Original scientific paper
https://doi.org/10.1080/1331677X.2015.1100842
Forecasting Croatian inbound tourism demand
Josip Tica
orcid.org/0000-0001-7937-1573
Ivan Kožić
Abstract
The aim of this paper is to present a forecasting model for the overnight stays of foreign tourists in Croatia. Tourism is one of the most important parts of the Croatian economy. It is particularly important in the context of the services sector. Regular and significant surpluses and the consumption of foreign guests are an important
element of budget revenues, especially VAT. The ability to forecast the development of inbound tourism demand in a timely manner is crucial for both business decisions and policy-making. We combine the Granger causality test for identifying leading indicators with a grid search of the weights used to construct a composite indicator. An endogenous grid search for data driven weights was employed to minimise the mean absolute percentage error (MAPE) of the out-of-sample forecast. In total, we carried out 7.7 billion out-of-sample regressions in order to find the optimal combination of leading indicator weights. Results indicate that only four out of the 12
identified leading indicators are relevant in explaining variations in inbound tourism demand. The most important leading indicators are: real GDP and imports in Poland and gross wages in the Czech Republic and Slovakia.
Keywords
tourism demand; forecasting; leading indicators; composite indicator; Granger causality; weights optimisation
Hrčak ID:
171615
URI
Publication date:
20.12.2015.
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