Explaining Overseas Tourism Expenditure across CSO Publications

Tourism and Travel

As mentioned above, the Tourism and Travel release uses the raw data immediately after it is collected. The data is collected in two ways, through the Passenger Card Inquiry and the Household Travel Survey.

The Passenger Card Inquiry collects information from incoming and departing passengers at seaports and airports. It captures information such as the purpose of journey, length of stay, country of residence, type of accommodation, and approximate expenditure. The Household Travel Survey collects information from private households via postal survey to measure outbound and domestic travel patterns by inquiring about residents’ overnight stays, the purpose of each journey, the type of accommodation used, and related expenditure. Each month, over 4,600 households (or approximately 0.3% of all private households) are randomly selected from the Electoral Register, where the selection is stratified by District Electoral Division.

Figure 2 illustrates the evolution of overseas tourism and travel expenditure and earnings during the period 2010-2019 as shown in the Tourism and Travel release. From 2010 to 2013, the net result was negative, meaning that Irish residents spent more abroad than non-residents spent in Ireland. The net result was positive from 2014 to 2019. In 2019, non-residents spent €370m more on overseas trips to Ireland than Irish residents spent on trips abroad.

Defining overseas tourism expenditure in the Tourism and Travel release

The Tourism and Travel release defines total tourism and travel expenditure as the amount paid for the acquisition or consumption of goods and services for one’s own use or for use by others, for and during trips. A trip is defined as a journey (usually including a return) from one place to another, for any purpose (i.e. both tourism and non-tourism), by all travellers excluding air and sea crew and commercial lorry drivers. In this note, we are looking specifically at overseas trips and the associated overseas tourism and travel expenditure.  

A one-year residency threshold applies in the Tourism and Travel release methodology. This means that those who resided in Ireland for over one year leading up to the time when they are surveyed are considered Irish residents in these results. Similarly, those who resided outside of Ireland for over one year leading up to the time when they are surveyed are considered non-residents. ‘Overseas travellers’ include both non-residents on a trip to Ireland and Irish residents on a trip abroad.

The term ‘overseas tourism and travel earnings’ refers to the total expenditure by overseas travellers while in Ireland plus fares paid by them to Irish air and sea carriers. The term ‘Overseas tourism and travel expenditure’ refers to the total expenditure of Irish residents on overseas trips including fares, less fares paid by them to Irish air and sea carriers. In other words, the tourism and travel methodology includes fares, but only where the traveller has a different country of residence to the air or sea carrier by which they travel.

These figures refer to expenditure by the travellers themselves as well as expenses that are paid for or reimbursed by others. For example, expenses paid by another person (e.g. a gift) or expenses paid directly by the employer for employees on business travel are included in the figures published by the Tourism and Travel section i.e. the figures shown in Table 1 and Figure 1. These values do not include purchases by travellers of land, real estate or motor vehicles.

Balance of Payments

Balance of Payments figures are prepared using the data from the Tourism and Travel release. After the necessary adjustments to agree with Balance of Payments methodology, the data is used for compiling the Current Account in the International Accounts publication. These further adjustments result in the final figures (shown in Figure 3) being different from the equivalent final figures published in the Tourism and Travel release (shown in Figure 2).

Also, the labels used to refer to these statistics are different in each publication. In Tourism and Travel, the term ‘overseas tourism and travel earnings’ is used, but in the Balance of Payments, the equivalent statistic is labelled ‘the tourism and travel current account credit’ or ‘tourism and travel exports.’ Similarly, in Tourism and Travel the term ‘overseas tourism and travel expenditure’ is used, but in the Balance of Payments the equivalent statistic is labelled ‘the tourism and travel current account debit’ or ‘tourism and travel imports’

Balance of Payments Adjustments

What are the adjustments under Balance of Payments methodology that make the figures in International Accounts different from those in Tourism and Travel? The list below details each of these adjustments in turn.

