Online searches can help countries predict tourist visits more accurately and give governments a better read on economies that depend on the industry, an International Monetary Fund analysis showed.
Combining Google Trends data with traditional forecast models improved accuracy of predicted tourist arrivals to the Bahamas from the US by about 30%, according to a working paper by IMF senior economist Serhan Cevik released on Jan 31.
"As tourism is the main engine of economic growth in the Bahamas, accurate forecasting of tourist arrivals is critical for informed decision-making by policy makers and businesses,” Cevik wrote, adding that the findings, consistent with previous studies, indicate search data can aid real-time surveillance and sharpen forecasts. Search data can help the industry better plan and invest, he said.
Improving estimates would help tourism-dependent economies like those across the Caribbean, where the industry employs millions and generates billions of dollars in exports, Cevik wrote. The Bahamas is "extremely dependent on fast-growing tourism”, which contributes about 48% of gross domestic product and 56% of employment, he said.
The study tracked Google queries from January 2004 to December 2018 for search terms including Bahamas in combination with words like travel, beach, hotels, resorts and flights.
Tourist arrivals to the Bahamas rose 9.8% over a decade to more than 6.5 million visits in 2018, with about four-fifths of those coming from the US. That already outsize role is poised to expand even further. The World Travel and Tourism Council projects tourism’s share of of GDP could reach 60% by 2030, and 70% of the workforce, according to the paper. That large footprint makes better forecasting all that much more critical for policy makers, Cevik said.
"While the tourism sector makes a significant contribution to the economy, it is also a major source of volatility due to greater exposure to external factors,” Cevik wrote. "Therefore, improving the prediction of tourist arrivals is important for forecasting overall economic growth as well as for effective planning and budgeting by the government and the private sector.” – Bloomberg
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