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2. Demand Side Definitions

 

We start with some basic concepts and terms that any working in the tourism sector will be familiar with but, nevertheless, are worthy of further explanation.

'Tourism is defined by the activities of persons identified as visitors.  A visitor is someone who is making a visit to a main destination outside his/her usual environment for less than a year for any main purpose [including] holidays, leisure and recreation, business, health, education or other purposes….This scope is much wider than the traditional perception of tourists, which includes only those travelling for leisure.'

'As a demand side phenomenon, the economic contribution of tourism has to be approached from the activities of visitors….However it can also be viewed from the supply side… as a set of …activities that cater mainly to visitors….'

(Extracts from IRTS 2008, paras 1.9, 1.9, 1.12 and 2.9)

If a resident is travelling within their own country then we would refer to this as domestic travel, whereas travel to a country by people who live outside of that country is called inbound travel, and travel to another country by UK residents, for example, is called outbound travel.

A trip (or visit) is a round trip and is the time of departure from a person’s usual residence until they return. The trip is made up of visits to different places.

An Inbound trip includes travel between arriving in a country and leaving, whilst Domestic or outbound trips include travel between leaving the place of residence and returning.

Domestic in this instance incorporates the main destination inside the traveller’s place of residence, while an outbound trip has the main destination outside the area of residence.

2.1 The Usual Environment

The International Recommendations on Tourism Statistics (IRTS, 2008) from the United Nations World Tourism Organisation (UNWTO) defines the Usual Environment as, ‘the geographical area within which an individual conducts his/her regular life routines.’

The UNWTO suggests a number of criteria to determine what is the usual environment except that it should be based on the following criteria:

  • frequency of the trip (regular everyday trips would be excluded)

  • duration of the trip (usually taken to be of more than three hours when considering excursionists)

  • the crossing of administrative or national borders (this could present problems if an individual lives close to an administrative border, for example, a local authority)

  • distance from the place of usual residence (there is no particular guidance on this issue and to some extent it is country and locality specific)

In addition to using the frequency and duration criteria to determine the usual environment, it is recommended that in practice the crossing of administrative borders be combined with the distance criterion to establish the limits of the usual environment for the following reasons:

  • administrative units might have very different sizes even within a country

  • metropolitan areas may stretch over administrative borders even though they represent a compact or contiguous geographical area

  • the place of usual residence of some individuals may be very close to the administrative borders so that their crossing might not be relevant for tourism analysis

This is specific to individuals in that two people in the same household could possess different usual environments.

The usual environment of an individual includes the place of usual residence of the household to which he belongs, his own place of work or study and any other place that he visits regularly and frequently, even if this place is away from his usual residence.

It is important to also recognise the importance of second homes in this context which are visited by members of the household mostly for the purposes of recreation, vacation or any other form of leisure.

One approach to defining the usual environment is to determine where people normally carry out everyday activities, such as the area where they live, the area where they work, and the area where they go to shop.

Trips away from these locations would then be classed as outside the ‘usual environment’ and could qualify as tourism trips. For excursionists further detail can be included such as how long the trip lasted (more than three hours, for instance), or how far the excursionist travelled to get to the destination and back.

2.2 How do we define visitors?

There are two main categories to consider when we try to define a visitor and these are whether the visitor is International or Domestic.

International visitors are defined as such by the purpose of their trip and include returning resident outbound visitors and arriving inbound visitors in the case of non-residents.

As a visitor travels within his/her country of residence, he/she is a domestic visitor and his/her activities are part of domestic tourism.

Box 1 Visitor classification

  • domestic tourism comprises the activities of a resident visitor within the country either as part of a domestic trip or part of an outbound trip
  • inbound tourism comprises the activities of a non-resident visitor within the country on an inbound trip
  • outbound tourism comprises the activities of a resident visitor outside the country, either as part of an outbound trip or as part of a domestic trip

These can be combined to form a further classification of visitors:

  • Internal Tourism = domestic and inbound tourism

  • National Tourism = domestic tourism and outbound tourism

  • International Tourism = inbound and outbound tourists

These three classifications are important as they are used, for example, in Eurostat regulations on tourism statistics.

