Forecasting the Tourism Impact Through the 2008 Messinian Thruway - Simple Linear Regression, the Holt-Winters Method and Sensitization

The Holt-Winters Method is used to forecast the possible effect of the 2008 'Messinian Thruway' on international tourism demand, over a 21 years period (1991-2011). Analysis on the structure of historical tourism series suggests that the most appropriate variable to use is the number of international tourist arrivals (R2 = 0.75). Based on in-sample evaluations the Holt-Winters Method outperforms the double smoothing methods of forecasting. Using out-of sample evaluations, fixing the smoothing parameters to certain values (a=0.4 and γ = 0.1) outperforms the selection of parameters according to goodness of fit to past data. The forecasting results suggests that the 'Messinian Thruway' will have a significant impact ( R2 = 0.995) on international – and therefore, total- tourism demand for the period (2008-2011), due to sensitization process