IDEAS home Printed from https://ideas.repec.org/a/sae/toueco/v23y2017i2p403-428.html
   My bibliography  Save this article

International arrivals forecasting for Australian airports and the impact of tourism marketing expenditure

Author

Listed:
  • Wai Hong Kan Tsui

    (Massey University, New Zealand; The Chinese University of Hong Kong, Hong Kong)

  • Faruk Balli

    (Massey University, New Zealand; University of Gediz, Turkey)

Abstract

An airport’s international passenger arrivals are susceptible to exogenous and endogenous factors (such as economic conditions, flight services, fluctuations and shocks). Accurate and reliable airport passenger demand forecasts are imperative for policymaking and planning by airport and airline management as well as by tourism authorities and operators. This article employs the Box–Jenkins SARIMA, SARIMAX and SARIMAX/EGARCH volatility models to forecast international passenger arrivals for the eight key Australian airports (Adelaide, Brisbane, Cairns, Darwin, Gold Coast, Melbourne, Perth and Sydney). Monthly international tourist arrivals between January 2006 and September 2012 are used for the empirical analysis. All the forecasting models are highly accurate with the lower values of mean absolute percentage error, mean absolute error and root mean squared error. The findings suggest that the international passenger arrivals of Australian airports are affected by positive and negative shocks and tourism marketing expenditure is also a significant factor influencing the majority of Australian airports’ international passenger arrivals.

