Abstract:
Information about the current and forecast levels of tourism and its contribution to the
economy is important for policymaking by businesses and governments. Traditional
forecasting methods can provide reasonable forecasts in the context of predicable
changes. However, forecasting becomes problematic in the context of both predictable
changes and less predictable domestic or international shocks. This paper demonstrates
the ways in which an integrated model, combining traditional forecasting methods and
quantifiable scenario forecasts, can be used to examine complex combinations of
events. The model is applied to Sri Lanka’s tourism indicators, which provide a picture of
tourism in the Sri Lankan economy, with traditional forecasting methods and quantifiable
scenario forecasts. Results are provided for a combination of changes in relative
exchange rates, income of major origin countries and a positive shock to tourism
demand, to demonstrate the integrated model's ability to take account of the complex
multiple events that affect tourism destinations.
