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Measuring the economic contribution of Tourism to the

economy of South Africa

Pali LehohlaStatistician-General

Tourism Summit: Parliament 28 February 2010

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Content

Outline of Presentation

• What is tourism

• Sources of information for tourism

• Patterns of domestic tourism

• Contribution of Tourism to Employment and GDP

• Status of non-vat registered businesses

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Content

• Tourism and the TSA

• TSA results

• Tourism Statistics at Statistics South Africa

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Intro to tourism

Visitors

Same day visitor

Some might be in transit

Don’t spend a night

TouristSome might be

in transit

Do spend a night (see next

slide)

Tourism: their activity

Other travellers

Tourism: their activity

WORKERS paid in the

country visited

REFUGEES

Others within USUAL

ENVIRONMENT

DIPLOMATS

MIGRANTS

Travellers

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What is a TSA

Tourism is Difficult to Measure

Hotels

Restaurants

85%

45%

Tourist

Not a Tourist!

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Concepts and definitions

• Tourism Tourism includes all trips away from one’s usual environment, not just

holiday/leisure trips. It also includes business, visiting friends and/or relatives, medical/health trips, and religious journeys amongst others.

• Trip A journey taken outside of the usual environment of the household.

• Usual environment The usual environment is defined as all places within a 40 kilometer

radius of the place of usual residence of the respondent, AND all places that the respondent visits at least once a week (e.g., going to work), irrespective of the distance from their place of usual residence.

• Day trip A trip outside of the respondent’s usual environment, where they leave

and return within the same day.

• Overnight trip A trip outside of the respondent’s usual environment where one night or

more is spent away from the household.

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TSA

What does the TSA do?

• It is a statistical instrument used to measure the size of the tourism industry’s contribution to the economy of a country according to international standards of concepts, classifications and definitions;

• Allow for valid comparisons with other industries and eventually from country to country and between groups of countries;

• Fundamental structure of a TSA is based on the general relationship existing within an economy between the demand of goods and services generated by tourism on the one hand and their supply on the other hand – it therefore brings together the demand- and supply side of the tourism industry;

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TSA

Why a TSA?

• A TSA provides a framework for policy analysis of issues related to tourism economics, as well as for model-building, tourism growth analysis and productivity measurements;

• A TSA is constructed using official data and not modeling techniques;

• The main purposes of the TSAs are to:

analyse in detail all the aspects of demand for goods and services which might be associated with tourism within the economy;

observe the operational interface with the supply of such goods and services within the same economy of reference; and

describe how this supply interacts with other economic activities.

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TSA TablesThe 10 tables of the TSA

Table 1: Inbound tourism expenditure

Table 9: Tourism collective consumption by CPC (Central

Product Classification) products and levels of government

Table 10: Non-monetary indicators

Table 7: Employment in the tourism industries

Table 8: Gross fixed capital formation of tourism industries and

other industries

Table 6: Domestic supply and internal tourism

Table 5: Production accountsTable 4: Internal tourism

Table 3: Outbound tourism expenditure

Table 2: Domestic tourism expenditure

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Foreign and Domestic Tourists

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Tourism and Migration

Travellers versus Tourists (2009) (Tourism 2009, Report 03-51-02 (2009))

Foreign travellersForeign travellers

18 778 55618 778 556

ArrivalsArrivals

10 098 30610 098 306

DeparturesDepartures

8 680 2508 680 250

VisitorsVisitors

9 531 6159 531 615

Non VisitorsNon Visitors

566 691566 691

TouristsTourists

7 011 8657 011 865

Same day Same day visitorsvisitors

2 519 7502 519 750

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Patterns of Domestic Tourists

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Number of most recent person trips.

Type of trip

Number of person trips

N (1 000)

Day trips Overnight trips

5 361 9 770

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Number of overnight trips by length of stay

Number of nights

Number of recent overnight person

trips N (1 000) Percentage (%)

1 Night 1 078 11,3

2-4 Nights 3 202 33,4

5 or more Nights 5 297 55,3

Subtotal 9 577 100,0

Unspecified nights 192 -

Total 9 770 -

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Province of destination

• Gauteng was the most visited province on day trips (24,2%)

• KwaZulu-Natal had the highest proportion of overnight trips (22,7%).

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Province of destination

Percentage of day and overnight trips by province of destination

0,0

5,0

10,0

15,0

20,0

25,0

30,0

Day trips 11,1 9,8 2,0 5,5 18,6 7,0 24,2 8,8 12,6

Overnight trips 10,3 14,8 2,2 5,8 22,7 6,0 13,2 9,0 14,0

WC EC NC FS KZN NW GP MP LP

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Purpose of visit

The main reasons for taking trips was visiting friends and family/relatives and leisure:

Day trips - VFR: 29,7% and Leisure: 20,6%

Overnight trips – VFR: 54,0% and Leisure: 25,0%

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Purpose of visit by kind of trip

