Forecasting tourist arrivals

Abstract Various exponential smoothing models are estimated over the period 1975–1999 to forecast quarterly tourist arrivals to Australia from Hong Kong, Malaysia, and Singapore. The root mean squared error criterion is used as a measure of forecast accuracy. Prior to obtaining the one-quarter-ahead forecasts for the period 1998 to 2000, the individual arrival series are tested for unit roots to distinguish between stationary and non-stationary time series arrivals. The Holt–Winters Additive and Multiplicative Seasonal models outperform the Single, Double, and the Holt–Winters Non-Seasonal Exponential Smoothing models in forecasting. It is also found that forecasting the first differences of tourist arrivals performs worse than forecasting its various levels.