Advantages of forecasting the demand for tourism

Advantages of forecasting the demand for tourism

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Introduction

Tourism demand forecasts are of great economic value both for the public and private sector. Any information concerning the future evolution of tourism flows is of great importance to hoteliers, tour operators and other industries concerned with tourism or transportation, in order to adjust their policy and corporate finance. In the last few decades, numerous researchers have studied international tourism demand and a wide range of the available forecasting techniques have been tested. Major focus has been given to econometric studies that involve the use of least squares regression to estimate the quantitative relationship between tourism demand and its determinants. However, econometric models usually fail to outperform simple time series extrapolative models. This article introduces a new approach to tourism demand forecasting via incorporating technical analysis techniques. The proposed model is evaluated versus a range of classic univariate time series methods in terms of forecasting and directional accuracy [1].

[Despite efforts by social scientist undertaken since the mid-20^th century (Kates, 1971; White, 1942; White, 1973; Quarantelli, 1988), the risk assessment seen from perspective of disaster risk has only been treated fairly recently. Its systematic conception and analysis was practically assumed by experts and specialists in the natural sciences with studies regarding geodynamics, hydro-meteorological and technological phenomena such as earthquakes, volcanic eruptions, mudslides, flooding and industrial accidents. In other words, emphasis was centered on the knowledge of hazards due to the existing investigative and academic biases and the efforts of those who first reflected on these issues (Cutter, 1994). It is important to point out here that the emphasis still remains, particularly in the highly developed countries, where due to their technological development people try to find greater detail the generating phenomena of the threats. This was an evident trend during the first years of the `International Decade of Natural Disaster Reduction’ declared by the United Nations (UN) General Assembly.]

The tourism industries, and those interested in their success in contributing to the social and economic welfare of a citizenry, need to reduce the risk of decisions, and that is, reduce the chances that a decision will fail to achieve desired objectives. One important way to reduce this risk is by discerning certain future events or environments more clearly. One of the most important events is the demand for a tourism product, be it good, a service or a bundle of services such as vacation or what a destination offers.

All industries are interested in such risk reduction. However, this need may be more acute in the tourism industries than for other industries with other products, for the following reasons [2]:

• The tourism product is perishable. Once an airliner has taken off, or a theme park has closed for the day or morning dawns over a hotel, unsold seats, admissions or sleeping rooms vanish, along with the revenue opportunity associated with them. This puts a premium on shaping demand in the short run and anticipating it in the long run, to avoid both unsold `inventory’ on the one hand and unfulfilled demand on the other.
• People are inseparable from the production-consumption process. To a large extent, the production of the tourism product takes place at the same time as its consumption. And much of this production-consumption process involves people interacting as suppliers and consumers, such as hotel staff, waiters and waitresses, flight attendants and entertainers. This puts a premium on having enough of the right supply personnel available when and where visitors need them.
• Customer satisfaction depen.............