Frequently Asked Questions The Economic Contribution of Business Events in Canada in 2012 (CEIS 3.0) Q1. What were the objectives of the CEIS 3.0 study of the economic contribution of business meeting events in Canada in 2012? A. The 2012 Canadian Economic Impact Study (3.0) reports on Meeting Activity and its Economic Contributions of meetings, specifically business events, held in Canada for the study reference year 2012. Building on the original CEIS 1.0 prototype study conducted for the base year 2006 and other subsequent studies conducted in the United States, Mexico and United Kingdom, using the same research approach developed by the United Nations World Tourism Organization, this study included the additional capacity to produce economic assessment of meetings at the regional, provincial and metropolitan levels. It also included supplementary survey coverage of international delegates from seven key international markets in order to compare the spending and economic contributions of international attendees with domestic business meeting attendees. Q2. What is the methodological approach used in CEIS 3.0 to compile, analyze and report on business meetings activity and its economic contributions in Canada for 2012? A. As in the 2006 first prototype study, the CEIS 3.0 results were obtained through a combination of an ambitious primary data collection plan and economic analysis: using the first-of-its kind prototype survey research specifically tailored to capture meetings activity data from both the demand-side constituencies (delegates, exhibitors, and speakers) and the industry supply-side (meeting organizers, venue managers, and destination marketing organizations), and economic modeling that framed the results in a customized Meetings Accounting Framework. The accounting framework is based on, and conceptually linked with how tourism data are officially reported -- the Tourism Satellite Account. The economic contribution analysis reveals the direct contribution as well as the indirect and induced impacts of business meetings on the Canadian Economy. Q3. How does the methodology used 2012 compare with the previous 2006 CEIS 1.0 study? A. The data collection design, measurement and analysis approaches used in the 2012 study are largely the same as those employed in the original 2006 CEIS 1.0, first prototype study. Both studies are based on the implementation of the overall measurement accounting framework and approach outlined by the UNWTO preliminary report of 2006, Measuring the Economic Importance of the Meetings Industry: Developing a Tourism Satellite Account Extension (November 2006). However, subsequent to the original CEIS 1.0 prototype study, the UNWTO framework was later refined to limit the key measurement concept of meetings exclusively to business and professional events by explicitly excluding from the definition all personal, social, formal educational, purely recreational, political, and consumer/customer sales activities as outlined in the UNWTO Global Meeting Initiative, Volume 1: Basic Concepts and Definitions (September2008). Another change, introduced by UNWTO in 2008 was an expansion of the scope of meetings industry players to include Destination Marketing Organizations. 1
As a result, the major methodological design differences in the measurement approaches of the 2006 and 2012 studies is the exclusion of Consumer Shows and Consumer Exhibitions and the inclusion of Destination Marketing Organizations within the study measurement, analysis and reporting framework. An appropriate metaphor would be to think of the two studies as two, largely similar, statistical snapshots of Meetings Activity and its Economic Contributions, using the same camera but slightly different lenses, providing different fields of vision. As a consequence, while the results from the two studies are still broadly comparable; they present two somewhat different views of meetings activity in Canada and its contributions to the Canadian economy. In examining apparent differences between the results of the two studies, caution and care must be exercised in their interpretation. Apparent differences in the observed results can arise from changes in the combination of meetings demand and/ or supply as well as changes in the measurement definitions and methodologies employed. Furthermore, within the framework of the overall research design, it is not possible to fully isolate and separate the individual effects of each potential source of change. Q4. Did the other CEIS 2.0 update studies for 2007 and 2008 use the same approach as the initial CEIS 1.0 study, or are they directly comparable with this one for 2012? A. The previous update report, conducted for the calendar year 2007 and 2008, used the same conceptual