Forecasting Japanese Arrivals to Guam- An Empirical Model

Abstract

Monthly air arrival patterns of Japanese travelers to Guam were examined in this study. An empirical demand model was developed and validated that explained more than 95 percent of variation in the arrival patterns of Japanese visitors over the ten-year period between 1987 and 1997. A significant positive relationship was found between Japanese monthly earnings and their air arrival patterns resulting in an income elasticity estimate of 1.70. Significant seasonality was also identified. The previous periods' arrival data was also found to be a helpful predictor of the future tourism demand from the Japanese market. The model was used to simulate arrival data and produced simulations with a mean absolute percent error below the 10 percent level. Implications of the study were discussed in the context of forecasting modeling and destination marketing.