Applying a Tourism Satellite Account to Saint Lucia

https://medium.com/3blades-blog/how-to-avoid-a-bad-data-drive-decision-that-will-make-you-broke-75b9cf52cc60 (Please note that links to all reference articles can be accessed via embedded links)

The 2021/2022 estimates of revenue and expenditure showed a 25% decline in tax revenue; $1,071M in 2019/2020 to $802M in 2020/2021 primarily due to the impact of COVID-19 on our tourism industry. Long discussed as an economic measurement for Tourism, Tourism Satellite Account, would help us have more accurate information to make better data-driven decisions for the Saint Lucian tourism industry. This would help us better understand the impact of shocks such as COVID-19 or ill-conceived grandiose failing projects such as DSH resulting in a per-capita GDP for Saint Lucia in 2021 that is more than 7% lower than in 2016.

Tourism Satellite Account

The Tourism Satellite Account (TSA) is a standard statistical framework and the main tool for the economic measurement of tourism. It has been developed by the World Tourism Organization (UNWTO), the Organization for Economic Coopération and Development (OECD), the Statistical Office of the European Communities (Eurostat) and the United Nations Statistics Division. The Tourism Satellite Account: Recommended Methodological Framework 2008 (also known as the TSA: RMF 2008) provides the updated common conceptual framework for constructing a TSA. It adopts the basic system of concepts, classifications, definitions, tables and aggregates of the System of National Accounts 2008 (SNA 2008), the international standard for a systematic summary of national economic activity, from a functional perspective.

The TSA thus allows for the harmonization and reconciliation of tourism statistics from an economic (National Accounts) perspective. This enables the generation of tourism economic data (such as Tourism Direct GDP) that is comparable with other economic statistics. Exactly how the TSA does this relates to the SNA logic of contrasting data from the demand-side (the acquisition of goods and services by visitors while on a tourism trip) with data from the supply-side of the economy (the value of goods and services produced by industries in response to visitor expenditure).

The TSA can be seen as a set of 10 summary tables, each with their underlying data:

· inbound, domestic tourism and outbound tourism expenditure,

· internal tourism expenditure,

· production accounts of tourism industries,

· the Gross Value Added (GVA) and Gross Domestic Product (GDP) attributable to tourism,

· employment,

· investment,

· government consumption, and

· non-monetary indicators.

Tourism Industry Blunders

In 2019, Dominc Fedee, Minister of Tourism, stated the following: “The tourism satellite account will significantly improve how we capture the impact of tourism: taxes that are paid to government revenue, revenue passed in the hotel sector, average daily rates in the hotel sector, jobs in the tourism sector, linkages in the tourism sector, and the dollar value. When completed, it will allow us to make more informed policy decisions about tourism”.

Furthermore, this administration has indicated multiple times that Saint Lucia is in the process of establishing a tourism satellite account. The current administration is led by a hotelier who served as the managing director of Coco Palm. In addition, the leader, a former Minister of Tourism has served for multiple years as the OECS regional Public Relations Officer for Sandals Resorts and yet to date this key tourism indicator has not materialized to the public.

An accurate understanding of the true impact of the tourism industry should be a key priority in order to make data driven decisions. We currently have the largest capital project by the Saint Lucian government the HIA expansion and the Pearl of the Caribbean being undertaken with insufficient analysis completed.

It is instructive to read the grand promises about the DSH project as written in MillionaireAsia.Pearl of the Caribbean is arguably the largest project in the Caribbean. Its gross development value is already more than doubled to US$6.5 billion. It will take 15 years to be fully developed and will be rolled out in parcels of US$300 million to $400 million each. The early launch will have three phases with a total value of close to $1 billion.None of this will become a reality and this perhaps is no surprise as the PM himself admitted — this was negotiated hastily in only a few weeks.

The Prime Minister flew to Miami in May 2021 to discuss the “proposed” Vieux-Fort cruise-port which was promised 5 years ago. A cost benefit analysis would determine whether this cruise port would be in the economic interest of Saint Lucia particularly given the uncertainty of the cruise industry for the foreseeable future and its relatively small contribution to the Saint Lucian economy. The current administration appears to use only rudimentary tourism arrival numbers (Jan- Mar 2021 stay over arrivals are 83% worse than Jan- Mar 2019) to make critical decisions for the country even if they appear to know better. Why has the TSA development not released to the public after almost 5 years of this current administration?

Jamaica’s Tourism Satellite Account

In 2009, Jamaica announced the following regarding their tourism satellite account. “The TSA has demonstrated the fact that tourism is one of the leading sectors of the economy; and it has also been able to measure the contribution of tourism in terms of employment creation and the sustaining of employment. It has also been able to indicate the value in terms of foreign exchange earnings.” Details on Jamaica’s tourism satellite account figures can be found here.

Will Saint Lucia ever have similar data to allow for better decisions or will the current administration continue to make naïve mistakes due to lack of data? We await such data being available on the Saint Lucia Open Data Portal.

Please reach out to stlucia.analyser@gmail.com with any suggested topics for future articles or if you would like to help write or edit our blogposts. Like or Follow our Facebook Page or at Medium or Twitter or YouTube.

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Critical data-driven research analysis of challenges facing Saint Lucia.

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The St. Lucian Analyzer

The St. Lucian Analyzer

Critical data-driven research analysis of challenges facing Saint Lucia.

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