1. Exclusion of fares: The Balance of Payments methodology dictates that all travel fares i.e. payments to sea and air carriers, should be excluded from the tourism and travel figures. The tourism and travel current account credit item therefore represents the expenditure of non-resident travellers in Ireland other than their payments to Irish sea and air carriers for travel fares. Non-resident expenditure on fares is then recategorized under the transport credit item in the Balance of Payments. The tourism and travel current account debit or import item captures expenditure by Irish residents on overseas travel. Ideally, fares paid by Irish residents to non-resident carriers would be included under transport debits / imports, mirroring the treatment of transport credits / exports. However, due to the difficulty of identifying these payments, fares paid by Irish residents to non-resident carriers are generally included in the tourism and travel debit / import item rather than being more appropriately categorised under transport.

2. Exception to one-year residency threshold for students: Just as in the Tourism and Travel methodology, a one-year residency criteria applies in the Balance of Payments. This means that if a person has resided in Ireland for over 365 days prior to being surveyed, they are considered to be resident. Likewise, if a person has resided abroad for over 365 days prior to being surveyed, they are considered to be a non-resident. However, an exception is made for students, meaning that even those students who have resided in Ireland for more than one year are considered non-residents, and their expenditure is therefore included in the tourism and travel items in the Current Account of the Balance of Payments. It should be noted that the figures for the expenditure of international students in Ireland, which is a component of the tourism and travel current account export item, was revised for 2018 and 2019. These revisions resulted in more expenditure by international students being captured, pushing up the tourism and travel export figure for these years.

3. Cross-border shopping: It is common practice to cross the border for shopping trips, for example, when the exchange rate is favourable, and this is also accounted for in the Balance of Payments.

4. Imputed rent: Finally, there is an adjustment made for imputed rent regarding those individuals who have holiday homes either in Ireland or abroad.

National Accounts

The National Accounts methodology uses Balance of Payments final figures as the starting point for the compilation of Consumption of Personal Expenditure statistics. These statistics are published in the National Income and Expenditure publication and in the Quarterly National Accounts release. The final figures in the National Accounts differ from those in Tourism and Travel and the Balance of Payments and are shown in Figure 4 below.

Again, different labels are used in the National Accounts publication. Instead of ‘overseas tourism and travel earnings’ (which is used in Tourism and Travel) or ‘tourism and travel exports/credits’ (which is used in Balance of Payments), the label ‘expenditure by non-residents’ is used. Instead of ‘overseas tourism and travel expenditure’ (which is used in Tourism and Travel) or ‘tourism and travel imports/debits’ (which is used in Balance of Payments), the label ‘expenditure outside the state’ is used in the National Accounts publication.

National Accounts Adjustments

Departing from the Tourism and Travel and Balance of Payments methodologies, the National Accounts methodology involves removing all business expenditure, as well as fares, to arrive at personal tourism and travel expenditure only.

The figures for business expenditure exports and imports are taken directly from the Tourism and Travel release (with the former coming from Table 7 and the latter coming from Table 10 in 2019). Fares are already excluded from the export figure for business expenditure, whereas fares are included in the import figure. A proportion of all fares is estimated to be business-related, and this is subtracted from the business expenditure import figure.

The export figure for business expenditure is subtracted from the tourism and travel export item in the Current Account. This results in the ‘Expenditure outside the State’ component of Ireland’s total personal consumption expenditure. The import figure for business expenditure, with fares removed as outlined above, is subtracted from the tourism and travel import item in the Current Account. This results in the ‘Expenditure outside the State’ component of Ireland’s total personal consumption expenditure.

Overview and Further Analysis of the Differences between Publications

The methodological differences across the three publications discussed in this note can be summarised as follows:

• The figures in the Tourism and Travel publication are the largest since these results include more types of expenditure than in the Balance of Payments or National Accounts standards. The Tourism and Travel figures do not differentiate between fares and all other kinds of tourism expenditure, nor does it differentiate between business and non-business-related expenditure. Fares paid by non-resident travellers to non-resident carriers or by resident travellers to resident carriers are the only amounts excluded from these results.
• The Balance of Payments methodology excludes all travel fares from the tourism and travel expenditure figure where possible, and recategorizes them as transport. The Balance of Payments methodology also adjusts for students, cross-border shoppers and imputed rent.
• The National Accounts methodology takes the Balance of Payments figures and removes estimated business expenditure, arriving at an estimate of personal consumption expenditure on tourism services.

