TOURISM IN ISRAEL SATELLITE ACCOUNT (TSA) by youmustknowme

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									1.1 General
Tourism has received a great deal of attention in recent years among decision-makers,
academics and the general public.
Due to social and economic changes that occurred in the twentieth century, tourism has
become a consumer product. A widespread industry has developed alongside it, which
includes tourist agencies, tourist guides, accommodation services, etc.
With the rise in leisure hours, and the development of varied tourism services, tourism has
become more accessible to a wider variety of population groups.
Thus, for instance, international tourism has recorded a rise (excluding 2001) in inbound
tourism over the years in all parts of the world (according to WTO 1 data).

              Diagram 1: Inbound tourism throughout the world (in millions)
    800

    700

    600

    500

    400

    300

    200

    100

      0
       1950      1960   1965      1970    1975     1980        1985       1990     1995    2000   2003

In Israel, as in the rest of the world, since 1950 there has been a continuous rise in visitor
arrivals, excluding a number of periods of a crisis in inbound tourism, which occurred as a
result of wars or terror incidents.

                  Diagram 2: Arrivals of visitors to Israel (in thousands)
    3,000

    2,500

    2,000

    1,500

    1,000

     500

          0
          1950   1955   1960      1965   1970    1975       1980   1985     1990    1995   2000   2003


1
    World Tourism Organization.


                                                 - XIII -
Since the „80‟s, academics and international tourism organizations have studied the subject of
tourism and its influence on the economy, for the purpose of developing a system that will:
-      Present tourism as an economic phenomenon;
-      Characterize the consumers of the industry 1;
-      Enable decision-makers to understand what role tourism plays in the economy;
-      Provide information on employment in the tourism industry, directly and indirectly;
-      Provide information on investments in tourism;
-      Provide information on products resulting from tourist consumption.
During 1999-2003 the WTO undertook the goal of ensuring that all its member countries
build a uniform statistical system that would assess the economic effect of the tourism
industry. For this purpose, detailed instructions were issued, and a number of papers were
written within the framework of the statistical committee of the organization.
Thus the system of the TSA2 was formed. It provides statistical tools for analyzing tourism as
an economical phenomenon, with the help of a network of tables with an Input-Output form,
but focusing on the subject of tourism.
The present publication contains: definitions of the TSA system and TSA tables of tourism in
Israel, Israeli sources of the data, an international comparison and a dictionary of expressions
(Appendix A).


1.2 Definitions

The purpose of this publication is to quantify the economic contribution of the tourist activity
in the Israel to the economy or, in other words, the value added of tourism, within the
framework of rules of national accounting, so that it will be possible to compare the data with
those of other industries in the economy and with international data.
As stated, the main methodological tool with which this has been done was developed by the
WTO3, and is the TSA – Tourism Satellite Account system.
Following are a number of operating definitions essential for understanding the subject, which
we will present before approaching the essence of the discussion.
Tourist activity is defined as the activities of persons travelling to, and staying in, places
outside their usual environment for not more than one consecutive year, with the purposes of
their travel being: recreation, visiting relatives, business, health treatments, pilgrimage, etc.
(WTO definition).



1
    This publication relates to tourism as an industry, despite the fact that in the Standard Industrial
    Classification of All Economic Activities it is not so defined.
2
    Tourism Satellite Account.
3
    World Tourism Organization.


                                                 - XIV -
Thus, a tourist is defined as a person travelling to a place other than that of his/her usual
environment for less than 12 months, and whose main purpose of trip is other than receiving
wages or salary from the place visited.
Therefore, the definition of tourists does not include:
     Foreign workers;
     Immigrants;
     Diplomats;
     Ship or aircraft crews.
An additional subject that needs to be made clear is the term Usual Environment. This term
differentiates tourists from the rest of the passengers.
It is difficult to set a single criterion to define usual environment. Generally speaking, a place
of daily activity, such as a place of residence, studies, work and recreation, can be considered
a usual environment. A quantitative criterion for leaving the usual environment can be the
distance in kilometers or the number of hours of the stay. An additional criterion is the
frequency of visits; places which the passenger visits often (even if they are distant from his
area of residence) are considered part of his usual environment.
In Israel it has been decided to use the criterion of hours. Leaving for more than five hours
(including travel time and activity) can be considered leaving the usual environment.
An additional distinction that is important for constructing the system of a Tourism Satellite
Account is between the various types of tourists.
Three streams of tourism are recognized:
     Inbound tourism – citizens of other countries who come to visit Israel;
     Outbound tourism – Israeli citizens who leave to visit abroad;
     Internal tourism – Israelis travelling within Israel.
With regard to inbound tourism, the definition of usual environment is less problematic.
Every crossing of Israeli borders for the purposes listed above, can be considered as leaving
the usual environment.
In internal tourism the distinction between usual environment and other environments is more
problematic. Therefore, in the questionnaire which was prepared on the subject of internal
tourism in Israel (see Chapter 5, which relates to internal tourism) there is no formal
definition of usual environment, which may confuse the respondent; instead, the words
“recreation and trips” are used, under the assumption that these activities are by definition
conducted outside the usual environment.
Additional definitions can be found in the Glossary in Appendix A.




