Geographical market analysis
The Tourism Expenditure Survey sampled tourists originating from five main markets: the UK, Germany, Italy, France and the Netherlands.
These five nationalities jointly represented 73 per cent of Malta's tourist inflow during 1998.
Some general observations concerning the data just presented:
- The French have the highest prior to departure expenditure at Lm274. The British and the Germans are similar at Lm231.
- The British feature the highest expenditure during their stay (Lm120) with the French at a low of Lm88.
- The Italians have the highest per person per day expenditure (Lm13.48) while the Germans have the lowest at Lm10.32.
- The Dutch are the highest spenders on food and drink with 52 per cent of their total destination expenditure going into this area. They are also the best restaurant users, spending Lm30.
- The British spend a high Lm11.43 in takeaways as against a French low of Lm4.84.
- Italians are the best spenders on domestic transport at Lm17.56 with the Dutch lagging behind at Lm8.41. The Italians are also the highest spenders on car hire. The British and the Dutch are the highest spenders on public transport (Lm2.33).
- The Germans are the highest spenders on recreation activities spending Lm20.48 each. This accounts for over 20 per cent of their total destination expenditure. The Germans emerge as the highest spenders in the other categories of entertainment namely culture, popular entertainment and sports activities.
- The British are the highest spenders on shopping (Lm30) against the range of Lm16-20 for others. Most shopping expenditure concentrated on souvenirs/ gifts/ duty free.
It is also possible to subdivide the nationality data to feature seasonal variations.
The following indicators are typical examples of this type of analysis:
- British summer tourists spend more per day than the Germans. However Germans arriving during Q1, Q2 and Q4 spend higher than the British.
- Given the Germans' high propensity to spend heavily on recreation, the German spring tourist spends no less than 37.4 per cent of his in-destination budget on such activities which range between cultural activities, sports activities and popular entertainment.
The seasonal economic contribution of tourism was also measured for the study.
Given the fact that survey data is measured in real time and therefore does not feature any time lag distortions as in the case of banking data, the resulting analysis is probably the first realistic assessment of the financial variations brought about by seasonality
Main economic impacts of tourism relate to:
- foreign exchange earnings
- generation of output and value added
- leakages
- contributions to income
- generation of employment
- contributions to government revenues
Foreign exchange earnings:
- 1998 Tourism earnings model -
Lm 319.49 million
- Volume and value of sales by the tourism sector to tourists
- Will generate additional business revenue
- Structure of these earnings will influence results
Four indicators which measure economic activity:
- Gross National Product (value added)
- Imports and outflows (leakages)
- Government income (government revenue)
- Full-time equivalent employment
- All are based on tourists' expenditure (foreign exchange earnings)
Direct level:
- occurs at the point of purchase by the tourist.
- immediate direct economic benefit: GNP, employment, taxation, importation.
- Example - purchase of meal in hotel by tourist.
Indirect level:
- supplier implication - inputs to provide goods and services to tourists
- Example - agricultural sector selling to hotelier.
Induced level:
- through spending and re-spending of disposable household income generated by the direct and indirect impacts.
- Example - employees within hotel and farmers respend the revenue they earned on purchases of basic needs, appliances, education, travel and so on.
Government also interacting:
- government receives and re-spends taxes generated by previous impacts and by its own re-spending behaviour.
- Example - tax revenue from company tax, income tax, levies, value added tax is re-spent by government for recurrent expenditure such as wages, social benefits or for capital projects.
All economic impact measurements have been carried out through the use and application of the Input-Output model.
This provides an indication of the interlinkages among the various sectors making up the economy and a basis to calculate economic impacts.
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