the measurement of international travel services: current methodology and alternatives (including...

The measurement of The measurement of international travel services:international travel services:

Current methodology and alternatives

(including the use of credit card information)

Balance of International Payments Division

November 9th, 2011

23-04-10Statistics Canada • Statistique Canada2

Total travel services relatively small, but volatile, portion of the current account

Significant impact on trade in services balance Travel series used in several System of National

Accounts components Current travel estimates combine traveller surveys and

traveller counts Alternative sources to validate or replace current sources

• Potential sources• Advantages and issues

IntroductionIntroduction


25 million foreign travellers to Canada in 2010• 82% from United States (mostly by automobile of which half on

same-day trip)• 45% of the spending from United States travellers

54 million Canadian travellers abroad in 2010• 84% to United States (mostly by automobile of which two-thirds

on same-day trip)• 60% of the spending made in United States

Increase in the travel deficit of Canada• Deficit rose from C$2.1 billion to C$14.3 billion between 2001

and 2010 ... Mostly on larger deficit with United States

Some figures on travel Some figures on travel


Balance of payments• Travel spending by purpose of the trip; details on medical, education,

and non-resident workers; passenger fares by mode of transport; quarterly series with geographical breakdown

Gross domestic product• Exports-imports of services; personal expenditures (spending by broad

category); provincial allocation

Canadian Tourism Satellite Account• Supply (industry side) and demand (tourist side); domestic and

international travellers; spending by broad category

Input-Output System• Household versus business spending; detailed spending by category ...

converted into about 150 commodities; provincial distribution

System of National Accounts requirementsSystem of National Accounts requirements


Volumes of Canadian and foreign travellers are estimated through administrative data (frontier counts)

Air travellers• Customs declaration card• Residency of the traveller• Length of stay• Some information about the destination (for Canadian travellers)• Large sample of the cards are processed for statistics

Land travellers• Counts of people crossing the borders• Split between same-day and overnight trips

Frontier countsFrontier counts


Questionnaires distributed at borders and in airports Five versions of the survey

• Canadians returning from abroad (long questionnaire)

• United States travellers (long questionnaire)

• Foreigners from countries other than U.S. (long questionnaire)

• Canadian returning from United States on same-day trip by automobile (short questionnaire)

• United States travellers returning from Canada on same-day trip by automobile (short questionnaire)

Key questions• Country of residence; purpose of trip; length of trip (covers commuters)

Air Exit Survey of Overseas Visitors• Interviews conducted directly in airports while passengers wait for flights

(target flights to specific destinations)

Traveller surveysTraveller surveys


Questions on spending• Broken down by 5 categories of spending• Share of spending paid by sector (personal-business split)• Countries visited

Characteristics of the respondents combined with characteristics of the “population” (frontier counts)• Representation of travellers by ports of exit• Travel spending published quarterly for 6 areas• Further details on annual basis

Travel expendituresTravel expenditures


Questions on fares• Fares paid• Name of the carrier• Type of fare• Origin / destination

Characteristics of the respondents combined with characteristics of the “population” (frontier counts)• Passenger fares estimated on a quarterly basis but integrated

under total transport services for publication purposes• Some details available annually

Transportation: Passenger faresTransportation: Passenger fares


Any of the alternatives discussed would need to retain frontier counts

Consolidation of the questionnaires from 5 to 2 versions• Will simplify the distribution• Reduce printing costs

Increase the distribution of questionnaires at certain ports of exit

Air exit survey for United States travellers Review imputation strategies Internet version of the questionnaires (distribute cards

with link)... As a means ↓ response burden and ↑ response rates

Alternatives: Alternatives: Improving current surveysImproving current surveys


Survey of air passenger origin and destination (quarterly)• Number of passengers, by airlines (all having activities in Canada), by

Canadian and foreign origin-destinations

• Data compiled for air scheduled and air charter services

• No breakdown between Canadian and foreign passenger

Not seen yet as an alternative to traveller questionnaires• No country of residence for the travellers

• Does not capture the full journey

Fare basis survey (quarterly)• Collects sample of ticket fares from major Canadian air carriers

• Average fares for different type of fare

• Domestic and international journeys

Could be used to validate questionnaire results• Although no information on foreign airline fares