                                              - XV -
1.3 The process of constructing the system of a Tourism Satellite Account
The Tourism Industry spreads over various parts of the economy: hotels, restaurants,
transportation, retail sales and many others. This widespread distribution makes it difficult to
achieve a comprehensive view on the subject of tourism and assess its influence on the
economy.
Therefore, the first phase in calculating the value added of the tourism industry is the
definition of its components.
Contradictory to the other industries in the economy, whose nature is determined by their
production activity, the tourism industry is determined by the type of consumption.
In general, it can be said that if the consumption of a certain product/service is by a tourist,
under certain circumstances (which will be listed below) it is possible to define that
product/service as a tourism product, and the producer of that product/service as belonging to
the tourism industry.
The WTO‟s recommendation is to compile a list of all those products and services according
to the SNA 93 Economic Classification 1, which differentiates between two groups:
 All the goods/services whose consumption, in the absence of tourists will be significantly
  reduced – and these are products which are defined as characteristic products
  (henceforth, characteristic).
 All the goods/services which are consumed by tourists in significant quantities for the
  tourist or producer, but are not included in the list of characteristic products, and they are
  products defined as connected products.
In accordance with this distinction, and in consideration of the unique characteristics of
tourism in Israel, a list of goods and services was compiled, and constitutes a base for the
satellite account of tourism in Israel.
Following is the list of goods/services, divided into three main groups:
1.      Characteristic products;
2.      Connected products;
3.      All other goods and services.




1
     Recommendations of the System of National Accounts – 1993.


                                                  - XVI -
Code in the input-output system                                       Type of activity
                                          a.       Characteristic products
       1;2
    540                                   Hotels and accommodation services
          1
    560                                   Restaurants and dining services
                                          Transport services
    603                                        Railways
    600                                        Buses, underground railways and cable-cars
    601                                        Taxis
    620                                        Air transport
    631                                        Airport services
                                          Services connected with cars
    710                                        Car rental
    501                                        Maintenance and repair of vehicles
    640                                        Parking
    230                                        Sales of fuel
    632                                   Travel and tourist agencies
    940                                   Recreational, cultural, sporting activities
    899                                   Museums and other cultural services – non-profit institutions
    680                                   Insurance
    701                                   Apartment rental
    20-96, 140-163, 180-188, 220,         b. Connected products: agriculture,
     370, 380-382, 5003, 6023                 food, clothing, publication, diamonds, gold- and silver-smithing
    All other industries                  c.       All other goods and services

A system of tables was created according to the industries listed in the above table (following
the recommendations and instructions of the WTO), in the form of supply-and-demand tables
and the uses tables of an input-output system, while focusing on tourism‟s share of demand
(consumption) and of production.
The last input-output table created in Israel was for 1995, and therefore, all the calculations
were conducted for that year. In the future, when supply-and-demand tables are calculated for
each year, it will be possible to conduct calculations for other years.
Being based on an input-output system, which includes all transactions in the economy,
makes it possible to calculate the indirect influence of tourism on the economy by using
total coefficients.
The following chapter presents a summary of the findings, before the detailed description of
the table structure and the obtained results.

1
      Not including income from events.
2
      In input-output tables, does not include the value of food, which is included in TSA tables.
3
      Part of the industry belongs to the category of goods/services connected with tourism, and part to the
      category of the remaining goods and services.


                                                          - XVII -

								
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