Forecasting tourism demand: A review of empirical research

Accuracy is particularly important when forecasting tourism demand on account of the perishable nature of the product. The main methods used to forecast tourism demand which are reported in published empirical studies are discussed, together with the empirical findings. The vast majority of such studies are concerned with econometric modelling/forecasting, and the most appropriate explanatory variables are examined. Particular emphasis is placed on empirical comparisons of the accuracy of tourism forecasts generated by different techniques. Considerable scope exists for improving the model specification techniques employed in econometric forecasting of tourism demand. Furthermore, no single forecasting method performs consistently best across different situations, but autoregression, exponential smoothing and econometrics are worthy of consideration as alternatives to the no change model.