Tourism Economics – Individual Project

Subject: The process of tourism demand forecasting is as important as the outcome. Why might this be so?

The Tourism Sector represented a worldwide turnover of 852 billion $ in 2009. For a country like France, this sector represented, in 2009, a receipt of 49,4 billion $. Those numbers show the importance and the weight of the tourism sector in a country economy. John Naisbitt explained in its books Global Paradox in 1994 that tourism would be one of the three industries that will drive the world economy in the 21st century. To comprehend at the best the evolution of this sector, several studies are leaded since many years in order to understand the demand and its components and trying to make forecasting. The aim of this essay is to discuss about the process of tourism demand forecasting, and if it’s as important as the outcome. To achieve this goal, I will present first what is a demand forecasting and what are its components. Then, I will show why this forecasting is important and how it can be use. Finally, I will explain the difficulties in tourism demand forecasting and the consequences of poor forecasting.

• Forecasting definitions, objectives and component

➢ Definitions
Werner Heisenberg explained in its “Uncertainty Principle state” in 1927, that it is impossible to determine both momentum and position of a subatomic particle at the same time, only the probability of each. This Quantum Mechanics principle can be apply in every sector.
Forecasting is fundamentally the process of organizing information about a phenomenon’s past in order to predict the future. Applied to the tourism sector and following the Heisenberg’s principle, we can define the tourism demand forecasting as a “process designed to reduce the risks of tourism marketing and other management decisions through the use of forecasting” (UNWTO definition).

➢ Objectives
Tourism demand forecasting is a tool, it is use “to predict the