Tourism industries and tourism foreign direct investment in Wales

Introduction Wales has some of the best landscapes in Europe, including three national parks which host activities that include hill walking, canoeing, mountain biking, kayaking and climbing. Wales is also becoming more and more popular for 'extreme' sports, including surfing, hang gliding and downhill cycling. In addition, cultural, historical and industrial heritage sites in Wales attract significant numbers of tourists. (BBC, 2010; Bolter 2013; Welsh Government 2016).

Thi s v e r sio n is b ei n g m a d e a v ail a bl e in a c c o r d a n c e wit h p u blis h e r p olici e s. S e e h t t p://o r c a . cf. a c. u k/ p olici e s. h t ml fo r u s a g e p olici e s. Co py ri g h t a n d m o r al ri g h t s fo r p u blic a tio n s m a d e a v ail a bl e in ORCA a r e r e t ai n e d by t h e c o py ri g h t h ol d e r s . Tourism occurs in all parts of Wales, and this geographical spreadof economic activity and employment generated by tourism is one of its key benefits.
Tourism in economically marginal areas of Wales may be related to an improvement in the services industry base. For example, where the resident economic demand is weak, the extra demand created by tourism may enable the provision of services such as retail, hospitality and other commercial services, at a higher level (Jones and Munday, 2001). Tourism supply chains also bring critical benefits to many small, indigenous businesses in Wales (not least agriculture). Table 1 shows selected tourism-related products and activities which are separately identified within the Wales TSA. For illustrative purposes, Table 1 focuses on two of the largest activities, in terms of absolute direct GVA supported and tourism ratios.
The second, third and fourth columns of Table 1 show total Welsh GVA for these two activities, and how this separates into GVA generated by regional (domestic) businesses, and that generated by nonregionally based companies (see next section for further discussion). The middle column of Table 1 provides the 'tourism ratio' for each activity, which shows the extent to which tourism contributes to total Welsh GVA in different tourismrelated activities. This ratio ranges from over 70% in accommodation services, and just under 30% in food and beverage serving activities.
Although not shown in Table 1 this ratio falls to less than 2% in exhibitions and conferences and other consumption products..

Tourism foreign direct investment in Wales
Uniquely the recent improvements in the Welsh TSA provide for a separation of the tourism 'supply side' into domestic and foreignowned firms. In the Welsh regional context, 'foreign' direct investment (FDI) is defined here as all nonregional ownership, hence including all branches of restof-UK firms as well as overseas direct investment. This separation is useful because (1) Wales has a strong reliance on nonregional capital in general, While foreign capital confers advantages on a regional economy (connected to its relatively high productivity), it can also be associated with problems resulting from the increasing dependency on external capital. In the Welsh case dependence has also resulted in greater exposure to global events (e.g. the ongoing issues with Tata Steel in Port Talbot, and see Roberts, 1996;Gripaios and Munday 2000;Munday, 2000;BBC, 2016;Bowler, 2016;Jones, 2017 (Brohman, 1996 (Boz, 2011). The relatively high levels of nonregional ownership in the accommodation sector in Wales may result in a similar leakage problem (Jones et al. 2003).
According to the Welsh TSA for 2013, non-regionally owned tourism businesses supplied just over half of all tourism characterised services and products. However, non-regionally owned tourism businesses are much more efficient in terms of GVA per FTE (Table  2). Foreign-owned tourism businesses have an overall productivity level which is 2.6 times higher than the regionally owned businesses 1 .
Sectoral representation and scale differences explain some productivity gaps between the regional the non-regional tourism businesses in Wales. Generally the foreign-owned sector is focused in certain areas, but multinationals have advantages that allow them to overcome competition from domestic firms. These 'ownership' advantages in foreign owned tourism industries include: economies of scale; brand name and reputation; greater finance availability; better knowledge and access to international tourism markets; better trained personnel, management and reservation systems; better organizational and IT capability to integrate valueadding activities (Dwyer et al. 2010).
The productivity differences in hotels and restaurants in Wales are expected to be due to such ownership advantages. Non-Welsh owned accommodation is characterized by large chain hotels, Welsh-owned by smaller hotels and B&Bs (although there are some exceptions).
Again, productivity differences in the Transport equipment rental industries link to the nature of equipment for rent; internationally-owned car leasing, included in this category, is likely much more productive (per employee) than regionally-owned rental of surfboards or boats. A similar 'production form' argument can be made for road transport, where local ownership includes many taxicabs with low passengerto-worker ratios, whereas long distance buses, tourist coaches and scheduled coaches that connect Wales with England and Scotland are operated by nonregionally owned operators with much higher passengerdriver ratios, thus leading to higher productivity.
Another recent innovation in the Wales TSA relates to the inclusion of information which shows characteristics of employment in tourism industries. Data for 2013 All products GVA Percentage GVA/FTE (£/FTE) Regional (%) Non regional (%) Regional  Finally, information gathered as part of an experimental purchasing account within the TSA shows that, at least for a small indicative sample, the foreign-owned tourism businesses have a much higher tendency to import their materials and services, with 48% of purchases made outside of Wales, compared to domestic tourism businesses who sourced 21% of their purchases outside of Wales.

Conclusions
The Wales TSA reveals important characteristics of tourism industries, well beyond expenditure and employmentalthough tourism's continuing role as an important driver of employment should not be ignored. It shows that the characteristics of regional and non-regional business is very different, with non-Welsh businesses higher paying and more productive, but with this driven in large part by the size of establishments, and 'selective' investment in higher value sub-sectors from outside the region. The work summarized in this paper, progressed in collaboration with the United Nations World Tourism Organization, is potentially replicable across all countries and regions which have TSAs, including many developing economies where the interactions between tourism, FDI, and growth are not well understood but of great importance. Endnote 1. In some sectors, such as Water passenger transport, transport equipment rental services, and Exhibitions and conferences industries, the productivity differences between two ownerships are much larger but the 'Welsh-owned' supply base can be almost non-existent, leading to measurement difficulties.