Alternatives: Alternatives: Airlines statisticsAirlines statistics


Leverage any available airlines administrative data• Likely that high frequency airlines administrative data is available for

internal purposes ... Marketing and route planning purposes as demand evolves

Possible detail• Origin and destination of travellers

• Nationality

• Personal travel or business travel

• Domestic and international journeys

• Duration of trips

Likely only domestic carriers and affiliates

Alternatives: Alternatives: Airlines admin dataAirlines admin data


Adding questions on international travel through current Statistics Canada’s surveys• Survey of Household Spending• Possibly supplementary module on higher frequency surveys• Would only cover Canadian travel abroad• Lack of spending details• Good control total for non-business spending ... acceptable to

estimate average spending

Modelling data• Based on counts, exogenous variables and established patterns• Likely used in combination with other alternatives• Challenge: The need to generate sufficient detail for the national

accounts programs

Alternatives: Alternatives: Household surveys ... Household surveys ... And modellingAnd modelling


Partial aggregated monthly statistics available ... Data are timely ≤ 15 business days after the end of the reference period

Used as an indicator and data confrontation tool for Household final consumption expenditures (GDP)

Class of card holder (personal / commercial) ... With 6 classes of detail:• Personal credit card purchases made in Canada by Canadian residents

• Commercial credit card purchases made in Canada by Canadian residents

• Personal credit card purchases made in Canada by non-residents

• Commercial credit card purchases made in Canada by non-residents;

• Personal credit card purchases made outside Canada by Canadian residents;

• Commercial credit card purchases made outside of Canada by Canadian residents.

Alternatives: Alternatives: Credit card informationCredit card information


Transactions are grouped for about 40 different merchant classes such as: Accommodation, Airline, Car rental, Full-service restaurants, Other retail, Travel agencies, etc.

Challenges:• Not all credit suppliers included ... Key as market shares evolve• No formal agreement in place to secure data on an ongoing basis • Residency of the card holder limited• Location of the transaction (only in Canada or abroad)• Transaction detail not perfect: More industry than commodity ...

Possibly not standardized across all credit suppliers• Commercial-personal use determined by type of card• Difficult to estimate spending per trip (even with # of transactions

and/or # of trips per cardholder) • Difficulty comparing estimates to survey results

Credit card information (cont`d) Credit card information (cont`d)


Challenges (cont`d)• Purchases at Canadian or foreign business represent

transactions while travelling, by phone or by internet → more than travel spending

• Capital purchases (e.g., deposit on timeshares) may be included• Timing may be an issue, as transactions reflect the date of the

purchase ... Not necessarily the date of travel (e.g., air tickets)• No way to identify if the purchase was done from home or

abroad• Purchases from Canadian travel agencies shown as purchases

made in Canada, but part may be for travelling outside the country

• No information about exact country of purchase • No information about country of origin of foreign travellers• Credit cards do not cover all travel transactions

Credit card information (cont`d)Credit card information (cont`d)


Debit card transactions (withdrawals while travelling) likely account for a not insignificant share of travel spending

Further, debit cards maybe used differently than credit cards while travelling• credit cards for accommodation and other expenditures• debit card withdrawals for a percentage of meals, leisure

activities and shopping

Further, debit cards maybe used differently than credit cards while travelling

Implications for expenditure allocations by commodity

GapsGaps ... debit card information ... debit card information


Going forward implies a large amount of work and data development• Determine if additional country detail could be made available ...

Country of residency for the cardholder and merchant• Determine if we can obtain the Canadian region of the merchant

and cardholder• Establish a better understanding of credit suppliers merchant

classifications in relation to standard industry-commodity classifications

• Determine if there is a flag/indicator identifying (i) internet, (ii) telephone and (iii) merchant location

• Establish an approach to estimate average expenditure, per cardholder, per trip

• Extend efforts to include debit cards

Credit card information (cont`d)Credit card information (cont`d)


Statistics on international travel are important not only for balance of payments / trade purposes

Canada’s estimates are derived from a combination of travellers surveys and travellers counts

Alternative sources require be further studied to validate or replace current sources

More work on credit-debit cards, in particular

Questions ... Comments?

Conclusion ... Questions, commentsConclusion ... Questions, comments

the measurement of international travel services: current methodology and alternatives (including...

Documents

travel slide

foreign travellers

international travellers

statistics land travellers

fares fares

representation of travellers

ports of exit travel

day trip