measurement framework as the 2006 study, but a slightly different methodological approach by utilizing the linkages between economic data, official tourism statistics and the benchmark CEIS (2006) results (both the Accounting Framework and the economic modeling established in that Study) to produce updated estimates extending across three years (2006-2008) without the necessity of undertaking new survey research. Since there were no conceptual changes in the measurement framework across the three years, the year-over-year changes could be compared directly without qualification. However, because of the changes in the conceptual construct of in-scope meetings activity introduced in 2012, the CEIS 2.0 results are not directly comparable with the results of the CEIS 3.0 study of 2012. Q5. What activities are included and excluded within the operational concept of Meetings used in this study? A. For the purposes of this second update study, based on the measurement refinements introduced by the UNWTO in 2008, the term meeting refers to a gathering of l0 or more participants for a minimum of 4 hours in a contracted venue. Meetings include conventions, conferences, congresses, trade shows and exhibitions, incentive events, corporate business meetings, and other meetings that meet the previously specified criteria. Meetings exclude social activities (wedding receptions, holiday parties, etc.), permanently established formal educational activities (primary, secondary, or university level education), purely recreational activities (such as concerts and entertainment shows and sports events), political campaign rallies, or gatherings of consumers or would-be consumers by a company for the purpose of presenting specific goods or services for sale (consumer shows and consumer exhibitions), which would fall instead under the scope of retail or wholesale trade. 2
Q6. How do the 2012 results for levels of Meeting Activity, Participants and Spending compare with the results of the previous CEIS project assessments for 2006, 2007 and 2008? A. The overall picture of the levels Meetings Activity and related Spending levels in Canada that emerges in comparing the results from the three studies across the seven year period 2006-2012 is one of continuing change, both in terms of the direction and size of changes in study-over-study results. Moreover, the trends in the observed levels of Meetings Activity, Participants and associated expenditures all moved in a consistently negative direction in 2012: with negative growth observed for Meeting Activity levels and Participants, and total Direct Spending. In 2012, after implementing the definitional changes introduced by UNWTO in 2008, the number of ``in-scope business meetings occurring in Canada decreased by nearly 13% with the largest decrease found in Other Meetings (-44%), and two major exceptions to the trend expansion growth being seen in Incentive Meeting Events (69.7%) and Trade Shows and Business Exhibitions (39.5%). The levels observed for Meeting Participants also declined even more sharply by almost half (-47.7%) with decreases found for all visitor origin groups including the largest decrease observed in Non-local Domestic participants (-52.7%) followed by similar declines for Local (-48.6%) and International (-35.7%) participants. Overall in 2012, meeting expenditures decreased by nearly 10%, consistent with the negative growth trends of overall Meeting Activity levels and Participants. The picture for 2012 contrasts sharply with the earlier picture that emerged from the directly comparable studies between 2006 and 2008, which was one of small incremental changes involving initial growth, followed by equally small contractions, resulting in a relatively static multi-year growth trend in both activity levels and expenditure. Once again, the picture for 2006-2008 included a few specific exceptions to the overall picture of stability including: a small observed decline in the number of delegates travelling the greatest distances; a decline too in the incidence of Consumer shows in 2007; while Incentive meetings showed a decline in both the number of meetings and spending in 2008. Meetings Activities Comparisons with Previous Studies Results 2006 Prototype 2007 2008 2012 % Growth 2006-2012 All Meetings 670,900 696,800 671,900 585,400-12.7 By Type Conference/Conventions/ Congresses 126,200 127,800 124,400 116,200-8.0 Consumer shows 6,600 6,400 6,400 NA NA Trade shows/business Exhibitions 11,000 11,200 11,000 15,300 39.5 Incentive events 11,700 12,300 11,500 19,900 69.7 Corporate/Business meetings 391,500 410,500 395,600 364,800-6.8 Other Meetings 123,300 128,600 123,000 69,200-44.1 Total Participants 70,255,500 71,732,800 69,749,600 35,347,200-47.7 By Origin Local 40,360,900 41,625,100 40,696,400 20,739,000-48.6 Non-local domestic 27,456,110 27,814,900 26,874,300 12,986,000-52.7 International 2,438,500 2,292,800 2,178,900 1,568,100-35.7 Direct Spending (billions) $32.2 $32.5 $32.1 $29.0-9.7 3
