Methodological advancements in tourism demand modelling and forecasting: time-varying parameter models

Purpose – This paper reviews the evolution of time-varying parameter (TVP) models in tourism demand forecasting to reveal the theoretical reasoning underlying TVP tourism demand models, together with their empirical contributions. Design/methodology/approach – This narrative review synthesizes the dynamic developments of TVP models in tourism demand analysis through an extensive literature review. The paper explores how TVP models have evolved over time and identifies key theoretical and methodological trends in their application. Findings – An in-depth analysis of relevant published studies identifies significant themes and paths in the evolution of TVP models, highlighting their ability to account for structural changes and dynamic interactions among the factors influencing tourism demand. It also discusses the potential applications of advanced TVP models, including their use in predicting demand fluctuations caused by external shocks and optimizing tourism policy. Originality/value – This review contributes to the literature by synthesising the development of TVP models in tourism demand modelling and forecasting, offering insights for researchers and practitioners in the field.