A forecasting model of tourist arrivals from major markets to Thailand

Abstract

International tourism is a rapidly growing phenomenon hics. worldwide. However, the East Asia and Pacific Region is expected to be the focus of the worldwide tourism industry in the new millennium because tourist arrivals and receipts registered a growth about twice the rates of industrialized countries in the last decade. The tourism industry has become a powerful engine for economic development and a major foreign exchange generator. With such growth and increased competition, it is vitally important to forecast tourism demand in the region and understand the factors affecting demand. Considering the national importance of tourism, Thailand was chosen as the destination country with nine major markets as the countries of origin. A model was developed for each country to forecast tourism demand from that market. Multiple regression analysis was applied over time series data. The empirical results suggest that independent variables, such as income level in the country of origin, prices of tourism goods in the destination country, currency exchange rate between the origin and destination country, and rooms supply in destination, do affect tourism demand. Qualitative factors, represented by dummy variables, namely special promotional program and political unrest, show slight impact on demand. The study reveals that there are differences in the relative impacts of variables among the tourist generating countries. Thus, country-specific forecasting models and strategies must be formulated to reflect the uniqueness of each country of origin. Furthermore, forecasting techniques should include more qualitative factors to better asses their impacts on tourism demand. For future research, it is suggested that the models developed be updated regularly to reflect changes in the selected independent variables. Surveys and studies dealing with consumer motivation should be carried out to understand more about the tourists themselves and how they select particular destinations and types of tourism. Finally, in order to take advantage of modern technologies, the Internet is suggested as a tool to promote tourism.