Forecasting Turning Points in International Visitor Arrivals in the Balearic Islands

Abstract

The aim of this paper is to forecast turning points in international visitor arrivals to the Balearic Islands using the leading indicator approach. The paper prepares two indexes, one for the UK and one for Germany using macro-economic variables. The UK and Germany are the major tourist markets for the Balearic Islands and represent more than 80% of international visitor arrivals. Previous studies have used econometric models and time-series models to forecast the number of international visitor arrivals, but uncertainty persists.