Tourism forecast combination using the CUSUM technique

Chi Kin Chan, Stephen F. Witt, Y. C.E. Lee, Haiyan Song

Research output: Journal article publicationJournal articleAcademic researchpeer-review

17 Citations (Scopus)

Abstract

Forecast combination in tourism has emerged as an important research area due to its relevance to tourism decision making. This paper further investigates the impact of forecast combination on forecast accuracy by applying a quadratic programming approach to determine the combination weights for individual forecasts. In particular, we introduce three novel ideas which have not been found in previous tourism forecasting studies. First, we introduce a quality control technique, CUSUM, to determine the time for updating the weights. Next, we develop a hybrid method (using quadratic programming) to combine the forecasts to reduce forecasting errors. Thirdly, we investigate whether different performance measures yield different results. Thus, instead of comparing different weighting methods using only one performance measure, we introduce several indicators for performance comparisons. The empirical results suggest that the controlled weighting method both saves time in updating the combination weights and improves the overall performance of the combined forecasts. The method is also easy-to-implement and should be used to improve forecasting accuracy in practice.
Original languageEnglish
Pages (from-to)891-897
Number of pages7
JournalTourism Management
Volume31
Issue number6
DOIs
Publication statusPublished - 1 Dec 2010

Keywords

  • Combination weights
  • Forecast combination
  • Quadratic programming
  • Tourism forecasts

ASJC Scopus subject areas

  • Development
  • Transportation
  • Tourism, Leisure and Hospitality Management
  • Strategy and Management

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