Suggested Citation

  • Wai Hong Kan Tsui & Faruk Balli, 2017. "International arrivals forecasting for Australian airports and the impact of tourism marketing expenditure," Tourism Economics, , vol. 23(2), pages 403-428, March.
    • Handle: RePEc:sae:toueco:v:23:y:2017:i:2:p:403-428
    DOI: 10.5367/te.2015.0507
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5367/te.2015.0507
    Download Restriction: no
    File URL: https://libkey.io/10.5367/te.2015.0507?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Zhang, Yahua, 2015. "International arrivals to Australia: Determinants and the role of air transport policy," Journal of Air Transport Management, Elsevier, vol. 44, pages 21-24.
    2. Xiaowen Fu & Tae Hoon Oum, 2014. "Air Transport Liberalization and its Effects on Airline Competition and Traffic Growth – An Overview," Advances in Airline Economics, in: The Economics of International Airline Transport, volume 4, pages 11-44, Emerald Group Publishing Limited.
    3. Franses, Philip Hans, 1991. "Seasonality, non-stationarity and the forecasting of monthly time series," International Journal of Forecasting, Elsevier, vol. 7(2), pages 199-208, August.
    4. Nelson, Daniel B, 1991. "Conditional Heteroskedasticity in Asset Returns: A New Approach," Econometrica, Econometric Society, vol. 59(2), pages 347-370, March.
    5. Bowden, Nicholas & Payne, James E., 2008. "Short term forecasting of electricity prices for MISO hubs: Evidence from ARIMA-EGARCH models," Energy Economics, Elsevier, vol. 30(6), pages 3186-3197, November.
    6. Neelu Seetaram, 2012. "Estimating Demand Elasticities for Australia's International Outbound Tourism," Tourism Economics, , vol. 18(5), pages 999-1017, October.
    7. Hsiao, Chieh-Yu & Hansen, Mark, 2011. "A passenger demand model for air transportation in a hub-and-spoke network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 1112-1125.
    8. Hylleberg, S. & Engle, R. F. & Granger, C. W. J. & Yoo, B. S., 1990. "Seasonal integration and cointegration," Journal of Econometrics, Elsevier, vol. 44(1-2), pages 215-238.
    9. Tsui, Wai Hong Kan & Ozer Balli, Hatice & Gilbey, Andrew & Gow, Hamish, 2014. "Forecasting of Hong Kong airport's passenger throughput," Tourism Management, Elsevier, vol. 42(C), pages 62-76.
    10. Larry Dwyer & Peter Forsyth & Ray Spurr & Thiep Van Ho, 2006. "Economic Effects of the World Tourism Crisis on Australia," Tourism Economics, , vol. 12(2), pages 171-186, June.
    11. Divino, Jose Angelo & McAleer, Michael, 2010. "Modelling and forecasting daily international mass tourism to Peru," Tourism Management, Elsevier, vol. 31(6), pages 846-854.
    12. Rohan Longmore & Wayne Robinson, 2005. "Modelling and Forecasting Exchange Rate Dynamics in Jamaica: an Application of Asymmetric Volatility Models," Money Affairs, CEMLA, vol. 0(1), pages 23-56, January-J.
    13. María Santana-Gallego & Francisco J. Ledesma-Rodríguez & Jorge V. Pérez-Rodríguez, 2010. "Exchange Rate Regimes and Tourism," Tourism Economics, , vol. 16(1), pages 25-43, March.
    14. Bollerslev, Tim, 1986. "Generalized autoregressive conditional heteroskedasticity," Journal of Econometrics, Elsevier, vol. 31(3), pages 307-327, April.
    15. Schiff, Aaron & Becken, Susanne, 2011. "Demand elasticity estimates for New Zealand tourism," Tourism Management, Elsevier, vol. 32(3), pages 564-575.
    16. Lim, Christine & McAleer, Michael & Min, Jennifer C.H., 2009. "ARMAX modelling of international tourism demand," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 79(9), pages 2879-2888.
    17. McAleer, Michael & Chan, Felix & Marinova, Dora, 2007. "An econometric analysis of asymmetric volatility: Theory and application to patents," Journal of Econometrics, Elsevier, vol. 139(2), pages 259-284, August.
    18. Sung Yong Park & Sang Young Jei, 2010. "Determinants of volatility on international tourism demand for South Korea: an empirical note," Applied Economics Letters, Taylor & Francis Journals, vol. 17(3), pages 217-223, February.
    19. Rey, Belén & Myro, Rafael L. & Galera, Asun, 2011. "Effect of low-cost airlines on tourism in Spain. A dynamic panel data model," Journal of Air Transport Management, Elsevier, vol. 17(3), pages 163-167.
    20. Zhang, Yahua & Findlay, Christopher, 2014. "Air transport policy and its impacts on passenger traffic and tourist flows," Journal of Air Transport Management, Elsevier, vol. 34(C), pages 42-48.
    21. AfDB AfDB, . "Annual Report 2012," Annual Report, African Development Bank, number 461.
