A Study of the Impact of the Asian Financial Crisis on the Accuracy of Tourist Arrival Forecasts

Abstract

The Asian financial crisis has had a significant impact on the tourism industry in the Asia Pacific region. Many published articles have attempted to analyze the causes and effects of this unsettling crisis on a destination's tourism industry in this region. However, there is no published article in the tourism literature that examines the impact of the Asian financial crisis on the quality of visitor arrival forecasts. In view of the importance of accurate forecasting in the context of tourism, this paper makes an attempt to investigate whether time series tourism demand forecasting techniques can accurately predict tourist arrivals from the countries that were affected by the financial crisis. Visitor arrivals in Hong Kong from five countries, four of them seriously affected by the crisis, were used to calibrate and test nine time series forecasting models. Empirical results indicated that the forecasting models performed poorly when predicting tourist arrivals for the crisis-affected countries. In addition, the simple forecasting models outperformed the complicated forecasting models in terms of MAPE accuracy.