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PLACE YOUR IMAGE HERE, CROP THE IMAGE TO FIT FORMATTING PALATTE: PICTURE: CROP TOOL. Pro Poor Tourism Yield Larry Dwyer University of NSW
Background q Measures of Tourism Yield have been developed by Australian Researchers (Dwyer, Forsyth, Jago, Fredline, Deery, Lundie) Ø Ø Ø Report for STCRC Tourism Economics Journal of Sustainable Tourism Review International Journal of Tourism Research
Pro-poor Tourism q Pro-poor tourism researchers are attempting to develop measures of pro-poor tourism yield q MPDF Workshop in Cambodia, December 2008 Ø This workshop considered two broad sets of questions: • How, when and where does/can tourism alleviate poverty and/or have a development impact? • How can all the stakeholders (public, private, donors) achieve maximum ROI in the short, medium and long term? q What are the links between the two research agenda?
AIMS q What are the links between the two research agenda? q First, provide a overview of yield measurement in the tourism literature q Second, provide an overview of the MPDF method for developing pro-poor yield measures, discussing the advantages and limitations q Third, discuss ways that the MPDF pro-poor measures can be improved so as to provide better indicators of the extent to which tourism alleviates poverty
Standard Yield Measure Yield as expenditure per trip or by night associated with different market segments
Advantages of Expenditure Yield Measures q delivers a practical outcome that drives Ø tourism planning Ø new product development Ø marketing Ø towards the highest yielding niche markets q can be employed by tourism operators at the level of the individual firm and also by destination managers
Limitations of Expenditure Yield measures #1 • gross expenditure does not in itself provide information on what goods and services tourists purchase • it is of little value per se to operators since it provides no information on the sectors in which the money is spent.
Limitation #2 • tourist expenditure is not an indicator of profitability to firms • In focusing on sales revenues, the expenditure measures neglect the aggregate costs of providing the services to each segment
Limitation #3 • gross tourist expenditure is only a partial indicator of the impacts on the economy because it includes the import content of the goods and services purchased by tourists.
Limitation #4 • the expenditure measure of yield does not indicate the economic impacts of tourist expenditure • These impacts include contribution to Gross Domestic (or regional) Product, Gross Value Added, and employment • Tourist expenditure is not directly proportional to its economic impacts
Limitation #5 • Expenditure measures don’t provide information on spread of impacts in the wider destination • it may be useful to know where the visitors in each market segment spend their money. • the economic effects on income and employment will differ according to the location of the tourist expenditure
Limitation #6 • expenditure injections per se tell us nothing about the social or environmental costs and benefits associated with different visitor market segments
TSA based Yield Measures q Yield as Contribution to Gross Domestic Product Ø Tourism Yield = Contribution of tourism to GDP / tourism consumption of the goods and services produced by the tourism industry Ø Yield niche market = Contribution to GDP of sales to the particular niche market / tourism consumption by the niche market q Yield as Contribution to Tourism Employment Ø Tourism Employment Yield = Contribution of tourism to employment / tourism consumption of the goods and services produced by the industry Ø Tourism Employment Yield for a niche market = Contribution to tourism employment of sales to the particular niche market / tourism consumption by the niche market
CGE based Economy wide yield measures q Yield as impact on Gross Domestic Product Ø Tourism Yield = impact on GDP / tourism expenditure Ø Yield niche market = impact on GDP of sales to the particular niche market / tourism expenditure by the niche market q Yield as impact on employment Ø Tourism Employment Yield = impact on employment / tourism expenditure Ø Tourism Employment Yield for a niche market = impact on employment of sales to the particular niche market / tourism expenditure by the niche market
Real GDP per visitor and per visitor night by Origin Country
5 types of Pro poor Yield measures 1. Local expenditure yield Plus three livelihood measures: 2. employee pro-poor income yield 3. tourism supplier pro-poor yield 4. direct seller pro-poor yield Plus 5. pro-poor employment yield
