The measurement of international travel services:

1. The measurement of international travel services: Current methodology and alternatives (including the use of credit card information) Balance of International Payments Division November 9th, 2011

2. 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 Introduction Statistics Canada • Statistique Canada

3. 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 Statistics Canada • Statistique Canada

4. 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 requirements Statistics Canada • Statistique Canada

5. 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 counts Statistics Canada • Statistique Canada

6. 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 surveys Statistics Canada • Statistique Canada

7. 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 expenditures Statistics Canada • Statistique Canada

8. 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 fares Statistics Canada • Statistique Canada

9. 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: Improving current surveys Statistics Canada • Statistique Canada

10. 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: Airlines statistics Statistics Canada • Statistique Canada

11. 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: Airlines admin data Statistics Canada • Statistique Canada

12. 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: Household surveys ... And modelling Statistics Canada • Statistique Canada

13. 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: Credit card information Statistics Canada • Statistique Canada

14. 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) Statistics Canada • Statistique Canada

15. 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) Statistics Canada • Statistique Canada

16. 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 Gaps ... debit card information Statistics Canada • Statistique Canada

17. 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) Statistics Canada • Statistique Canada

18. 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, comments Statistics Canada • Statistique Canada