Sunday, April 29, 2012

The Challenge of Benchmarking Tourism's Global Economic Value

In 2008, I posted on this blog: "Tourism is Not the World's Largest Industry" -- which actually came from my book: Understanding and Managing Tourism Impacts: An Integrated Approach (with C.Michael Hall, 2009, Routledge, UK).  That post has been one of the most visited on my blog.

I see today that the World Travel and Tourism Council (WTTC) has recently commissioned a study to, yet again, prove to policy makers that tourism is a really big deal (see their press release here: Travel and tourism larger industry than automotive manufacturing; and on more on the website here - they have a couple of ppt files on their site that details their findings, though as usual, the methodology is fuzzy, at best).

The problem is that the co-called "tourism industry" is so diverse that almost any activity remotely related to travel and hospitality can be considered all or part of it.  The WTTC tends to use the Tourism Satellite Accounting System to "guestimate" how much each sector of an economy contributes to tourism -- and this really is just a guess!  In addition, the Tourism Satellite Accounting System is inherently unsuitable for comparison across political boundaries (beyond a single country) and across different industries.  Each of those transgressions involves exponentially greater guesswork.  Also, comparing service industries to manufacturing is wrought with challenges and is not recommended by the WTO (World Trade Organization), which compiles most of the international trade data for the world.  (I know, I did make this last transgression myself in my original blog post on the topic, but at least I admit that it is a fundamental flaw in my analysis.) 

Anyway ... yes, I fully agree that tourism is a huge global economic activity that just continues to grow despite economic upheavals across the globe.  However, I caution everyone to be careful in accepting the illusion of hard number results from any study that tries to compare tourism economic activities with other industries at a global or even regional scale. 

(Cross-posted at

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