Figure 5 below shows the net result for overseas tourism and travel expenditure as shown in the Tourism and Travel, Balance of Payments and National Accounts publications. While the general trend is similar across the period shown, the levels differ significantly. It should be noted that, as stated earlier, the treatment of international students in the Balance of Payments was revised in 2018 and 2019, resulting in increases to the tourism and travel export item in the Current Account, pushing up the Balance of Payments net figure shown below.

Figure 6 shows the number of trips to Ireland taken by non-residents, broken down into non-business related and business related. Also shown are the tourism and travel export figures given by each of the three publications discussed in this note. This graph demonstrates that the Tourism and Travel export figure correlates most strongly with the annual number of trips. The Balance of Payments figure strips away fares (and also makes a range of other adjustments) and this causes the level to consistently drop while maintaining a similar trend to the Tourism and Travel series. Recall that the National Accounts series excludes both fares and expenditure associated with business trips, and this accounts for its level being the lowest. Given that the number of overseas business trips was stable over the time-period shown, it is unsurprising that the size of the gap between the Balance of Payments series and the National Accounts series was relatively constant.

Figure 7 shows the number of trips taken by Irish residents abroad, broken down into non-business related and business related, along with the tourism and travel import figures given by each of the three publications discussed in this note. The total number of trips correlates quite closely with the tourism and travel expenditure figures published in each of the three publications. The Balance of Payments import figures are consistently higher than the Tourism and Travel figures. Recall that even though fares would ideally by excluded from the import figure, they are in fact largely included. The net effect of the rest of the Balance of Payments adjustments to the Tourism and Travel figures is additive, meaning the final figure is consistently higher. The National Accounts figure is consistently lower than the Balance of Payments figure, due to the subtraction of business expenditure.

Figure 8 shows the total number of overseas trips to Ireland broken down by the country of residence of the traveller, as well as the tourism and travel export figure from the three CSO publications discussed in this note. The graph shows that the number of visits from all countries has been relatively constant across the time-period shown despite the expenditure figures rising, apart from the number of visits from the US and Canada. The number of visits from the United States and Canada more than doubled over the time-period, when tourism and travel expenditure also rose. Assuming average expenditure per trip from each country remained relatively stable across time, this suggests that tourism and travel expenditure could be particularly responsive to visits from US and Canada. More simply, Figure 8 suggests that residents of US and Canada are likely to spend more money per trip to Ireland on average than visitors with other residencies.

Conclusion

The Tourism and Travel, Balance of Payments and National Accounts publications all treat overseas tourism expenditure data differently due to the nature of the statistical standards in which each is embedded. These methodological differences result in varying final figures for overseas tourism and travel expenditure both by Irish residents abroad and by non-residents in Ireland in the outputs.

The Tourism and Travel publication aims to show an aggregate figure with minimal adjustments. Contrastingly, the Balance of Payments publication makes the largest set of adjustments to the figures, including the removal of fares where possible. The National Accounts methodology again is necessarily different. The function of the relevant section of that publication is to show a breakdown of personal consumption expenditure, and so business-related tourism and travel expenses are excluded.

This Information note illustrates that the differences in methodologies across CSO publications are deliberate and necessary. The difference in the final figures reflects the fact that each CSO publication serves a distinct and specific statistical function. With clarity on the methodological differences behind each of the publications explained throughout this information note, users are enabled to choose figures and methodology that best meets their needs.

Annexe

The table below summarises the information contained in this note. This table also contains links to the relevant publications and Statbank tables where the figures discussed throughout this information note may be sourced.