Abstract
Tourism is a major activity for many countries in the Caribbean. Accurate forecasts of visitor arrivals can assist planning efforts in the public and private sectors. This study uses error correction models (ECMs) to analyse visitor arrivals in the Bahamas. Findings suggest that income and habit persistence/word-of-mouth advertising are primary determinants of tourism to the Bahamas, while the cost of travel is generally insignificant. To assess the model reliability further, ECM forecasts are compared to random walk and random walk with drift benchmarks. The ECMs provide fairly reliable forecasts, but are less accurate than the benchmarks.
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