Q7. What is the explanation for the drastic drop in numbers of meetings reported in the 2012 results? A. The initial Executive Summary and Highlights reports of the 2012 Canadian CEIS study reports a total of 585,000 business meeting events taking place in Canada compared with a total of 671,000 in 2006, a 13% drop of almost 86,000 reported meetings. One reason for the drop in the number of reported meetings observed in 2012 is the aforementioned change in the scope of meetings included in the operational definition in the study population and economic measurement framework of the current study. The current study excludes consumer shows and exhibitions. As noted earlier, this change in the scope of meetings included in the study was made to bring the 2012 Canadian study into alignment with the revised 2008 UNWTO guidelines (finalized after the 2006 Canadian study) as well as the subsequent U.S. (2009, 2012) and Mexican (2010) Economic Impact Studies, as specified in the MPIFC terms of reference for the current study. The previous CEIS 1.0 study reported about 6,500 consumer show and consumer exhibition meetings accounting for 1.7% of all meeting events included in the 2006 study. By comparison, the current study, collected information on 9,686 out-of-scope unreported consumer shows and consumer exhibition meetings, representing approximately the same share (2%) of the estimated total of 595,125 in-scope and out-of scope meetings observed in Canada in 2012. For the aforementioned reasons, the final base population of 585,000 meetings reported in the current study excludes all consumer show and exhibition events; thereby representing a loss of approximately 2% of the total meetings population reported in 2006. A second reason for the decline in the overall number of meetings observed in 2012 is the observed decline of the number of Other (unspecified) meetings from 123,832 reported in 2006 to 69,368 reported in 2012, is a loss of approximately 54,500 meetings, or a further 44% of the total for that meeting type reported in 2006. It is believed that a large share of this difference is a result of an upward bias in the previous findings due to over-reporting of social, education, recreation and entertainment non-business related meeting events in the previous 2006 study. The higher specificity in the wording of the meeting exclusion criteria statements regarding education, recreation and entertainment or personal, social and political events used in the surveys of the current study led to a tightening in the scope of the meeting exclusions that also extends to the reduced numbers observed in 2012 for both Other business meetings and Conferences, Conventions and Congresses. Accordingly, the current study results include an observed decline in the number of Other Business meetings from 391,464 reported in 2006 to 364,626 reported in 2012. This represents a loss of approximately 27,000 meetings, or 4% of the total number of meetings reported in 2006. Similarly, the current study results showing a decline in the overall number of meetings also include a the drop in the number of Conferences, Conventions and Congresses observed from 126,240 in 2006 to 116,063 in 2012, a loss of approximately 10,000 meetings, or a further 1.5% of the total number of reported in 2006. At the same time, these reported declines in the numbers and shares of specific meeting types between 2006 and 2012 were partially offset by increases in the numbers of Trade Shows and Business Expositions (+3,237, or +40%) and Incentive events (+ 8,160, or +69%) observed in 2012 compared with 2006. Q8. Overall spending doesn t seem to be so different in the 2012 results, why is that? A. Overall spending on business meeting events observed in 2012 only declined by about 10%, from the amounts reported previously in 2006. This is because declines in the overall number of meeting events (-11.3%) and the number of meeting delegates (-54%) were partially offset by observed increases in attendee spending (8.2%) between 2006 and 2012. It is also important to remember that the observed spending figures are reported in current 4
