Publication - Research publication

Tourism in Scotland: the economic contribution of the sector

Published: 24 Apr 2018

A report commissioned by the Tourism Leadership Group setting out economic data and trends on tourism across Scotland.

44 page PDF

1.5 MB

44 page PDF

1.5 MB

Contents
Tourism in Scotland: the economic contribution of the sector
Appendix 1: Defining Tourism and the Wider Visitor Economy

44 page PDF

1.5 MB

Appendix 1: Defining Tourism and the Wider Visitor Economy

Competitors race in the Bell Lawrie Scottish Series in 2000, Loch Fyne, Argyll

Competitors race in the Bell Lawrie Scottish Series in 2000, Loch Fyne, Argyll

There are different approaches to defining the scope of the tourism sector, using official statistics and other methods. While parts of this report make use fo the Scottish Government’s Sustainable Tourism Growth Sector definition, this section gives an overview of different approaches that have been used elsewhere.

Definition of the Sustainable Tourism Sector

Sustainable Tourism Growth Sector was identified in Scotland’s Economic Strategy [31] as one of the growth sectors in which Scotland can build on and existing comparative advantage and increase productivity and growth.

Scotland’s Tourism Sector is a diverse industry, with a range of subsectors such as hotels, camping sites and other provision of short stay accommodation, restaurants, bars, travel agents, museums and other recreational and cultural

activities. In addition, other sectors in the Scottish Economy, for example retail and transport, benefit directly and/or indirectly from the Tourism Industry.

Economic activity generated by tourism expenditure cannot be precisely captured using Standard Industrialisation Classification Codes, as tourism is a characteristic of demand rather than specific products or services.

However, a number of industries within the service sector can be used to capture economic activity in a set of tourism-related industries outlined int Table A1. Data based on this classification does not represent a direct measure of economic activity from tourism, as part of the demand in these industries will be generated by non-tourists as well as tourists.

Table A1 sets out how the Sustainable Tourism growth sector is defined, according to the SIC 2007 codes:

Table A1: Definition of the Scottish Government’s Sustainable Tourism Growth Sector

SIC Code

Activity

SIC 55.1

Hotels and similar accommodation

SIC 55.2

Holiday and other short-stay accommodation

SIC 55.3

Camping grounds, recreational vehicle parks and trailer parks

SIC 56.1

Restaurants and mobile food service activities

SIC 56.3

Beverage serving activities

SIC 79.12

Tour operator activities

SIC 79.9

Other reservation service and related activities

SIC 91.02

Museum activities

SIC 91.03

Operation of historical sites and buildings and similar visitor attractions

SIC 91.04

Botanical and zoological gardens and nature reserve activities

SIC 93.11

Operation of sports facilities

SIC 93.199

Other sports activities (not including activities of racehorse owners) nec

SIC 93.21

Activities of amusement parks and theme parks

SIC 93.29

Other amusement and recreation activities

The International Definition of Tourism

There is also an international definition of the Tourism Industries, data for which is provided to allow comparisons between Scotland and other countries.

The international Tourism Industries definition is wider than the Sustainable Tourism Growth Sector definition – for

example, the international definition includes passenger transport, gambling and betting activities and travel agents. Table A2 below shows the additional SIC 2007 codes that are included in the international definition – the international definition includes these additional codes and the Sustainable Tourism codes.

Table A2: Additional SIC 2007 Codes in the International Definition

SIC Code Activity
SIC 49.1 Passenger rail transport, interurban
SIC 49.32 Taxi operation
SIC 49.39 Other passenger land transport nec
SIC 50.1 Sea and coastal passenger water transport
SIC 50.3 Inland passenger water transport
SIC 51.101 Scheduled passenger air transport
SIC 51.102 Non-scheduled passenger air transport
SIC 55.9 Other accommodation
SIC 56.2 Event catering and other food service activities
SIC 68.202 Letting and operating of conference and exhibition centres
SIC 77.11 Renting and leasing of cars and light motor vehicles
SIC 77.21 Renting and leasing of recreational and sports goods
SIC 77.341 Renting and leasing of passenger water transport equipment
SIC 77.351 Renting and leasing of passenger air transport equipment
SIC 79.11 Travel agency activities
SIC 82.301 Activities of exhibition and fair organizers
SIC 82.302 Activities of conference organizers
SIC 90 Creative, arts and entertainment activities
SIC 92 Gambling and betting activities

The size of the Sector under Different Definitions

The difference in figures between the Scottish Government growth sector definition, and International Standard definition of tourism (which is broader), are provided in the table below:

Table A3: Comparison of Scotland’s Tourism Sector under Different Definitions

Tourism Indicators Growth Sector Definition International Definition Year
No. of Enterprises 14,145 17,975 2017
GVA (£ billion) £3.76 £7.56 2015
Productivity (£ GVA/worker) £17,771 £27,332 2015
Employment 207,000 276,000 2016

Sources: Growth Sector Statistics Database; Scottish Annual Business Statistics

Measuring the Impact of Tourism Expenditure

While the Scottish Government and the International SIC Code classifications enable direct tourism activity to be compared to other sectors, they may not fully capture the contribution of visitors’ expenditure to the Scottish Economy. These are measured and reflected through other routes.

The Statutory Tourism Monitors – namely the Great Britain Tourism Survey ( GBTS), the International Passenger Survey ( IPS) and Great Britain Day Visitors Survey ( GBDVS) – are collected by VisitScotland and are undertaken in accordance with EU Directive on Tourism Statistics (Council Directive 95/57/ EC). Statistics from these surveys potentially reflect the economic contribution of the sector more accurately and allow analysis at national and regional level on the number of trips and visitor expenditure.

It is important to note that SIC Codes capture information from businesses, i.e. the suppliers of a product or service. The Statutory Tourism Monitors capture information from customers, i.e. those generating demand for those products or services. These visitor expenditure figures show the direct economic effect of visitor activity – namely what visitors buy, such as accommodation, activities, transport, and food & drink.

However, there are limitations of using visitor expenditure to reflect tourism’s contribution. The main one being that using visitor expenditure data means that the sector cannot be directly compared to other economic sectors who use SIC Code data. Using SIC Code data for tourism, as explained above, does not reflect its full economic contribution to Scotland, therefore both data sets are used to highlight different aspects.

These figures also do not reflect the indirect (supply-side) activity and induced (re-spending of wages) activity, i.e. the wider effects of visitors on the economy. To take account of this wider economic effect, Input-Output modelling are used. This not only captures the direct effect of visitor expenditure but also the indirect and induced impacts across all sectors of Scotland’s economy.

Scottish Government Office of Chief Economic Advisor ( OCEA) Input–Output Impact Model takes the direct spending by tourists in Scotland (the Input), deducts imports and product taxes, and then estimates indirect (supply-side) activity and induced (re-spending of wages) activity.

While Input-Output modelling captures the true value of tourism, it is more challenging to use Input-Output modelling to compare tourism with other sectors due to nature of the sector’s ‘inputs’ (i.e. visitor expenditure). Hence, when looking to understand tourism as a discreet sector and element within, such as different markets and activities, visitor expenditure data is used. For comparison with other sectors SIC definitions are more preferable (with the limitations as previously described).


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