Forecasting Tourism-Generated Employment: The Case of Denmark

Abstract

The empirical results from a forecasting competition show that the unrestricted vector autoregressive model is likely to generate the most accurate forecasts of international tourist expenditure in Denmark. This model is therefore estimated (using data for 1969–99) and is used to generate tourism expenditure forecasts for Denmark to 2010. The employment requirements (direct, indirect and induced) associated with these expenditure forecasts are then estimated using an input–output model. The forecasts of employment demands are shown across all industrial sectors, and linked to qualifications data in respect of the labour force. The major impacts of foreign tourist expenditure on employment in Denmark occur in the retail, hotel and restaurant sectors. Foreign tourist expenditure is also significantly associated with graduate employment.