Visitors

Turning to those who make trips (Visitors), we can point to a definition commonly used by those undertaking analysis in the tourism sector:

'A Visitor is a traveller taking a trip to a main destination outside his/her usual environment, for less than a year, for any main purpose (business, leisure or other personal purpose) other than to be employed by a resident entity in the country or place visited.' (IRTS, 2008)

Travel of domestic, inbound, or outbound visitors is called domestic, inbound or outbound tourism, respectively. Tourism is therefore a subset of travel and visitors are a subset of travellers.

A further important factor is the duration of a trip. A visitor is classified as a tourist if his/her trip includes an overnight stay, or excursionist (sometimes referred to as day visitor) otherwise.

In the ETRIP document on defining tourism terms visitors are defined in three categories;

  • 'Tourists who are visitors staying away from home for one or more nights for any of the purposes noted under tourism and who are not remunerated at the places visited. Within the UK such visitors may be domestic (from within the UK) or inbound (resident in other countries). The range of purposes includes social reasons for visits such as weddings and other family gatherings and events.

  • Same day visitors spending at least three hours away from home outside their usual environment for general leisure, recreational and social purposes but not staying away overnight. In principle business visitors away from their usual working environment for day visits should be included (these are distinguishable on the International Passenger Survey but not on surveys of domestic day visits). Also known as tourist day visitors.

  • Leisure day visitors spending less than three hours away from home but outside their usual environment, for general leisure, recreational or social purposes'. (ETRIP Tourism Terms paper, 2011)

Sources of information and statistics on the various types of visitor activities can be found in Appendix Two to this report.

2.3 Further demand side definitions

A travel party refers to visitors travelling together on a trip and whose expenditures are pooled. This differs from organised ‘group’ travel where individuals travel as part of a larger group but are not pooling expenditure.

Main Purpose of Trip. This concept helps to determine whether the trip is actually a tourism trip or not, and for characterizing tourism expenditure patterns.

It is important to note that each tourism trip has one and only one main purpose though a visitor can also undertake secondary activities while on his/her trip.

The main purpose of tourism trips can be classified as follows in Box 2 (IRTS, 2008).

Box 2 Purpose of Trip

1. Personal
1.1. Holidays, leisure and recreation
1.2. Visiting friends and relatives
1.3. Education and training
1.4. Health and medical care
1.5. Religion/pilgrimages
1.6. Shopping
1.7. In Transit
1.8. Other
2. Business and professional

It is important that these trip purpose categories are adhered to when undertaking visitor surveys, for example. Further guidance is provided on this in Guidance Note Three in this series.

Duration of a trip or visit. The volume of tourism can be characterised by number of nights, as duration of stay is highly correlated with total expenditure.

The duration of a trip that includes an overnight stay is expressed in terms of the number of nights.

When collecting data on the duration of a trip it is necessary, as a minimum, to classify this according to short breaks and longer periods, for example one to four nights, and four nights and longer.

At the local level of data collection a finer level of detail may be required than this and this will depend on the use to which the data is required, for example for marketing purposes.

Origin and Destination. When dealing with Inbound trips it is essential to classify all arrivals by country of residence rather than nationality.

This is an issue for national surveys in particular, for instance the International Passenger Survey (IPS).

Outbound trips by UK residents are classified by the main destination of the trip (in other words the country visited).

At the subnational level, it is essential to characterise trips according to the place of usual residence of the visitor, his/her personal characteristics, and the main destination of the trip.

For same-day visits or excursions this may be further complicated by the fact that the trip origin could be the location of an overnight visit (not the home address) and the day trip is made from that location (for example, from a hotel, caravan park, B&B). This origin information should be considered when collecting visitor information.

Modes of transport. We would normally refer to the main mode used by the visitor on the trip, and this can be established in three different ways:

  • the mode on which the most distance is covered

  • the mode on which most time is spent

  • the mode which has the highest share of the total transport cost

The modes of transport to be considered, for example in a visitor survey, should be based on the classification shown in box 3.