    22. Philip Hans Franses & Bart Hobijn, 1997. "Critical values for unit root tests in seasonal time series," Journal of Applied Statistics, Taylor & Francis Journals, vol. 24(1), pages 25-48.
    23. Nada Kulendran & Sarath Divisekera, 2007. "Measuring the Economic Impact of Australian Tourism Marketing Expenditure," Tourism Economics, , vol. 13(2), pages 261-274, June.
    24. Chi, Junwook & Koo, Won W. & Lim, Siew H., 2010. "Demand Analysis for Air Passenger Service in U.S. City-Pair Markets," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 49(1).
    25. Graham, Anne, 2006. "Have the major forces driving leisure airline traffic changed?," Journal of Air Transport Management, Elsevier, vol. 12(1), pages 14-20.
    26. Becken, Susanne & Lennox, James, 2012. "Implications of a long-term increase in oil prices for tourism," Tourism Management, Elsevier, vol. 33(1), pages 133-142.
    27. James Lennox, 2012. "Impacts of High Oil Prices on Tourism in New Zealand," Tourism Economics, , vol. 18(4), pages 781-800, August.
    28. Warnock-Smith, David & Morrell, Peter, 2008. "Air transport liberalisation and traffic growth in tourism-dependent economies: A case-history of some US-Caribbean markets," Journal of Air Transport Management, Elsevier, vol. 14(2), pages 82-91.
    29. Lim, Christine & McAleer, Michael, 1999. "A seasonal analysis of Malaysian tourist arrivals to Australia," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 48(4), pages 573-583.
    30. Engle, Robert F, 1982. "Autoregressive Conditional Heteroscedasticity with Estimates of the Variance of United Kingdom Inflation," Econometrica, Econometric Society, vol. 50(4), pages 987-1007, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wai Hong Kan Tsui & David Tat Wei Tan & Song Shi, 2017. "Impacts of airport traffic volumes on house prices of New Zealand’s major regions: A panel data approach," Urban Studies, Urban Studies Journal Limited, vol. 54(12), pages 2800-2817, September.
    2. Nguyen, Quang Hai, 2024. "Modeling the volatility of international air freight: A case study of Singapore using the SARIMAX-EGARCH model," Journal of Air Transport Management, Elsevier, vol. 117(C).
    3. Elisa Jorge-González & Enrique González-Dávila & Raquel Martín-Rivero & Domingo Lorenzo-Díaz, 2020. "Univariate and multivariate forecasting of tourism demand using state-space models," Tourism Economics, , vol. 26(4), pages 598-621, June.
    4. Hong Tsui, Kan Wai, 2017. "Does a low-cost carrier lead the domestic tourism demand and growth of New Zealand?," Tourism Management, Elsevier, vol. 60(C), pages 390-403.
    5. Marion Karl & Gordon Winder & Alexander Bauer, 2017. "Terrorism and tourism in Israel," Tourism Economics, , vol. 23(6), pages 1343-1352, September.
    6. Wai Hong Kan Tsui & Faruk Balli & David Tat Wei Tan & Oscar Lau & Mudassar Hasan, 2018. "New Zealand business tourism," Tourism Economics, , vol. 24(4), pages 386-417, June.
    7. Xi Wu & Adam Blake, 2023. "The Impact of the COVID-19 Crisis on Air Travel Demand: Some Evidence From China," SAGE Open, , vol. 13(1), pages 21582440231, January.
    8. Paul R. Gregory & Kuangli Kuang, 2020. "How Does Uncertainty in Economic Policy React to Oil Price Shocks in Australia?," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 10(2), pages 42-48.
    9. López, Ana M. & Flores, Mario A. & Sánchez, Juan I., 2017. "Modelos de series temporales aplicados a la predicción del tráfico aeroportuario español de pasajeros: Un enfoque agregado y desagregado/Forecasting of Spanish Passenger Air Traffic Based on Time Seri," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 35, pages 395-418, Mayo.
    10. Zheng, Weimin & Huang, Liyao & Lin, Zhibin, 2021. "Multi-attraction, hourly tourism demand forecasting," Annals of Tourism Research, Elsevier, vol. 90(C).
    11. Stavros A Kourtzidis & Panayiotis Tzeremes & Nickolaos G Tzeremes & Tomáš Heryán, 2018. "Integration of tourism markets in Australia," Tourism Economics, , vol. 24(7), pages 901-907, November.
    12. Balli, Hatice Ozer & Tsui, Wai Hong Kan & Balli, Faruk, 2019. "Modelling the volatility of international visitor arrivals to New Zealand," Journal of Air Transport Management, Elsevier, vol. 75(C), pages 204-214.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Balli, Hatice Ozer & Tsui, Wai Hong Kan & Balli, Faruk, 2019. "Modelling the volatility of international visitor arrivals to New Zealand," Journal of Air Transport Management, Elsevier, vol. 75(C), pages 204-214.