Local Expenditure Yield q to derive Local Expenditure Yield Deduct the amount of leakages from the gross expenditure data Ø This involves estimating the import content of each of the different types of goods and services purchased by tourists Ø Thus we determine which tourist markets have the greatest local expenditure effect
The following Local Expenditure Yield measures can be estimated: q Nationally, for key tourist markets per trip, and per dollar spent eg. average local expenditure per day in Cambodia by visitor from USA q Nationally, for key tourist markets by sector eg. average local expenditure per day on accommodation, F+B, shopping, transport) in Cambodia by visitor from USA q Regionally, for key tourist markets per trip and dollar spent eg, average local expenditure per day in Siem Reap by visitor from USA q Regionally, for key tourist markets by sector eg. average local expenditure per day on accommodation in Siem Reap by visitor from USA
Total expenditure $ Per $ Local USA Local UK USA Σ Σ Total Expenditure UK Σ Σ Per $ $ Accom F&B USA Accom F&B UK
2. Pro-poor employee income yield measure q Pro-poor employee income yield by sector = propoor employee income generated by sector/ total employee income generated by the sector (total and per $ spend) q Pro-poor employee income yield by visitor market = pro-poor employee income generated by visitor market/total employee income generated in total or by sector (total and per $ spend) q Pro-poor employee income yield = pro-poor employee income / total employee income
Total employee income $ Per $ Pro poor Accom F&B Shopping Accom F&B USA F&B Shopping Σ Σ Total employee income Accom Σ Accom F&B UK Σ Per $ Accom F&B USA Accom F&B UK
3. tourism supplier pro-poor income • Pro-poor supplier income by sector: For each tourism sector estimate sector purchases from poor suppliers as proportion of total inputs purchased • Pro-poor supplier income by sector by visitor market: For each tourism sector estimate sector purchases from poor suppliers as proportion of total inputs purchased, by visitor market percentage of total market for that sector • Aggregate measure of pro-poor supplier income by visitor = pro-poor supplier income per dollar spent by tourists from each visitor market • Aggregate measure of pro-poor income: add the pro-poor supplier income across all sectors
Total Supplier income $ Per $ Pro poor Accom F&B Shopping Accom F&B USA F&B Shopping Σ Σ Total Supplier income Accom Σ Accom F&B UK Σ Per $ Accom F&B USA Accom F&B UK
Direct Seller pro-poor income q The estimation of direct sales to tourists by people from poor backgrounds (souvenirs, drinks etc) poses measurement difficulties. But, to derive yield measures Ø Estimate gross expenditure associated with different visitor markets Ø Estimate the amount of expenditure that is allocated directly to sellers from poor backgrounds Ø can be converted to a yield measure for each sector and converted into per dollar spent
Direct Seller income Per $ Drinks Souvenirs Direct Seller income Drinks Souvenirs Per $ USA UK
Pro-poor Employment Measures of Yield • Pro-poor employment yield measures can be expressed as numbers of persons from poor backgrounds who are employed as income earners in the tourism industry. • Pro-poor employment by sector: numbers of persons from poor backgrounds who are employed in each sector as income earners in the tourism industry as employees, suppliers or direct sellers • Pro-poor employment by tourist market = numbers of persons from poor backgrounds who are employed as income earners in the tourism industry as employees, suppliers or direct sellers supported by the expenditure of each visitor market
Employment No. of persons Accom F&B No. of persons USA UK JAP
Aggregate Measures q Pro-poor income = Employee income + supplier income + direct seller income q Pro-poor yield = pro-poor income/tourist expenditure q Pro-poor income by sector = pro-poor income by sector/ tourist expenditure for that sector q Pro-poor income by visitor market = pro-poor income by visitor market/ visitor expenditure for that market q Pro-poor employment by sector and visitor market
Σ Pro poor income ° ° T exp Pro poor yield over time ° Time Pro poor income T exp ° ° ° By sector ° Time Pro poor income T exp ° ° By visitor market Time
Conclusions • Demonstrates Importance of construction of TSA in developing economies • Demonstrates Importance of construction of CGE in developing economies • Work is continuing to refine and develop relevant measures of pro-poor tourism yield
Thank You !!!!!!
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