Box 3 Classification of modes of transport

1. Air
1.1 Scheduled flight
1.2 Unscheduled flight
1.3 Private aircraft
1.4 Other modes of air transport

2. Water
2.1 Passenger line and ferry
2.2 Cruise ship
2.3 Yacht
2.4 Other modes of water transport

3. Land
3.1 Railway
3.2 Motor coach or bus and other public road transportation
3.3 Vehicle rental with driver
     (i) taxis, limousines and rental of private motor vehicles with driver
     (ii) rental of man or animal drawn vehicles
3.4 Owned private vehicle (with capacity for up to 8 persons)
3.5 Rented vehicle without operator (with capacity for up to 8 persons)
3.6 Other modes of land transport: horse back, bicycle, motorcycles, etc.
3.7 On foot


Types of accommodation. There are many different types of accommodation available to visitors and these are detailed in the International Recommendations on Tourism Statistics (IRTS, 2008). This can extend from a five star hotel to staying with friends while on a trip.

However, when trying to assess the impact of various types of accommodation in terms of turnover or employment, it is helpful to follow a breakdown based upon ‘Standard Industrial Classifications (SIC)’, such as the UK SIC 2007.

These are summarised below and provide a minimum range of accommodation that we might wish to collect business data on, particularly, but is also of use when asking visitors what type of accommodation they have stayed in:

  • hotels and similar accommodation

  • youth hostels

  • recreational vehicle parks, trailer parks and camping grounds

  • holiday centres and villages

  • other holiday and other collective accommodation (for example, apartments, cottages, guest houses)

  • other accommodation (for example, Halls of residence, Hostels, railway sleepers)

  • rented accommodation (short term holiday lettings)

  • second homes

Water borne accommodation (for example, canal boats or sailing boats) is not included under this accommodation category in the SIC. This type of activity is identified separately under SIC 773 renting and leasing of water passenger transport, or SIC 522 Service activities incidental to water transport which would include harbour and berthing activities.

2.4 Tourism Expenditure

Tourism Expenditure refers to the amount paid by all categories of visitor noted in section 2.2 for the acquisition of consumption goods and services, as well as valuables, for and during tourism visits/trips.

It includes expenditures by visitors themselves, as well as expenses that are paid for or reimbursed by others.

Any consumption goods or services can be included. This may include standard products such as accommodation or food, but also other products such as valuables (works of art etc.), durable consumer goods (computers etc), all food prepared and without preparation, all manufactured items whether locally produced or imported, all personal services and so on.

2.4.1 How do economies benefit from tourism expenditure?

There are various categories of tourism expenditure which are summarised in Box 4.

Box 4 Categories of tourism expenditure

  • domestic tourism expenditure: tourism expenditure of a resident visitor within the country of reference
  • inbound tourism expenditure: the tourism expenditure of a non-resident visitor within the economy of reference
  • outbound tourism expenditure: tourism expenditure of a resident visitor outside the economy of reference
 
From these definitions we can derive two more:

Internal tourism expenditure comprises all tourism expenditure of visitors both resident and non-resident, within the economy of reference. Internal tourism expenditure = domestic tourism expenditure + inbound tourism expenditure. It also includes imports sold to visitors.

National tourism expenditure comprises all tourism expenditure of resident visitors within and outside the economy of reference. National tourism expenditure = domestic tourism expenditure + outbound tourism expenditure.

It is important to note that goods bought in the country of origin before an international trip are considered tourism expenditure, but should be attributed to the country of origin, and not to the country of travel.

2.4.2 Classification

In order to relate demand to supply, not only should total tourism expenditure be measured, but the components which make it up.

Thus, data collected for demand and supply should be classified in a uniform way in which to make both measures comparable, and these are set out in Table 2 below in terms of the services that tourists consume and the activities that generate these.

