Combination forecasts of International tourism demand

Abstract

This study investigates the performance of combination forecasts in the context of international tourism demand. Five econometric and two time-series models are employed to generate individual forecasts. Six combination methods are then employed, and their forecasting performance evaluated, using data on UK outbound tourism demand in seven destination countries. The results suggest that combination forecasts, in general, outperform the best individual forecasts. More sophisticated such combination methods, which take the historical performance of individual forecasts into account, perform better than the simple average technique. The performance of combination forecasts is associated with the performance consistency of the individual forecasts they include, and the inclusion of up to three individual forecasts is most likely to result in accurate combination forecasts.