Forecasting tourist arrivals

Abstract

Various exponential smoothing models are estimated over the period 1975-1999 to forecast quarterly tourist arrivals to Australia from Hong Kong, Malaysia, and Singapore. The root mean squared error criterion is used as a measure of forecast accuracy. Prior to obtaining the one-quarter-ahead forecasts for the period 1998 to 2000, the individual arrival series are tested for unit roots to distinguish between stationary and non-stationary time series arrivals. The Holt-Winters Additive and Multiplicative Seasonal models outperform the Single, Double, and the Holt-Winters Non-Seasonal Exponential Smoothing models in forecasting. It is also found that forecasting the first differences of tourist arrivals performs worse than forecasting its various levels.