The Economic Impact of Tourism on the District of Thanet 2011

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1 The Economic Impact of Tourism on the District of Thanet 2011 Prepared by: Tourism South East Research Unit 40 Chamberlayne Road Eastleigh Hampshire SO50 5JH

2 CONTENTS 1. Summary of Results 1 2. Table of Results Table 1: Staying trips by accommodation type 4 Table 2: Staying nights by accommodation type 4 Table 3: Staying spend by accommodation type 4 Table 4: Tourism day trips & spend 5 Table 5: Sector breakdown of trip expenditure 5 Table 6: Breakdown of other trip related expenditure 5 Table 7: Businesses in receipt of visitor spend 5 Table 8: Total income for local businesses 6 Table 9: Local employment supported 6 Table 10: Total jobs in tourism-related sectors 6 3. Appendix: Summary methodology 7 4. Glossary of terms 8 SUMMARY RESULTS Thanet Total number of visitors 3,128,000 Total economic impact (including retail and induced and indirect effects) 230,373,000 Total number of actual jobs 5,477

3 Tourism Economic Impact Estimates This report contains the findings of a study commissioned by Visit Kent (under its SuSTRIP Interreg Two Seas Project) and Thanet District Council. Undertaken by Tourism South East the overall aim of the research is to provide indicative estimates for the volume, value and resultant economic impact of tourism on the destination. The research involved the application of the Cambridge Tourism Economic Impact Model or Cambridge Model ; a computer-based model developed by Geoff Broom Associates and the Regional Tourist Boards of England. 1. Summary of results 1.1 Volume and value of trips national and regional results Over the course of the year, 104 million overnight domestic trips were taken in England, 1.3% higher than in Trip value rose by 3.7%, reflecting both the increase in volume, as well as inflationary pressures, and at 17.9 billion is also at its highest level in nominal terms (i.e. not accounting for inflation) since the start of the current survey. The South East saw a drop in the volume of domestic overnight trips (down9% to just over 17 million overnight trips). Domestic trip expenditure was down 1% to 2.6 billion. Over the course of the year, 26.6 million overnight trips were taken in England by overseas visitors, a 5% increase on Trip value was up by 9%, reflecting the increase in volume of trips and there was a similar increase in the number of bed nights (up 5% on 2009 values). The volume of trips from foreign travellers to the South East was unchanged between 2009 and 2011 (just over 4.3 million overnight trips). Overseas visitor expenditure in the South East was up by 5% to reach 443 per person per trip. The regional pattern is reflected across all counties in the South East, although there are some differences at local, District level. 2. Summary of results for Thanet 2.1 Volume and value of trips It is estimated that around 524,000 overnight tourism trips were made to Thanet in Of these trips, domestic visitors made 83% of trips (433,000) and overseas visitors made 17% of trips (91,000). Compared to 2009, the volume of domestic overnight trips was unchanged, and the volume of inbound overnight trips increased by 3%. The home of a friend or relative was a popular type of accommodation used by overnight domestic visitors during their trip to Thanet (used by 40% of domestic staying visitors). Just over a quarter (27%) of foreign visitors staying overnight also stayed in the home of a friend or relative. Tourism South East Research Unit 1

