Forecasting hotel room demand using search engine data

Purpose – The purpose of this paper is to investigate the usefulness of search query volume data in forecasting demand for hotel rooms and identify the best econometric forecasting model. Design/methodology/approach – The authors used search volume data on five related queries to predict demand for hotel rooms in a specific tourist city and employed three ARMA family models and their ARMAX counterparts to evaluate the usefulness of these data. The authors also evaluated three widely used causal econometric models – ADL, TVP, and VAR – for comparison. Findings – All three ARMAX models consistently outperformed their ARMA counterparts, validating the value of search volume data in facilitating the accurate prediction of demand for hotel rooms. When the three causal econometric models were included for forecasting competition, the ARX model produced the most accurate forecasts, suggesting its usefulness in forecasting demand for hotel rooms. Research limitations/implications – To demonstrate the usefulness of this data type, the authors focused on one tourist city with five specific tourist‐related queries. Future studies could focus on other aspects of tourist consumption and on more destinations, using a larger number of queries to increase accuracy. Practical implications – Search volume data are an early indicator of travelers' interest and could be used to predict various types of tourist consumption and activities, such as hotel occupancy, spending, and event attendance. Originality/value – The paper's findings validate the value of search query volume data in predicting hotel room demand, and the paper is the first of its kind in the field of tourism and hospitality research.