005 0.000

Printing and

publishing

0.000 100.0 100.0 1.878 0.001 0.002 1394 0.008 0.009 0.004 0.004

Petroleum and

coal

0.000 3650.4 3650.4 1.617 0.040 0.065 2737 0.002 0.084 0.002 0.065

Chemicals 0.000 464.9 464.9 2.081 0.005 0.011 819 0.006 0.030 0.004 0.021

Rubber and

plastic

0.000 89.3 89.3 1.897 0.001 0.002 804 0.006 0.006 0.003 0.003

Non-metallic

mineral

0.000 30.1 30.1 2.009 0.000 0.001 489 0.006 0.002 0.004 0.001

Basic metal 0.000 1.1 1.1 2.128 0.000 0.000 596 0.003 0.000 0.002 0.000

Fabricated

metal

0.000 34.3 34.3 2.124 0.000 0.001 1521 0.006 0.002 0.003 0.001

Transport

equipment

0.000 583.4 583.4 2.013 0.006 0.013 1345 0.007 0.047 0.004 0.024

28




in TSA

Total tourism

consumption ($

million) at basic

price (sum of

direct and

indirect)

Output

multipliers*

Tourism

consumption

ratio

Share weighted

consumption

(Col.B*Col.C)

Indirect

output

($ million)

Total

employment

multipliers*

Share weighted

tourism

employment

(Col.C*Col.F*100

0)

Indirect

employment

multipliers*

Share weighted

indirect tourism

employment

(Col.C*Col.H*10

00)


Other

machinery and

equipment

0.000 568.1 568.1 1.982 0.006 0.012 779 0.007 0.044 0.003 0.020

Miscellaneous

manufacturing

0.000 350.6 350.6 1.893 0.004 0.007 126 0.011 0.042 0.003 0.013

Electricity 0.000 0.0 0.0 2.050 0.000 0.000 1604 0.004 0.000 0.002 0.000

Gas 0.000 0.0 0.0 2.043 0.000 0.000 79 0.009 0.000 0.004 0.000

Water supply

and waste

collection

0.000 0.0 0.0 1.782 0.000 0.000 581 0.007 0.000 0.003 0.000

Construction 0.000 0.0 0.0 2.335 0.000 0.000 4067 0.008 0.000 0.005 0.000

Wholesale

trade

0.000 2640.8 2640.8 1.887 0.029 0.055 4168 0.007 0.214 0.004 0.107

Retail trade 8899.2 749 9648.2 1.737 0.106 0.184 1634 0.016 1.684 0.003 0.342

Accommodat

ion and food

services

27422.2 63 27485.2 1.979 0.302 0.598 1098 0.015 4.550 0.004 1.182

Road transport 2013.4 716.3 2729.7 1.880 0.030 0.056 2268 0.009 0.285 0.004 0.124

Rail transport 899.5 45.9 945.4 1.865 0.010 0.019 205 0.007 0.076 0.003 0.032

Air, space,

water and

other

transport

16695.8 109.2 16805.6 1.950 0.185 0.361 1054 0.007 1.260 0.004 0.664

Postal and

warehousing

1152.7 80.3 1233.0 1.891 0.014 0.026 4117 0.008 0.106 0.004 0.053

Information

media and

telecommunic

ations

686.9 542.6 1229.5 1.839 0.014 0.025 4334 0.006 0.087 0.004 0.049

29




in TSA

Total tourism

consumption ($

million) at basic

price (sum of

direct and

indirect)

Output

multipliers*

Tourism

consumption

ratio

Share weighted

consumption

(Col.B*Col.C)

Indirect

output

($ million)

Total

employment

multipliers*

Share weighted

tourism

employment

(Col.C*Col.F*100

0)

Indirect

employment

multipliers*

Share weighted

indirect tourism

employment

(Col.C*Col.H*10

00)


Financial and

insurance

services

85.5 10.7 96.2 1.463 0.001 0.002 5548 0.004 0.004 0.002 0.002

Ownership of

dwelling

4238.3 0.0 4238.3 1.410 0.047 0.066 0 0.001 0.060 0.001 0.060

Rental, hiring

and real estate

services

1234.8 0.0 1234.8 2.156 0.014 0.029 4854 0.008 0.104 0.005 0.066

Professional,

scientific and

technical

services

6.1 0.0 6.1 1.953 0.000 0.000 9090 0.009 0.001 0.004 0.000

Administrative

support

services

3051.3 9.7 3061.0 1.871 0.034 0.063 5657 0.010 0.331 0.004 0.131

30




in TSA

Total tourism

consumption ($

million) at basic

price (sum of

direct and

indirect)

Output

multipliers*

Tourism

consumption

ratio

Share

weighted

consumption

(Col.B*Col.C)

Indirect

output

($ million)

Total

employment

multipliers*

Share weighted

tourism

employment

(Col.C*Col.F*1000)

Indirect

employment

multipliers*

Share weighted

indirect tourism

employment

(Col.C*Col.H*1000)


Public

administration

and safety

0.000 0.000 0.0 1.791 0.000 0.000 829 0.009 0.000 0.003 0.000

Education and

training

3226.5 0.000 3226.5 1.435 0.035 0.051 369 0.013 0.465 0.002 0.069

Health care

and social

assistance

763.2 0.000 763.2 1.513 0.008 0.013 88 0.014 0.118 0.002 0.019

Arts and

recreation

services

3858.0 0.000 3858.0 1.955 0.042 0.083 460 0.012 0.512 0.004 0.184

Other services 353.8 0.000 353.8 1.727 0.004 0.007 1915 0.013 0.050 0.003 0.012

Total 74588 16319 90907 1.000 1.884** 80387.2 10.682** 3.572**

Source: TRA‘s estimates using 2008–09 input-output tables

*Generated from the input-output tables

** The total tourism multiplier (sum of share weighted output, employment and indirect employment)

tourism’s contribution to the australian economy · tourism’s contribution to the australian...

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