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Tourism forecast combination using the CUSUM technique

Author

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  • Chan, Chi Kin
  • Witt, Stephen F.
  • Lee, Y.C.E.
  • Song, H.

Abstract

Forecast combination in tourism has emerged as an important research area due to its relevance to tourism decision making. This paper further investigates the impact of forecast combination on forecast accuracy by applying a quadratic programming approach to determine the combination weights for individual forecasts. In particular, we introduce three novel ideas which have not been found in previous tourism forecasting studies. First, we introduce a quality control technique, CUSUM, to determine the time for updating the weights. Next, we develop a hybrid method (using quadratic programming) to combine the forecasts to reduce forecasting errors. Thirdly, we investigate whether different performance measures yield different results. Thus, instead of comparing different weighting methods using only one performance measure, we introduce several indicators for performance comparisons. The empirical results suggest that the controlled weighting method both saves time in updating the combination weights and improves the overall performance of the combined forecasts. The method is also easy-to-implement and should be used to improve forecasting accuracy in practice.

Suggested Citation

  • Chan, Chi Kin & Witt, Stephen F. & Lee, Y.C.E. & Song, H., 2010. "Tourism forecast combination using the CUSUM technique," Tourism Management, Elsevier, vol. 31(6), pages 891-897.
    • Handle: RePEc:eee:touman:v:31:y:2010:i:6:p:891-897
    DOI: 10.1016/j.tourman.2009.10.004
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    Cited by:

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    3. Cang, Shuang & Yu, Hongnian, 2014. "A combination selection algorithm on forecasting," European Journal of Operational Research, Elsevier, vol. 234(1), pages 127-139.
    4. Xi Wu & Adam Blake, 2023. "Does the combination of models with different explanatory variables improve tourism demand forecasting performance?," Tourism Economics, , vol. 29(8), pages 2032-2056, December.
    5. Yang, Xin & Pan, Bing & Evans, James A. & Lv, Benfu, 2015. "Forecasting Chinese tourist volume with search engine data," Tourism Management, Elsevier, vol. 46(C), pages 386-397.
    6. Li, Cheng & Ge, Peng & Liu, Zhusheng & Zheng, Weimin, 2020. "Forecasting tourist arrivals using denoising and potential factors," Annals of Tourism Research, Elsevier, vol. 83(C).
    7. Law, Rob & Li, Gang & Fong, Davis Ka Chio & Han, Xin, 2019. "Tourism demand forecasting: A deep learning approach," Annals of Tourism Research, Elsevier, vol. 75(C), pages 410-423.
    8. Andrea Saayman & Ilsé Botha, 2017. "Non-linear models for tourism demand forecasting," Tourism Economics, , vol. 23(3), pages 594-613, May.
    9. Gunter, Ulrich & Önder, Irem, 2016. "Forecasting city arrivals with Google Analytics," Annals of Tourism Research, Elsevier, vol. 61(C), pages 199-212.
    10. Eden Xiaoying Jiao & Jason Li Chen, 2019. "Tourism forecasting: A review of methodological developments over the last decade," Tourism Economics, , vol. 25(3), pages 469-492, May.
    11. Ji Wu & Xian Cheng & Stephen Shaoyi Liao, 2020. "Tourism forecast combination using the stochastic frontier analysis technique," Tourism Economics, , vol. 26(7), pages 1086-1107, November.
    12. Shaolong Suna & Dan Bi & Ju-e Guo & Shouyang Wang, 2020. "Seasonal and Trend Forecasting of Tourist Arrivals: An Adaptive Multiscale Ensemble Learning Approach," Papers 2002.08021, arXiv.org, revised Mar 2020.
    13. Wan, Shui Ki & Song, Haiyan, 2018. "Forecasting turning points in tourism growth," Annals of Tourism Research, Elsevier, vol. 72(C), pages 156-167.
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    15. Assaf, A. George & Tsionas, Mike G., 2019. "Forecasting occupancy rate with Bayesian compression methods," Annals of Tourism Research, Elsevier, vol. 75(C), pages 439-449.

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