Risk Management for International Tourist Arrivals: An Application to the Balearic Islands, Spain

Ana Bartolome, Michael McAleer, Vicente Ramos and Javier Rey-Maquieira
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Ana Bartolome: Faculty of Economics and Business, University of the Balearic Islands
Vicente Ramos: Faculty of Economics and Business, University of the Balearic Islands
Javier Rey-Maquieira: Faculty of Economics and Business, University of the Balearic Islands

No CIRJE-F-665, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: Spain is a leader in terms of total international tourist arrivals and receipts. The Balearic Islands are one of the most popular destinations in Spain. For tourism management and marketing, it is essential to forecast tourist arrivals accurately. As it is important to provide sensible tourist forecast intervals, it is also necessary to model their variances accurately. Time-varying variances also provide useful information regarding the risk associated with tourist arrivals. This paper examines spatial aggregation across micro entities to more aggregated macro entities, in addition to temporal aggregation, for purposes of analyzing risk in tourism marketing and management. The paper examines four different types of asymmetric behaviour related to the effects of positive and negative shocks of equal magnitude on volatility. The paper analyzes daily air passenger arrivals from the Spanish National Airport Authority from 2001-06 to the Balearics, using time series models for the conditional mean and conditional volatility.

New Economics Papers: this item is included in nep-tur
Date: 2009-09

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Persistent link: http://EconPapers.repec.org/RePEc:tky:fseres:2009cf665

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