dollars for both 2006 and 2012. Even without any other changes, aggregate spending would likely increase by between 15-20 per cent as a result of increased prices due to inflation alone. It should also be noted that the scope of meetings industry players covered in the study expanded to include DMO s and their associated expenditure in the 2012 study. This avenue of spending was not considered in 2006. The new 2012 CEIS 3.0 overall direct spending figures of $49,618 per meeting and $823 per participant are now closer in line with similar comparative 2012 benchmark estimates from the United States of $152,956 USD per meeting and $1,246 USD direct spending per participant; and other similar estimates from the 2011 United Kingdom study of 45,867 per meeting and 514 per participant. Again these estimates are not directly comparable as average meeting sizes and composition of meeting attendees are likely to be different. However, the placement of $49,706 per meeting for Canada next to these figures seems more appropriate (compared with the previous estimates). It should be noted that the UKEIS study includes Consumer shows within its measurement framework; whereas these events are excluded in the U.S. and Mexican studies, as well as the 2012 CEIS 3.0 Canadian study. Q9. How do the 2012 direct spending results for Meetings Activity in Canada compare with other comparable official Canadian tourism spending figures? A. Supplementary comparative assessment of other secondary official data from the National Tourism Indicators annual measurements of Conference, Convention and Congress Registration Fees covering the seven year period between the 2006 and 2012 benchmark studies provides another independent, albeit limited, measurement benchmark, as well as further insights into the evolution of meetings activity over the period between the two studies: 1. In current dollar terms, the overall supply of conference, convention and congress registration fees (consumed by the combination of tourism and non-tourism demand) grew by 9.3% between 2006 and 2012; whereas in constant dollar terms, adjusting for the effects of inflation, only 2.9% growth in the overall supply of conference, convention and congress registration was observed for the same reference period. 2. Similarly, the overall tourism demand for conference, convention and congress registration fees grew by 10.2% between 2006 and 2012; whereas in constant dollar terms, adjusting for the effects of inflation, the observed growth was only 3.1% during the same period. 3. Furthermore, in current dollar terms tourism demand from international visitors for registration fees actually declined by 7.7% during the same period; while in constant dollar terms, tourism demand for conference registration fees from international visitors has declined by 20% during the 2006-2012 reference period. 4. On the other hand, as noted earlier, 2012 CEIS 3.0 results describe a nearly 10% study-over-study reduction in the level of total meetings related direct expenditures (including registration fees) a finding that is inconsistent with the observed overall positive growth trends found in official National Tourism Indicator data for aggregate supply and demand of overall conference, convention and congress registration fees (expressed in current dollars). 5
Q10. What about the 2012 Economic Contribution results, how do they compare with the results of the previous CEIS studies? A. The resultant effects on the economic contribution followed the aforementioned studyover-study pattern of changes seen in Meeting Activity and Participants levels, with Total GDP, employment, taxes, total wages and Total Industry Output contributions declining between 2006 and 2012 for most industries supported by Meetings Activity. In 2012, the decreases in the observed levels Meetings Activity led to sharp and equivalent losses in observed contribution levels to total Gross Domestic Product (-18.4%), total employment (-41.4%), total wages (-15.2%), total tax contributions (-41.2%) and total economic activity, as measured by industry output (-22.6%). Economic Indicators Comparison with Previous Economic Contributions Results 2006 Prototype 2007 2008 2012 % Growth 2006-2012 Direct Spending (billions) $32.2 $32.5 $32.1 $29.0-9.6 Direct Contribution to GDP (billions) $11.3 $11.5 $11.3 $12.5 10.6 Total Contribution to GDP (billions) $33.7 $34.3 $33.8 $27.5-18.4 Direct Employment (thousands of full-year jobs) Total Employment (thousands of full-year jobs) 235.5 231.7 222.9 201.3-14.5 583.5 574.1 552.3 341.7-41.4 Direct Wages (billions) $7.3 $7.5 $7.4 $9.2 26.0 Total Wages (billions) $20.4 $20.8 $20.5 $17.3-15.2 Direct Taxes (billions) $5.7 $5.7 $5.5 $5.1-10.1 Total Taxes (billions) $14.6 $14.7 $14.2 $8.5-41.2 Industry Output (billions) $71.1 $72.1 $71.1 $55.0-22.6 Q 11. The total economic contribution to GDP of meetings in Canada was previously calculated at $33.7 billion in 2006, $34.2 billion in 2007, and $33.8 billion in 2008; why is it now only $27.5 billion? A. As noted previously, the observed study-over-study declines in the economic contribution of Meetings Activity in terms of GDP followed the study-over-study contraction