Forecasting the number of incoming tourists using Arima model: case study from Armenia

Abstract

This paper summarizes the arguments and counterarguments within the scientific discussion on the issue of forecasting tourism demand and touristic flows. During COVID-19 tourism sphere suffered a lot in the whole world. Many countries try to do forecasts and make recovery plans for tourism. Tourism has been a growing sphere in Armenia in recent years. However, the number of incoming tourists decreased by 80 percent because of the pandemic. The main purpose of the research is to forecast tourism demand in the Republic of Armenia. Systematization of scientific sources and approaches for solving the problem identified many methods and models for doing forecasts. The variables used to depend on the method selected. For gaining the research goal, the study was carried out in the following logical sequence: 1) discussion on some literature sources; 2) analysis of the current situation of tourism in Armenia; 3) interpretation of forecast results; 4) providing some recommendations. The methodological tool of the research was mainly the ARIMA method. The data rest on the publications of the Statistical Committee of the Republic of Armenia. Time series for the number of incoming tourists include from 2001-Q1 till 2019-Q4 data. 2020 was not included in the model, as there was a sharp decline. Besides, in the second quarter of 2020, there were no tourists at all because of restrictions and flight cancellations. The obtained data show that if there were no pandemic, the number of incoming tourists would increase on average by 12.81% in 2021, 13.42% – in 2022, and 13.66% – in 2023. The results are realistic. The tourism sphere is expected to grow in 2021. This paper suggested some steps for recovering and restoring tourism, particularly by using aggressive marketing strategies, word-of-mouth, influencer marketing, etc. The research results could be useful for state organs of the sphere to forecast their strategic policies. The applied approach and suggestions may be helpful in many countries which try to restart tourism after the pandemic.