5.3 Estimated expenditure on tourism by out gay Europeans
Two studies have been undertaken which provide different basis for estimating the value of expenditure on tourism by openly gay people. We have extrapolated from each of these separately and used a comparison of the results to test the validity of the findings.
Methodology for Study One
Study One â€“ Community Marketing
The San Francisco based Community Marketing is one of the worldâ€™s leading researchers in gay market trends. It has conducted 15 annual surveys of the tourism behaviour of gay American people, interviewing over 4,500 out gay people each year in the United States. Details of their research can be seen at www.communitymarketinginc.com. Community Marketing estimate that gay Americans spend $64 billion on tourism annually.
Taking the American figure as our base we can estimate the level of spending on tourism by out gay Europeans in each sector by comparing the relative size of the out gay population, average GDP per head and the size of the population.
We have also considered the relative propensity to travel. We assume that this will be similar to the USA in Western Europe and less in Central and Eastern Europe, although there is no evidence to support this. However, we do not believe that this is a significantly large issue and have not included it in our calculations.
Our formula will be :
Gay expenditure on tourism for a sector = (proportion of population of sector that is openly gay divided by proportion of population of the USA that is openly gay) multiplied by (GDP per head in sector divided by GDP per head in USA) multiplied by (population of sector divided by population of USA) multiplied by $64 billion.
Findings for study one
- Assumption 1 - proportion of the population that is openly gay is similar in the USA as in Western Europe (i.e. 5%)
- Assumption 2 â€“ GDP per head in USA is $ 47,000 (IMF 2010) and GDP as an average of the major 5 Western European Countries is $33,000 (IMF 2010)
- Assumption 3 â€“ Population of USA is 311 million. Population of Western Europe is 413 million.
- Estimated expenditure = (5/5) x (33/47) x (413/311) x $64 billion= $60 billion.
- Assumption 1 - proportion of the population that is openly gay in Central Europe is one fifth of the proportion in USA (i.e. 1%)
- Assumption 2 â€“ GDP per head in USA is $ 47,000 (IMF 2010) and GDP as an average of the major 5 Central European Countries is $17,000 (IMF 2010)
- Assumption 3 â€“ Population of USA is 311 million. Population of Central Europe is 128 million
- Estimated expenditure = (1/5) x (17/47) x (128/311) x $64 billion = $2 billion
- Assumption 1 - proportion of the population that is openly gay in Central Europe is one twentieth of the proportion in USA (i.e. 0.25%)
- Assumption 2 â€“ GDP per head in USA is $ 47,000 (IMF 2010) and GDP as an average of the major 3 Eastern European Countries is $13,000 (IMF 2010)
- Assumption 3 â€“ Population of USA is 311 million. Population of Eastern Europe is 303 million
- Estimated expenditure = (1/20) x (13/47) x (303/311) x $64 billion = $0.9 billion
Whole of Europe
- Estimated total expenditure by gay Europeans of tourism = $60 billion + $2 billion + $0.9 billion = $62.9 billion
Methodology for Study Two
Study Two â€“ Out Now Consulting
Out Now Consulting is a leading gay marketing company which has undertaken a major worldwide survey of gay trends, including a number of countries in Western and Central Europe. Over 40,000 out-gay people from 14 countries took part in the survey. You can see more about this research at www.outnowconsulting.com
Out Now estimated the gay tourism expenditure of the gay population in France ($11.5 billion), Germany ($11.4 billion), Italy ($8.5 billion), Netherlands ($2.5 billion), Spain ($6.4 billion) and the UK ($9.3 billion). This gives a total expenditure of $49.7 billion. The population of these countries is 334 million, therefore representing 81% of the population of Western Europe.
We can extrapolate, therefore that the total gay tourism expenditure in Western Europe is $61.3 billion.
Out Now estimated that the gay tourism expenditure for Poland is $3.7 billion
Polandâ€™s population is 38 million, representing 30 % of the population of Central Europe.
We can extrapolate therefore that the total gay tourism expenditure in Eastern Europe is $12 billion.
Out Now has no estimate for countries in Eastern Europe. However, taking the figure for Central Europe and adjusting to take account of the relative size of the out gay population, average GDP per head and the size of the population we can extrapolate an estimate for the size of the gay tourism expenditure.
- Assumption 1 - proportion of the population that is openly gay in Eastern Europe is one quarter of the proportion in Central Europe (i.e. 0.25%)
- Assumption 2 â€“ GDP per head as an average of the major 5 Central European Countries is $17,000 (IMF 2010) and GDP as an average of the major 3 Eastern European Countries is $13,000 (IMF 2010)
- Assumption 3 â€“ Population of Central Europe is 311 million. Population of Eastern Europe is 303 million
- Gay travel expenditure in Eastern Europe = $12 billion x (1/4) x (13/17) x (311/303) = $2.3 billion
Whole of Europe
Estimated total expenditure by gay Europeans on tourism = $61.3 billion + $12 billion + $2.3 billion = $75.6 billion.
Comparisons of extrapolations from Study 1 and Study 2.
In the main gay sector of Western Europe, the two studies produce very similar results.
In Central Europe there is a difference and since we use the results of study 2 in central Europe to extrapolate the results in Eastern Europe, this difference continues through.
The difference in results in central Europe when extrapolating the two studies can be explained by the difference in development of central European countries. It could be argued that Poland, as the largest and most modern of the Central European Countries with a GDP per head far higher than every other central European country (with the exception of Slovenia which has a population of just 2 million to Polandâ€™s 38 million) is not representative of the other, smaller countries. Therefore using the figure for gay tourism expenditure in Europe as an average for the whole of Central Europe will lead to an distortion. Allowing for this we could halve the Central European expenditure in Study 2 and consequently half that of Eastern Europe.
This would result in a total of $62.9 billion (Study 1) and $68.4 billion (Study 2). The proximity of these two figures gives some confidence that this is around the total expenditure by out gay people in Europe on tourism.
On current exchange rates (Oct 2012) we estimate that the total annual expenditure by gay European people on tourism is between 48-52 billion euros (Â£39-Â£42 billion or $63-$68 billion).
||$ 60 billion
||$ 61.3 billion
||+ $ 1.3 billion
||$ 2 billion
||$ 12 billion ($ 6 billion)
||+ $ 10 billion (+ $ 4 billion)
||$ 0.9 billion
||$ 2.3 billion ($ 1.1 billion)
||+ $ 1.4 billion (+ $ 0.2 billion)
||$ 62. 9 billion
||$ 75.3 billion ($68.4 billion)
||+ $12. 4 billion (+ $ 5.5 billion)