The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian tourism industry’s ability to accurately predict visitor arrivals trends increases by 30 percent if it incorporates Internet search data into its forecasts, an IMF paper has revealed.

The report Where should we go? Internet searches and tourist arrivals, written by Serhan Cevik, analysed Bahamian tourist arrivals data from 2004 to 2018 to determine that building Google Trends data into forecasting models improves both the Ministry of Tourism’s and private sector’s ability to correctly predict future visitor numbers.

It added that such accuracy was critical to both “better planning and investment” in The Bahamas’ largest industry, and informing decision-making by both the government, resort industry and other private sector operators.

The International Monetary Fund (IMF) paper focused on US arrivals data for that 14-year period, given that this is the source market from which more than 80 percent of The Bahamas’ visitors originate. Dionisio D’Aguilar, minister of tourism, just last week announced a record 1.78m stopover visitors for 2019, with 1.45m coming from the US, and 7.216m total arrivals for the same year.

“As tourism is the main engine of economic growth in The Bahamas, accurate forecasting of tourist arrivals is critical for informed decision-making by policymakers and businesses,” the report and its author concluded.

“The main objective of this paper is therefore to evaluate alternative forecast models and the usefulness of the Google Trends data in predicting monthly tourist arrivals to The Bahamas from the US, which accounts for about 80 percent of the total number of visitors.”

It added that results showed the model incorporating online search data from the Internet’s largest search engine, accounting for 90 percent of all such activity, “outperformed” all other models when it came to predicting tourist flows.

“Furthermore, checking the quality of alternative forecast models through three different measures of predictive accuracy, the model augmented with the Google Trends data is found to bring a significant improvement in forecast performance,” the IMF report added.

“The model augmented with online search data improves forecasting performance by about 30 percent compared to the benchmark model, and more than 20 percent compared to the model extended only with macroeconomic variables.

“These findings are broadly consistent with previous studies, and indicate that Internet search data can help in real-time surveillance and provide more reliable forecasts of tourism activity. Hence, policymakers and private firms operating in the tourism industry would benefit from internet search data-augmented forecast models in better planning and investment.”

The IMF report added that while US visitor numbers increased in line with personal income growth in that country, and decreased if there was a rise in relative price levels in The Bahamas, these effects were not “significant”.

Reiterating tourism’s importance to this nation, the report added: “In the case of The Bahamas, the economy is extremely dependent on fast-growing tourism, which contributes - directly and indirectly - about 48 percent of GDP and 56 percent of employment, respectively.”