Monday 27 February 2017

A stupid Newshub beat-up [updated]

Newshub today helped make Kiwis just a little bit stupider. But Ministers not knowing the underlying stats didn't help. [See update below though!]

To recap. The government was put on the spot about whether they're rorting tourism numbers. MSD will sometimes put people in hotels or motels as temporary emergency accommodation. Whether that happens too often relative to an ideal is a different question we'll leave to the side for now. Question at hand is whether that's inflating the tourism numbers. 

Tourism Minister Paula Bennett was asked whether the tourism numbers were wrong because of this. 

The correct answer is "MSD clients are a tiny fraction of overall hotel nights, so it really cannot affect the figures either way." 

Minister Bennett clearly didn't know what's going on in the underlying stats because she said that they aren't included because they're not tourists. Hotels don't know why guests are spending the night. They just report up to Stats how many nights they've provided. [Update - see below] Other non-tourists included in the figures:
  • A couple getting a room for a discreet encounter, who aren't tourists;
  • Someone who realises he is in no shape to drive home and would rather spend the night in the hotel rather than go home drunk in a cab;
  • Someone taking a night at a hotel after a row at home;
  • Someone renting a room as a meeting space;
  • Someone staying in a hotel room during some renovations, or before taking possession of a place they've just bought.
None of it matters. Why? There are almost 22 million domestic guest-nights per year in New Zealand hotels, and over 15 million international guest-nights. How do we know this? The tourism satellite accounts. Here's Table 8.

Neither the international guest nights nor the growth in international guest nights is likely to have been affected at all by MSD clients; they wouldn't have been reported as domestic visitors. It is unlikely that MSD clients have any material effect on the overall domestic guest nights either - it would be like thinking the water volume of Lake Taupo is overstated because nobody netted out the mass of fish in the lake. Yeah, there's fish, but it won't make much difference to the overall figures.

How much effect could it have had? The Newshub story reports 8,860 emergency housing grants in the last quarter of last year at a cost of $7.7 million. Let's say that those are all hotel room nights. Since they're emergency nights, they're not going to be getting "book ahead and save" rates. And they're also potentially riskier for the motellier. Let's say that the room rate is $100 per night but I'd think I'm erring on the low side there. That's (top end) then about 77,000 nights in that quarter. If the room rate is $200/night, then it's 38,500 nights. 

If that had persisted for the whole year, the total number of guest nights would still have rounded to 22 million - but the measured growth rate would have been a bit lower. But, again, would it matter? The government crows about international tourist numbers and guest-nights. Domestic doesn't get noticed as much. 

Prime Minister English noted "if they're counting them as tourists, they shouldn't be." It maybe wouldn't be that hard for MSD to tell Stats how many nights they've purchased and then have those netted from the tourism satellite accounts, but it's stupid hassle for no particularly good reason. And unless they do it all the years back, they're going to break the continuous data definition. 

So, some bottom lines:
  • There is a housing crisis;
  • The government is not fudging the tourism stats by including MSD clients in the tourism satellite accounts, and neither is Stats NZ;
  • It is stupid, and damaging, and unethical, to undermine trust in official statistics in this kind of Gotcha! attack on Ministers who cannot reasonably be expected to know what's in the definition of particular stats - and especially where it is inconceivable that whether or not it is included it would make a whit of difference to the measured tourist night numbers. 
  • I hope that the Statistics Minister, on advice from Stats NZ, would also have told Newshub that the 22 million nights context means that this would just be rounding-error stuff anyway. If he did, and Newshub didn't report that part, that would be worse for them. 
  • If we ever get to the point where MSD emergency grants could materially affect the domestic accommodation guest-night figures, we're going to need a bigger word than crisis to describe what's going on in New Zealand's housing situation.
UPDATE: MBIE's tourism estimates, like the monthly regional tourism estimates, don't use the accommodation survey figures anyway. So if they did use them, it wouldn't matter because the numbers are tiny. But they don't. In this evening's reader mailbag (haven't seen a source link yet):

The Accommodation Survey is produced by Statistics New Zealand monthly to provide information on short-term commercial accommodation activity at a regional and national level. This includes all people staying in commercial accommodation, not only tourists.
Domestic tourism is currently measured by visitor spending, which is not informed by the Accommodation Survey.
MBIE does not use the Accommodation Survey to produce key tourism data products, such as:
  • Monthly Regional Tourism Estimates
  • International Visitor Survey
  • New Zealand Tourism Forecasts.
People with emergency housing grants are not included in these statistics.
However, while it does not inform these products and measures, the Accommodation Survey is part of a suite of statistics that we use to understand the tourism market, both domestic and international. People with emergency housing grants make up a tiny percentage of the approximately 38 million visitor nights recorded annually in the Accommodation Survey.

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