A technical analysis approach to tourism demand forecasting

Abstract

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.