    2. Chia-Lin Chang & Thanchanok Khamkaew & Roengchai Tansuchat & Michael McAleer, 2011. "Interdependence of International Tourism Demand and Volatility in Leading ASEAN Destinations," Tourism Economics, , vol. 17(3), pages 481-507, June.
    3. Chia-Lin Chang & Michael Mcaleer, 2009. "Daily Tourist Arrivals, Exchange Rates and Voatility for Korea and Taiwan," Korean Economic Review, Korean Economic Association, vol. 25, pages 241-267.
    4. Chia-Lin Chang & Michael McAleer & Christine Lim, 2010. "Modelling the Volatility in Short and Long Haul Japanese Tourist Arrivals to New Zealand and Taiwan," Working Papers in Economics 10/40, University of Canterbury, Department of Economics and Finance.
    5. Wang, Sen & Gao, Yi, 2021. "A literature review and citation analyses of air travel demand studies published between 2010 and 2020," Journal of Air Transport Management, Elsevier, vol. 97(C).
    6. Chia-Lin Chang & Michael Mcaleer, 2012. "Aggregation, Heterogeneous Autoregression And Volatility Of Daily International Tourist Arrivals And Exchange Rates," The Japanese Economic Review, Japanese Economic Association, vol. 63(3), pages 397-419, September.
    7. Franses,Philip Hans & Dijk,Dick van & Opschoor,Anne, 2014. "Time Series Models for Business and Economic Forecasting," Cambridge Books, Cambridge University Press, number 9780521520911, November.
    8. Chu, L. & McAleer, M.J. & Chen, C-C., 2009. "How Volatile is ENSO?," Econometric Institute Research Papers EI 2009-18, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    9. John D. Levendis, 2018. "Time Series Econometrics," Springer Texts in Business and Economics, Springer, number 978-3-319-98282-3, June.
    10. Tsui, Wai Hong Kan & Ozer Balli, Hatice & Gilbey, Andrew & Gow, Hamish, 2014. "Forecasting of Hong Kong airport's passenger throughput," Tourism Management, Elsevier, vol. 42(C), pages 62-76.
    11. Petropoulos, Fotios & Apiletti, Daniele & Assimakopoulos, Vassilios & Babai, Mohamed Zied & Barrow, Devon K. & Ben Taieb, Souhaib & Bergmeir, Christoph & Bessa, Ricardo J. & Bijak, Jakub & Boylan, Joh, 2022. "Forecasting: theory and practice," International Journal of Forecasting, Elsevier, vol. 38(3), pages 705-871.
      • Fotios Petropoulos & Daniele Apiletti & Vassilios Assimakopoulos & Mohamed Zied Babai & Devon K. Barrow & Souhaib Ben Taieb & Christoph Bergmeir & Ricardo J. Bessa & Jakub Bijak & John E. Boylan & Jet, 2020. "Forecasting: theory and practice," Papers 2012.03854, arXiv.org, revised Jan 2022.
    12. Chia-Lin Chang & Michael McAleer & Christine Lim, 2009. "Modelling Short and Long Haul Volatility in Japanese Tourist Arrivals to New Zealand and Taiwan," CIRJE F-Series CIRJE-F-647, CIRJE, Faculty of Economics, University of Tokyo.
    13. Michael Reutter & Jakob Von Weizsacker & Frank Westermann, 2002. "SeptemBear - A seasonality puzzle in the German stock index DAX," Applied Financial Economics, Taylor & Francis Journals, vol. 12(11), pages 765-769.
    14. Chang, Chia-Lin, 2015. "Modelling a latent daily Tourism Financial Conditions Index," International Review of Economics & Finance, Elsevier, vol. 40(C), pages 113-126.
    15. Chang, Chia-Lin & Hsu, Hui-Kuang, 2013. "Modelling Volatility Size Effects for Firm Performance: The Impact of Chinese Tourists to Taiwan," MPRA Paper 45691, University Library of Munich, Germany.
    16. Chia-Lin Chang & Yiying Li & Michael McAleer, 2018. "Volatility Spillovers between Energy and Agricultural Markets: A Critical Appraisal of Theory and Practice," Energies, MDPI, vol. 11(6), pages 1-19, June.
    17. Chang, Chia-Lin & McAleer, Michael & Tansuchat, Roengchai, 2010. "Analyzing and forecasting volatility spillovers, asymmetries and hedging in major oil markets," Energy Economics, Elsevier, vol. 32(6), pages 1445-1455, November.
    18. Allen, David E. & Amram, Ron & McAleer, Michael, 2013. "Volatility spillovers from the Chinese stock market to economic neighbours," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 94(C), pages 238-257.
    19. Chan, Felix & Marinova, Dora & McAleer, Michael, 2004. "Modelling the asymmetric volatility of electronics patents in the USA," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 64(1), pages 169-184.
    20. CHIA-LIN CHANG & MICHAEL McALEER & ROENGCHAI TANSUCHAT, 2012. "Modelling Long Memory Volatility In Agricultural Commodity Futures Returns," Annals of Financial Economics (AFE), World Scientific Publishing Co. Pte. Ltd., vol. 7(02), pages 1-27.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:toueco:v:23:y:2017:i:2:p:403-428. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.