Forecasting Turkey's tourism revenues by ARMAX model

An appropriate ARMAX model is applied to forecast international tourism revenues for Turkey for the post-2001 economic crisis. International tourist arrivals were seasonally dependable on earlier arrivals at lagged periods one, two and four. This implies high levels of repeat visiting. Through this model, the future international tourists arrivals are forecast for the 2002-2007 period to determine possible revenues for that same period. International tourism revenues can be explained by the current arrivals, a first-order autoregressive and a stochastic moving average filter at lag 3 for the 1963-2001 sample period. Future values of revenues are forecasted based on this model. The estimated models and their forecasts may be important for the economy of Turkey which is currently recovering from the recent economic crisis. Once US dollars expenditure per tourist is forecasted the gap between forecasts and needs can be defined more rationally to overcome economic crises. In short, discrepancy analysis may aid marketing promotion to increase arrivals and tourist expenditures. (C) 2003 Elsevier Ltd. All rights reserved.