4 Of all commercial accommodation available to visitors, serviced accommodation (hotels, guest houses and B&Bs) was the most popular choice among domestic visitors (used by 41% of domestic staying visitors). It is estimated that a third of all foreign visitors stayed in private lodgings as paying guests (30%). Just over a quarter of foreign visitors (29%) stayed in the serviced accommodation sector. Overall the number of nights spent in Thanet by domestic visitors decreased marginally from 1,212,000 nights in 2009 to 1,208,000 nights in Inbound trip nights spent in Thanet were up by 3% from 685,000 in 2009 to 705,000 in 2011 as a result of a shortening of average trip length. In total, it is estimated that around 97,455,000 was spent by all overnight visitors on their trip to Thanet in 2011, up by 4% compared to Expenditure was up for domestic visitors by 4% and inbound trip spend was up by 6%. It is estimated that around 2.6 million tourism day trips were made to Thanet in 2011, up 3% compared to In turn day trip expenditure increased by 5%, raising overall expenditure from 82,311,000 in 2009 to 86,204,000 in In total, around 183,658,000 was spent on trips to Thanet in 2011 by overnight and day visitors, up 4% compared to Thirty-five percent of this expenditure was made by domestic staying visitors; 18% by overseas staying visitors and 47% by day visitors. It is estimated that 17 of total trip expenditure went towards the cost of accommodation. Thirty-two per cent of total trip expenditure was spent in food and drink establishments and a further 22% was spent in the retail sector. Approximately 13% of total trip expenditure went on visits to attractions and other entertainment. Finally, the remaining 16% of total trip expenditure was spent in the transport sector. This includes petrol and parking charges. A significant proportion of travel expenditure on fuel occurs outside the destination either at the start of the trip or en-route. Adjustments are made to account for this in the total turnover figures. Further additional expenditure spent by visitors on second homes / boats and by friends and relatives, who visitors are staying with or visiting, needs also to be accounted for as this represents a significant additional source of income for local businesses. It is estimated that this additional expenditure generated a further 21,928,000 of direct turnover for local businesses in Of the 183,656,000 estimated to have been spent by visitors on their trip and the 20 million additional trip-related expenditure, around 193,947,000 directly benefited local businesses from hotels and restaurants to cafes, shops and attractions in Thanet. This is up 7% from Adjustments have been made to recognise that some spending on travel will take place outside the destination. It is assumed that 40% of travel spend will take place at the origin of the trip rather than at the destination. Also some expenditure on retail and food and drink will fall within the attractions sector and accommodation sector. Tourism South East Research Unit 2

5 In addition to the business turnover generated in those businesses directly receiving visitor income, successive rounds of expenditure, that is spending by these businesses on local supplies and spending by employers in the local area, is estimated to have generated a further 36,426,000 to the local economy. Drawing together direct business turnover, supplier and income induced expenditure, and the additional expenditure spent on second homes and by friends and relatives, the total value of tourism activity in Thanet in 2011 is estimated to have been around 230,373,000, up 6% compared to This income to the local economy is estimated to have supported around 3,876 Full-Time Equivalent Jobs and 5,477 Actual Jobs (with the addition of seasonal and part-time employment). This is an increase of 6% on These jobs are sustained in a wide number of service sectors including retail, catering, travel and hospitality and thus beyond recognised tourism businesses. Tourism South East Research Unit 3

