A new forecasting approach for the hospitality industry

Abstract

Purpose – This study aims to apply a new forecasting approach to improve predictions in the hospitality industry. To do so, the authors developed a multivariate setting that allows the incorporation of the cross-correlations in the evolution of tourist arrivals from visitor markets to a specific destination in neural network models. Design/methodology/approach – This multiple-input-multiple-output approach allows the generation of predictions for all visitor markets simultaneously. Official data of tourist arrivals to Catalonia (Spain) from 2001 to 2012 were used to generate forecasts for one, three and six months ahead with three different networks. Findings – The study revealed that multivariate architectures that take into account the connections between different markets may improve the predictive performance of neural networks. Additionally, the authors developed a new forecasting accuracy measure and found that radial basis function networks outperform the rest of the models. Research limitations/implications – This research contributes to the hospitality literature by developing an innovative framework to improve the forecasting performance of artificial intelligence techniques and by providing a new forecasting accuracy measure. Practical implications – The proposed forecasting approach may prove very useful for planning purposes, helping managers to anticipate the evolution of variables related to the daily activity of the industry. Originality/value – A multivariate neural network framework has been developed to improve forecasting accuracy, providing professionals with an innovative and practical forecasting approach.