Forecasting Chinese Tourism Demand for Thailand: Using Markov Switching Autoregressive Model

Abstract

This study purposed to forecast the Chinese tourism demand for Thailand. The time series data of Chinese tourists arriving in Thailand were estimated by using MS-AR Model, the consumer price index of Thailand, and the Thai exchange rate (THB/RMP) based on a monthly basis ranged between 2014 and 2019 collected from Ministry of Tourism and Sports, Bank of Thailand, and Ministry of Commerce, respectively. The results showed that the consumer price index of Thailand and the Thai exchange rate had a significant effect on Chinese tourism demand for Thailand. The most crucial point of this study demonstrated that the CPI could stimulate the tourism industry during the low season, so that the government can utilize or put some policies in effect for stimulating the tourism industry by controlling the CPI. In addition, this study provides the most appropriate tools to forecast the demand of Chinese tourism in Thailand and the potential options for adaption in the tourism sector.