6 2. Tables of Results for Thanet 2.1 Overnight trips by accommodation Table 1: Number of staying trips by accommodation stayed at UK % Overseas % Total % Serviced 178,000 41% 26,000 29% 204,000 39% Self catering 11,000 3% 3,000 3% 14,000 3% Caravan / tents 54,000 12% 3,000 3% 57,000 11% Group / campus 2,000 0% 1,000 1% 3,000 1% Second homes 6,000 1% 2,000 2% 8,000 2% Boat moorings 1 3,000 1% 0 0% 3,000 1% Other/mixed 2 7,000 2% 3,000 3% 10,000 2% Paying guests 0 0% 27,000 30% 27,000 5% SFR 172,000 40% 25,000 27% 197,000 38% Total ,000 83% 91,000 17% 524,000 Total ,000 83% 88,000 17% 521,000 % change 0% 3% 1% Table 2: Number of nights by accommodation stayed at UK % Overseas % Total % Serviced 463,000 38% 78,000 11% 541,000 28% Self catering 51,000 4% 24,000 3% 75,000 4% Caravans / tents 142,000 12% 14,000 2% 156,000 8% Group / campus 8,000 1% 7,000 1% 15,000 1% Second homes 31,000 3% 28,000 4% 59,000 3% Boat moorings 8,000 1% 0 0% 8,000 0% Other 8,000 1% 6,000 1% 14,000 1% Paying guests 0 0% 328,000 47% 328,000 17% SFR 497,000 41% 220,000 31% 717,000 37% Total ,208,000 63% 705,000 37% 1,913,000 Total ,212,000 64% 685,000 36% 1,897,000 % change 0% 3% 1% Table 3: Spend by accommodation stayed at UK % Overseas % Total % Serviced 36,722,000 57% 7,300,000 22% 44,022,000 45% Self catering 2,854,000 4% 1,025,000 3% 3,879,000 4% Caravans / tents 2,973,000 5% 526,000 2% 3,499,000 4% Group / campus 87,000 0% 267,000 1% 354,000 0% Second homes 756,000 1% 1,915,000 6% 2,671,000 3% Boat moorings 302,000 0% 0 0% 302,000 0% Other 112,000 0% 137,000 0% 249,000 0% Paying guests 0 0% 11,433,000 34% 11,433,000 12% SFR 20,240,000 32% 10,805,000 32% 31,045,000 32% Total ,047,000 66% 33,408,000 34% 97,455,000 Total ,809,000 66% 31,644,000 34% 93,453,000 % change 4% 6% 4% Note: SFR = staying with friends/relatives 1 Information on boat use is not available for overseas tourists. 2 Trips which involve staying in more than one type of accommodation over the duration of the trip. For overseas trips these also include nights spent in transit, in lorry cabs and other temporary accommodation. Tourism South East Research Unit 4

7 2.2 Tourism day trips Table 4: Tourism Day trips and spend Trips Spend Total ,604,000 86,204,000 Total ,525,000 82,311,000 % change 3% 5% 2.3 Sector breakdown of visitor expenditure Table 5: Sector breakdown of trip expenditure Domestic Overseas Day Total Accommodation 21,214,000 33% 9,635,000 29% 0 0% 30,849,000 17% Retail 8,806,000 14% 9,911,000 30% 22,014,000 26% 40,731,000 22% Catering 14,388,000 22% 6,269,000 19% 38,760,000 45% 59,417,000 32% Attractions 7,011,000 11% 4,867,000 15% 11,687,000 14% 23,565,000 13% Travel 12,628,000 20% 2,725,000 8% 13,743,000 16% 29,096,000 16% Total ,047,000 33,407,000 86,204, ,658,000 35% 18% 47% Total ,809,000 31,644,000 82,310, ,763,000 % change 4% 5% 5% 4% 2.4 Other trip related expenditure Table 6: Breakdown of other trip related expenditure Second homes 263,000 Boats 1,600,000 Friends and relatives 20,065,000 Total ,928, Business turnover derived from tourism and related expenditure Table 7: Businesses in receipt of visitor spend on trip Staying tourists Day visitors Total Accommodation 31,262,000 34% 775,000 1% 32,037,000 19% Retail 18,529,000 20% 21,794,000 27% 40,323,000 23% Catering 20,037,000 22% 37,597,000 47% 57,634,000 34% Attraction/entertainment 12,272,000 10% 12,295,000 10% 24,567,000 10% Transport 9,212,000 10% 8,246,000 10% 17,458,000 10% TOTAL 91,312,000 80,707, ,019,000 Other non trip related expenditure 21,928, ,928,000 Total direct ,240,000 80,707, ,947,000 Total direct ,484,000 77,141, ,625,000 % change 9% 5% 7% Note: Some day visitor spend will take place in accommodation businesses such as a meal in a hotel restaurant Tourism South East Research Unit 5

