Introduction

'Forecasting can be defined as the art of predicting the occurrence of events before they actually take place' (Archer, 1975). Forecasting is a subject that fascinates many people who are interested in the economics of tourism. Estimates of future demand at destination level are very important in managing and planning tourism development and the necessary investment. However, forecasting in the tourism sector is not an easy job. As explained in Chapter 3, many variables have an impact, and some of them are unpredictable.

Owing to the many explanatory factors, forecasting in tourism is different from forecasting in most other sectors. The aim cannot be to provide very precise predictions for example, an increase of arrivals of, say, 5.3 per cent. Those who believe in precise estimations start with the wrong attitude. In tourism, forecasting means indicating the future direction of demand or, in other words, getting an idea of the magnitude of the expected evolution. Knowledge of the extent of future demand should provide sufficient information for a destination management policy, allowing a limit to the range of uncertainty and thus a reduction in investment risks.

Forecasting in tourism focuses on the destination level and far less on individual enterprises. Large attractions (for example theme parks) are an exception to the general rule, but very often these are in fact visitor destinations in their own right.

Tourism forecasting requires a particular philosophy. It is often said that 'forecasting in tourism is an art'. This should not be...