Table 2: The Tourism Industries and Consumption Products

List of categories of tourism characteristic consumption products and tourism characteristic activities (tourism industries)
Products Activities

1. Accommodation services for visitors

1. Accommodation for visitors

2. Food and beverage serving services

2. Food and beverage serving activities

3. Railway passenger transport services

3. Railway passenger transport

4. Road passenger transport services

4. Road Passenger transport
5. Water passenger transport services 5. Water passenger transport

6. Air passenger transport services

6. Air passenger transport

7. Transport equipment rental services

7. Transport equipment rental

8. Travel agencies and other reservation services

8. Travel agencies and other reservation services activities

9. Cultural services

9. Cultural activities

10. Sports and recreational services

10. Sports and recreational activities

11. Country-specific tourism characteristic goods

11. Retail trade of country-specific tourism characteristic
goods

12. Country-specific tourism characteristic services

12. Country-specific tourism characteristic activities

(source: IRTS, 2008)

When collecting information on tourism expenditure (for example through visitor surveys), it is important that the tourism characteristic products highlighted in Table 2 are covered in terms of the breakdown in Box 5.

As far as ‘country specific goods and services’ are concerned, in the UK the TIU has added SIC Codes on the activities of conference and events organisers to reflect the importance of these activities for business tourism in the UK. The full list of SIC codes for the tourism characteristic activities is in Appendix Three.

Box 5 Tourism Expenditure Categories

 

  • package travel, package holidays and package tours

  • accommodation

  • food and drink

  • local transport

  • international transport

  • recreation, culture and sporting activities

  • shopping

  • others


This list may be added to, for example through further delimiting expenditure on shopping into durable or valuable goods and perishable goods, for example food and drink not consumed on the establishment premises.

Tourism characteristic products are those that satisfy one or both of the following criteria:

  • tourism expenditure on the product should represent a significant share of total tourism expenditure

  • tourism expenditure on the product should represent a significant share of the supply of the product in the economy. This criterion implies that the supply of a tourism characteristic product would cease to exist in meaningful quantity in the absence of visitors (IRTS, 2008)

2.5 Visitor Economy

In the UK tourism sector there has, in recent years, been significant usage of the term 'visitor economy' when referring to tourism. The origin of the term is a little unclear but, nevertheless, it has gained widespread usage in the UK so is worthy of consideration here.

The tourism terms work of the English Tourism Research and Intelligence Partnership has provided the following definition for the visitor economy:

'The visitor economy is a fluid, overarching term that refers to the area within which visitor activity and its primary and secondary consequences upon the economy take place. It can vary significantly in terms of scale and scope and can be used to define international, national and subnational geographical areas and need not necessarily be confined by existing, historical boundaries. The term visitor economy is the arena for staying and non-staying visitors together with the activities of public and private sector bodies that are directly or indirectly involved in supplying the goods and services for visitors, as well as the upkeep and development of the public realm including the infrastructure within which, and through which, visitor activities take place. The term ‘tourism economy’ is a sub-set of the visitor economy and captures those aspects related to only those visitors who are staying within a visitor economy for at least one night and less than one year and not being remunerated for their activities within the visitor economy'.

(ETRIP Tourism Terms paper, 2011)

The ETRIP tourism terms paper also defines 'visitor impact' and 'visitor destinations', and we provide an excerpt from the report here:

'Visitor impact refers to all of the direct, indirect and induced economic, environmental and socio-cultural effects arising from visitor activities and the supply of goods and services to visitors that take place within a defined economy. The impacts, both primary and secondary, on the visitor economy, its environment, people and public realm can be positive and/or negative.

'Visitor destinations are defined as places with identified boundaries that are recognised as visitor destinations and for which it is possible to measure the demand for and supply of tourism services (visitor economy). Visitor destination is preferred to ‘tourism destination’ because by definition it includes all categories of visitor.

(ETRIP Tourism Terms paper, 2011)

These terms relating to a ‘visitor economy’ clearly indicate a much wider definition than that for tourism, encompassing direct and indirect economic effects, public and private sector supply of goods and services and upkeep of the public realm and infrastructure.

Use of this term presents particular challenges if we are to accurately collect statistics and other information about the phenomenon.

This is in contrast to a consideration of the measurement of tourism which is subject to internationally agreed measurement recommendations and methodological frameworks.

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