8 Table 8: Income for local business generated by trip expenditure Direct 193,947,000 Supplier and income induced 36,426,000 Total ,373,000 Total ,051,000 % change 6% 2.6 Employment supported by tourism and related expenditure Table 9: Local employment supported by the visitor economy FTE 3,876 Total ,477 Total ,180 % change 6% Table 10: Total jobs in tourism-related sectors Thanet (employee jobs) Thanet % of all jobs South East % of all jobs UK % of all jobs Total employee jobs 43, Full-time 29, % 69% 68.8% Part-time 13, % 31% 31.2% Employee jobs by industry Manufacturing 3, % 8.1% 10.2% Construction 3, % 4.5% 4.8% Services: of which 35,000 81% 85.7% 83.5% Distribution, hotels & restaurants 11,700 27% 24.6% 23.4% Transport & communications 1, % 5.9% 5.8% Finance, IT, other business activities 10, % 24% 22% Public admin, education & health 8, % 25.6% 27% Other services 2, % 5.6% 5.3% Tourism-related 4, % 8.2% 8.2% Tourism South East Research Unit 6

9 3. Methodology The Cambridge Model The Cambridge Model is essentially a computer-based spreadsheet model that produces estimates from existing national and local information (e.g. accommodation stocks, inbound trips) of the level of tourism activity within a given local area. The volume of visits is translated into economic terms by estimating the amount of spending by visitors based on their average spend per trip. In turn, the impact of that spending can be translated to estimate the effects in terms of business turnover and jobs. The standard measures generated in this Model are: the total amount spent by visitors, the amount of income for local residents and businesses created by this spending, and the number of jobs supported by visitor spending. As the Model utilises a standard methodology capable of application throughout the UK, it offers the potential for direct comparisons with similar destinations throughout the country. The basic process of estimation used can be divided into three parts: visitor trips and visitor spending at a regional/county level derived from national survey sources (county/city) local supply data on accommodation, attractions and other factors specific to the City. the use of multipliers derived from business surveys in England to estimate full time equivalent and actual jobs generated by visitor spending in the area. In its standard form, the Cambridge Model uses a range of local data including details of accommodation stock, local occupancy rates, population, employment, local wage rates and visits to attractions. It applies this locally sourced information to regional estimates of tourism volume and expenditure derived from the following national surveys: Great Britain Tourism Survey (GBTS) International Passenger Survey (IPS) Great Britain Day Visits Survey (GBDVS) Visits to Attractions Survey Annual Survey of Hours and Earnings (ASHE) Census of Employment Census of Population Labour Force Survey The sophistication of the economic impact estimates will depend on the availability of detailed reliable local information to supplement national and regional data sources. Where such data is available from local surveys, then local variations can be explicitly included. Tourism South East Research Unit 7

10 Glossary of terms Staying trips Staying trips comprise a visit which involves a stay away from home of at least one night. The study measures trips, rather than visitors as one visitor may make multiple trips to an area in a given period. Tourism day trips A day trip is classified as a "tourism day visit" if it involves participation in one of fifteen leisure activities (full details of the definition used are included in the annual survey report); save lasted at least three hours (including travel); it s not an activity which is undertaken "very regularly"; and is to a destination outside the respondent's place of residence (or place of work if this was the start point of the trip). The exceptions to this are trips to special public events, live sporting events and visitor attractions. VFR Trips VFR trips are defined as a visit where the main purpose is visiting friends and relatives. Whilst many trips to visit friends and relatives will be accommodated in the homes of these friends/ relatives, some will make use of other forms of accommodation. It should be also noted that other forms of trip, for instance for holiday or business purposes may stay with friends and relatives rather than in commercial accommodation. Other Expenditure Apart from the spending associated with the individual trips, additional spending by non-visitors, e.g. friends and relatives with whom the visitor is visiting and/or staying with will also take place. Moreover, owners of second homes/boats will spend some money on maintenance, repair. Economic multiplier Multipliers are used to estimate the economic impact of visitor expenditure. Visitor expenditure produces three effects. Direct effects are changes in the business sector directly receiving visitor expenditure. For instance, visitors staying in a hotel will directly increase revenue and the number of jobs in the hotel sector. Indirect effects are the changes in supplier businesses. For example, these indirect effects would be hotels purchasing more linen from local suppliers as a result of increased business. Induced effects are changes in local economic activity resulting from household spending. For instance, employees of the hotel and linen supplier spend their wages in the local area, resulting in more sales, income and jobs in the area. Full Time Equivalent Jobs (FTE) For the purposes of the Model, a FTE is defined by the average annual salary plus employment costs in the sector concerned. Direct jobs Jobs directly generated in those local businesses in which visitors spend money, i.e. hotels, catering establishments. Indirect jobs Jobs created locally due to the purchases of goods and services by businesses benefiting from visitor expenditure, i.e. jobs with local suppliers. Induced jobs Jobs created throughout the local economy because employees employed due to visitor expenditure spend their wages locally on goods and services such as food, clothing and housing. Tourism South East Research Unit 8