0

10

20

30

40

50

60

Day trip 20,6 2,4 19,4 0,4 1,2 29,7 7,4 3,1 0,6 1,5 3,2 0,1 4,1 5,6

Overnight trip 25,0 0,5 0,3 0,2 0,3 54,0 8,9 1,3 0,2 0,7 0,9 0 3,3 3,2

LeisureShopping – business

Shopping – personal

Sporting – spectator

Sporting – participant

Visiting friends/relati

vesFuneral Business trip

Business conference

Study Medical Wellness Religious Other

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Main destination by purpose of visit

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

WC 60,0 31,9 3,3 1,2 0,5

EC 33,2 49,4 9,1 0,8 3,3

NC 32,7 45,5 10,4 2,8 0,6

FS 23,5 50,5 12,9 1,8 2,6

KZN 27,1 56,2 6,3 1,1 3,4

NW 13,1 55,3 19,4 1,5 2,3

GP 14,7 62 7,3 1,7 3,3

MP 15,2 64,4 9,2 1,5 2,3

LP 10,2 63,3 13,3 1,7 7,4

Leisure Visiting friends/relatives Funeral Business trip Religious

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Mode of transport

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Mode of of transport

Main mode of transport

Day trips Overnight trips

Thousand % Thousand %

Bus 331 6,2 1 179 12,1

Car 2 678 50,0 3 887 39,8

Taxi 2 054 38,3 3 977 40,7

Total 5 361 100 9 770 100

Totals include other modes of transport e.g. aircraft, trains, motorcycles and bicycles

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Destination by mode of transport

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

WC 6,8 6,8 76,3 7,5 2,2 0,4

EC 1,4 19,4 33,5 40,1 3,3 2,2

NC 1,7 6,0 62,0 21,6 2,3 6,4

FS 0,2 6,7 43,4 44,5 3,8 1,4

KZN 1,1 10,1 38,1 48,7 1,4 0,5

NW 0,2 6,7 41,0 50,4 0,7 1,0

GP 2,4 15,7 30,8 43,4 7,7 0,1

MP 0,5 10,2 41,5 42,1 5,3 0,4

LP 0,2 12,5 30,8 55,1 1,2 0,3

Air Bus Car Taxi Train Other

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Destination by mode of transport

• When trips made to Western Cape people used cars (76,3%), taxi (7,5%), aircraft (6,8%) and bus (6,8%).

• Travellers to Gauteng used taxis (43,4%), cars (30,8%), buses (15,7%) and trains (7,7%).

• Fifty five (55,1%) used taxis, cars (30,8%) and buses (12,5%) to reach the Limpopo province.

• The mode of transport of most of the travellers to Kwazulu-Natal was taxi (48,7%), cars (38,1%) and buses (10,1%).

• Forty per cent (40,1%) of trips to Eastern Cape were made by taxis, 33,5% by cars and 19,4% by buses.

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Activities undertaken whilst on trip

,0

10,0

20,0

30,0

40,0

50,0

60,0

Day trips 57,0 2,4 6,9 16,7 12,8 2,8 1,3

Overnight trips 40,8 0,8 6,4 20,5 17,6 9,5 4,4

Recreation/ entertainment

Business trip Sports Nature-based Social activityReligious activity

Medical

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Age distributions by day and overnight

The age group 30 – 34 most likely to travel.

• 1,018 million overnight trips

• 606 000 day trips

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Age distributions by day and overnighttrip

0,0

2,0

4,0

6,0

8,0

10,0

12,0

Day trips 5,5 5,3 5,2 6,4 9,8 9,5 11,3 9,9 8,4 8,0 6,5 4,9 3,9 2,4 1,6 1,4

Overnight trips 7,2 7,5 7,2 8,6 9,5 10,2 10,4 9,2 6,7 6,4 5,2 4,1 3,0 2,3 1,4 1,3

0–4 5–9 10–14 15–19 20–24 25–29 30–34 35–39 40–44 45–49 50–54 55–59 60–64 65–69 70–74 75+

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TSA role players

Roles and responsibilities of key role-players

Working team

Collect and provide data

Users

Construct the TSA

Stats SA SAT SARB DHA dti

Other industry players

NDT

SARS

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Contribution of tourism to employment and size of the economy

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Key concepts

Key concepts used in the TSA

Gross direct value added of the tourism industries

Tourism industries

Visitors Non-visitors

Tourism direct gross value added

Non-tourism industries

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Key Results

2005 (final)

2006 (provisional

2007 (provisional)

2008 (provisional)

Inbound tourism expenditure(R million)

51 090 57 983 66 655 69 964

Domestic tourism expenditure(R million)

52 842 61 228 67 609 76 914

Internal tourism expenditure(R million)

103 932 119 211 134 264 146 878

Tourism direct gross domestic product (TDGDP) (R million) 44 908 52 423 59 783 67 141

Tourism direct gross domestic product (TDGDP) (%) 2,9 3,0 3,0 2,9

Persons directly engaged in producing goods and services purchased by tourists (nr)

507 384 553 712 569 677 599 410

Persons directly engaged in producing goods and services purchased by tourists (%)