pattern seen in Meeting Activity, Participant, and Direct Spending levels due primarily to the changes in the precision of meeting category definitions and the range of meeting activities included within the scope of measurement with the application of the revised 2008 UNWTO meetings measurement guidelines particularly the exclusion of Consumer Shows and Consumer Exhibitions from the reported results in 2012. An aforementioned notable exception to the observed contraction trend is the observed expansion growth purely as it related to overall spending of attendees. Here, despite the reduced scope of meeting types, spending increased (8.2%). This was, in large part, due to price inflation in the range of 10%-15% and offsetting growth in the levels of several exceptional meeting activities, specifically Incentive Events and Trade Shows. While the direct GDP contribution associated with business meetings were higher in 2012 (10.6%), reductions were observed in the indirect and induced impact phases. Indirect effects capture the spin-off benefits to other sectors associated with Meetings activity dollars entering the economy. In this case, sharp reductions were observed as diminished supply chain effects are present, particularly with the removal of Consumer Shows and Consumer Exhibitions from the analysis and reporting framework. Meanwhile, 6
induced round effects, which are caused by the re-spending of wages supported either directly or indirectly from Meetings Activity, were also reported to be lower in 2012 than in 2006. Specifically reductions in induced level of employment and wages and salaries mirror the sharp declines observed for indirect effects and contribute to the lower estimates for aggregate direct, indirect and induced impacts. The bottom-line of the Canadian meetings economy is clearly affected by the scope of activities and participants included within the measurement framework as well as the larger national economic context. Q12. Do International business meeting attendees contribute more to the economy than domestic attendees or international leisure travel visitors? A. In order to compare the spending and economic contributions of international business meeting attendees with domestic business meeting attendees or international leisure travellers, the CEIS 3.0 research design also included supplementary survey coverage of international delegates from seven key international markets United States, United Kingdom, France, Germany, China, Australia, and Brazil. We need to carry out more analysis of the collected data and compare it with other tourism information in order assess this comparison and understand if the supply-chain works differently for attendees from these priority international markets. Q13. How do these results compare other international studies results? A. As noted earlier, these results are broadly comparable with the results from other recent studies in the United States, Mexico and the United Kingdom, since all have used variations of the same measurement framework and approached designed by the United Nations World Tourism Organization for measuring the economic importance of the meeting industry. Within this context, the new 2012 spending figures of $49,618 per meeting are now closer in line with those similar benchmark estimates from the United States of $152,956 USD per meeting and $1,246 USD direct spending per participant in 2012); from Mexico of $91,745 USD per meeting and $785 USD per participant, and from the UK of 45,867 per meeting and 514 per participant. Nonetheless, once again, these estimates cannot be considered directly comparable as average meeting sizes and the composition of international or local attendees could be different along with other factors. Moreover, the UKEIS study includes Consumer shows within its measurement framework; whereas these events are excluded in the U.S. and Mexican studies, as well as the 2012 CEIS 3.0 Canadian study. However, the placement of $49,618 per meeting and $823 per meeting participant found in the Canadian study for 2012 compares quite favourably next to those other national figures. COUNTRY / YEAR Total Contribution to GDP (including indirect & induced) United States 2012 Mexico 2010 United Kingdom 2011* Canada 2012 $393.8 B (USD) $25.1 B (USD) 58.4 B $27.5 B (CAD) Total Direct Spending $280.4 B (USD) $18.1 B (USD) 59.7 B $29.0 B (CAD) Number of meetings 1,833,200 197,400 1,301,600 585,400 Number of participants (millions) 224,947,000 23,060,000 116,100,000 35,347,200 Direct spending per meeting $152,956 (USD) $91,745 (USD) 45,867 $49,618 (CAD) Direct spending per participant $1,246 (USD) $785 (USD) 514 $823 (CAD) *The 2011 UKEIS includes consumer shows and consumer exhibitions within its measurement framework. 7