11 Actual Jobs Many jobs are seasonal or part-time in their nature in the tourism sector, so an adjustment is made to calculate the actual number of jobs from the number of FTEs. The adjustment made is based on the findings of surveys of tourism related businesses, and national employment surveys. Great Britain Tourism Survey (BGTS) The Great Britain Tourism Survey is undertaken by TNS. The key characteristics of the survey include a 100,000 face-to-face interviews per annum, conducted in-home, and a weekly sample size of around 2,000 adults aged 16 years or over - representative of the GB population in relation to various demographic characteristics including gender, age group, socio-economic group, and geographical location. Respondents are asked about any overnight trips taken in the last four weeks. It provides basic headline data on the volume and value of domestic tourism at a national, regional and county level. International Passenger Survey (IPS) The International Passenger Survey is conducted by Office for National Statistics and is based on face-to-face interviews with a sample of passengers travelling via the principal airports, sea routes and the Channel Tunnel, together with visitors crossing the land border into Northern Ireland. Around 210,000 interviews are undertaken each year. IPS provides headline figures, based on the county or unitary authority, for the volume and value of overseas trips to the UK. Great Britain Day Visits Survey (GBDVS) The 2011 Great Britain Day Visits Survey aims to measure the volume, value and profile of Tourism Day Visits taken by GB residents to destinations in England, Scotland, Wales and Northern Ireland. Fieldwork is undertaken on a weekly basis, using an online methodology, and an annual sample of over 38,000 interviews with GB adults. United Kingdom Occupancy Survey (UKOS) As part of the EU Directive on Tourism Statistics adopted in 1995, the UK must report regularly on a specified range of statistics to Eurostat, the official statistical office of the European Union. Included in these statistics are monthly occupancy rates for UK serviced accommodation. The responsibility for providing this data lies with the four National Tourist Boards, and across England the survey is undertaken by The Research Solution on behalf of Visit England. A sample of establishments are recruited to the online survey and asked to complete a data form each month, giving details of their nightly occupancy. The data submitted is analysed to produce monthly occupancy rates for the whole of the area and for specific categories of type, size, location etc. Annual Survey of Hours and Earnings (ASHE) The Annual Survey of Hours and Earnings (ASHE) provides information about the levels, distribution and makeup of earnings and hours worked for employees in all industries and occupations. ASHE is based on a one per cent sample of employee jobs taken from HM Revenue & Customs (HMRC) PAYE records. The ASHE tables contain UK data on earnings for employees by sex and full-time/part-time workers. The earnings information presented relates to gross pay before tax, National Insurance or other deductions. Labour Force Survey (LFS) The LFS is a household panel survey designed to provide information on the UK labour market, with results produced each quarter. It has a sample of approximately 60,000 households. The LFS is the government s largest continuous household survey and participation in the survey is voluntary. LFS data is weighted to enable the population estimates to be produced. The weighting also attempts to compensate for differential nonresponse among different subgroups in the population. Tourism South East Research Unit 9

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