4,0 4,1 4,2 4,4

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Key Results: Employment

2005 2006 2007 2008

Employment in the tourism industries

2 137 639 2 365 084 2 449 132 2 459 674

Persons directly engaged in producing goods and services purchased by tourists

507 384 553 712 569 677 599 410

Total employment in SA

12 768 859 13 418 807 13 467 261 13 712 823

% contribution of tourism 4,0 4,1 4,2 4,4

Tourism employment, 2005 to 2008

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Concepts &Definitions

Forms of Tourism

Outbound

Dom

esti

c

Inbound

Internal

International

National

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TSA results

Tourism products 2005 2006 2007 2008

Accommodation for visitors 16,9 16,4 16,6 16,9

Restaurants and similar services 7,5 7,2 7,5 7,6

Railway passenger transport services 0,2 0,2 0,2 0,2

Road passenger transport services 23,2 23,1 22,1 22,9

Water passenger transport services 0,0 0,0 0,0 0,0

Air passenger transport services 9,8 9,5 9,9 10,2

Transport equipment rental 1,8 1,7 1,6 1,8

Travel agencies and other reservation services 3,5 3,4 3,3 3,0

Cultural services 0,1 0,1 0,1 0,1

Sports and recreational services 3,9 4,0 4,0 3,8

Tourism-connected products 11,1 11,2 11,1 11,1

Non-specific products 22,0 23,3 23,5 22,3

Total 100,0 100,0 100,0 100,0

Internal tourism consumption expenditure by types of products, 2005 to 2008

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TSA results

Comparison – Tourism vs traditional industries (Value Added)

0

5

10

15

20

25

Electricity, gas andwater

Agriculture, forestryand fishing

Construction Tourism Mining andquarrying

Transport andcommunication

Wholesale and retailtrade

GeneralGovernment

services

Manufacturing Finance, real estateand business

services

Industry

%

2005 2006 2007 2008

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TSA results

Comparison – Tourism vs traditional industries (Employment)

0

5

10

15

20

25

30

Electricity, gasand water

Mining andquarrying

Tourism Transport andcommunication

Agriculture,forestry and

fishing

Construction Private hh Finance, realestate and

business services

Manufacturing Community andSocial services

Wholesale andretail trade

Industry

%

2005 2006 2007 2008

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Business in the non-vat registered environment

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• Businesses which are not registered are generally excluded from the Business Frame which is used by Stats SA in the business surveys to assess the formal economy.

• However, non-registered businesses also contribute to the economy of the country

• It is for this reason that Stats SA introduces a survey of employers and the self employed (SESE) in 2001

•SESE is a household based survey that measures the contribution of non registered businesses to the economy.

• The survey also provides information on the characteristics of individuals operating these businesses

• This survey is done once every 4 years

Background to non registered businesses

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Number of persons running at least one business by industry

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2001 11 242 71 1 571 76 131 153

2005 17 201 1 97 1 103 73 59 116

2009 10 102 106 614 41 33 115

Agriculture Manufacturing Utilities Construction Trade Transport Finance Community and social services

Most of the non-VAT registered businesses were operating within the Trade industry -1,6 m in 2001 and 1.1 m in 2009 (Although the number had declined by 614 000 in 2009, Trade was still the highest contributor)

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2001 2005 2009

Per cent

Total 100,0 100,0 100,0

Inherited/family tradition 4,2 3,5 4,7

Unemployed/have no alternative income source 60,6 68,2 68,6

Retrenched 4,7 4,3 3,8

Inadequate income from the other source 12,4 3,8 4,1

I like the activity 4,8 8,2 5,0

I have the skills of this business 5,1 4,1 7,8

I have the equipment for this business 1,2 0,3 0,1

Activity brings high income 2,8 2,6 1,6

Small investment needed 1,8 1,0 0,7

Unhappy with previous work 1,1 1,1 1,9

Other 1,3 2,9 1,7

Unemployment or not having alternative income source (more than 60% in all the three time periods under review) was indicated as the main reason why people decided to start a business

The main reason for starting a business

40

0.0

5.0

10.0

15.0

20.0

25.0%

2001 21.6 1.6 4.6 3.3 3.8 1.2 0.1

2005 12.6 2.9 3.5 3.2 1.4 1.3 0.2

2009 14.9 6.3 5.9 3.2 1.3 1.1 0.4

Trade ConstructionCommunity and social services

Manufact- uring

Finance Transport Agriculture

Proportion of those who did not need money to start a business by industry

• The highest proportion of business owners who did not need money to start their businesses were in Trade.

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Proportion of those who needed money to start a business by

source of money

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

%

Other 25.6 29.4 25.6

Own 74.4 70.3 74.4

2001 2005 2009

• Among those who needed money over 70% used their own money to start their own businesses

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Proportion of those who borrowed money to start a business by

source of money

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

%

2001 4.0 82.9 0.8 5.2 1.6 0.4 5.6

2005 4.8 83.1 6.1 1.0 2.5 2.2

2009 8.4 81.3 6.6 6.0 1.2 3.0

Commercial banks

Friends / relatives

Credit societies

Money lenders/

mashonisas

Business association

NGO/CBO Other

• The majority of persons who borrowed money to start a business, borrowed it from friends or relatives.• The proportion of persons who borrowed from commercial banks increased from 4,0% in 2001 to 8,4% in 2009

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Thank YouThank You