Practical Tourism Forecasting :
the Example of Asia Pacific
Stephen F. Witt
Emeritus Professor (Tourism Forecasting)
My Background
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Mathematics
Mathematical statistics
Economics
Econometrics
PhD – econometric study of UK outbound
tourism demand
Academic Research –
Books & Journal Papers
• Econometric modelling of international tourism
demand
• Assessment of accuracy of different forecasting
methods within tourism context, i.e. which
methods work best under what circumstances
(time horizon, data frequency, ….)
Application of
Academic Research Results
• Take results from academic research on tourism
forecasting and apply to practical tourism
forecasting situations
• Various consultancy studies for companies and
destinations NTOs
• Ongoing annual publication of tourism forecasts
for Pacific Asia Travel Association (PATA)
Asia Pacific Tourism Forecasts
• Lindsay W. Turner, Victoria University,
Melbourne
• Stephen F. Witt, University of Surrey
• Publisher: PATA, Bangkok
• Initial publisher Travel and Tourism Intelligence,
London ( part of Corporate Intelligence Group)
• Asia Pacific Tourism Forecasts 2000-2004,
published in 2000
• Subsequently switched to PATA, publishing with
them every year since 2001
• Asia Pacific Tourism Forecasts 2012-2014,
published in 2012
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40 Asia Pacific destinations
Forecasts by country of origin
1,400 forecast series
International arrivals forecast to grow
5% to Asia Pacific to reach ½ billion by 2014
6% to Asia
3% to North America
2% to Pacific
Methodology
Model Selection
• Time series models estimated from data series
and give mathematical projection of seasonal,
cyclical and trend components
BSM (basic structural model)
• Add dummy variables where appropriate to
allow for political instability, terrorist activity,
natural disasters (cyclones, tsunamis), financial
crises, health threats (SARS, H1N1) or other
events expected to influence time series
BSM + interventions
• Add economic variables: decision to
keep/remove variable based on correct sign
according to economic theory and statistical
significance
CSM (causal structural model)
• Within sample 8 quarters forecasting accuracy
testing
• If results not good try another method such as
ECM (error correction model) or TVP
(time varying parameter) model
Forecast Adjustment
• Forecasts generated by quantitative process
assessed by experts (PATA, NTOs …) as to
likely inaccuracies given any unmeasured
factors the experts consider may raise or lower
numbers
• Quantitative model derived forecasts are
adjusted to take expert to opinion into account
Economic Variables
• Income (per capita PDI or GDP)
• Destination price (destination CPI divided by
origin CPI adjusted by origin – destination
exchange rate)
• Air fare index
International Tourist Arrivals to
Asia Pacific Markets
Total North America
Top 10 Forecast Asia Pacific
Destinations 2014
8
THAILAND
Forecast Arrivals 2012 -2014
Top 5 Departures Forecasts from
Asia Pacific Main Markets
Australia to
2010
2014
10-14 AAGR (%)
1,119,879
1,140,341
0.45
USA
904,247
1,315,646
9.83
Singapore
880,486
1,212,202
8.32
Thailand
698,046
1,073,993
11.37
China
661,300
846,983
6.38
Hong Kong
22,684,388
35,234,973
11.64
Macau
13,229,058
22,522,091
14.23
Korea (ROK)
1,875,157
2,837,241
10.91
Chinese Taipei
1,630,735
1,907,627
4.00
Japan
1,412,875
1,169,074
-4.62
New Zealand
China to
Hong Kong to
2010
2014
10-14 AAGR (%)
China
79,321,900
83,882,428
1.41
Macau
7,466,139
7,804,562
1.11
Chinese Taipei
794,362
827,945
1.04
Japan
508,691
320,314
-10.92
Singapore
387,552
700,047
15.93
Singapore
828,903
1,006,682
4.98
Thailand
760,371
1,360,007
15.65
Malaysia
690,849
1,044,250
10.88
USA
650,935
712,318
2.28
549,300
738,151
7.67
India to
China
Japan to
2010
2014
10-14 AAGR (%)
USA
3,386,076
3,492,110
0.77
China
3,731,200
3,836,004
0.69
Korea (ROK)
3,023,009
3,437,596
3.27
Hong Kong
1,316,618
1,304,567
-0.23
Chinese Taipei
1,080,153
1,478,854
8.17
China
4,076,400
4,647,324
3.33
Japan
2,439,816
2,444,697
0.05
USA
1,107,518
1,320,614
4.50
891,024
1,356,713
11.08
805,445
1,473,092
16.29
Korea (ROK) to
Hong Kong
Thailand
USA to
2010
2014
10-14 AAGR (%)
Mexico
17,967,691
19,241,765
1.73
Canada
11,746,366
12,413,968
1.39
China
2,009,600
2,351,911
4.01
Hong Kong
1,171,419
1,267,315
1.99
915,579
1,256,142
8.23
India
Tourist Arrivals from SA to
Asia Pacific Destinations
North America
2010
2014
10-14 AAGR (%)
Mexico
4,861
6,436
7.3
80,174
97,311
5.0
4,066
4,613
3.2
77,658
91,490
4.2
Korea (ROK)
9,633
11,235
3.9
Macau
4,624
6,663
9.6
70
122
14.9
55,688
69,293
5.6
Maldives
3,157
5,111
12.8
Pakistan
5,846
11,391
14.3
Sri Lanka
1,415
2,768
18.3
USA
Northeast Asia
Chinese Taipei
Hong Kong
South Asia
Bhutan
India
Southeast Asia
2010
2014
10-14 AAGR (%)
Indonesia
12,691
16,919
7.5
Malaysia
26,395
30,677
3.8
Philippines
2,774
4,024
9.8
Singapore
32,428
37,398
3.6
Thailand
57,100
90,672
12.3
Australia
62,170
69,705
2.9
New Zealand
17,401
25,886
10.4
Pacific