Tourism Demand in the Algarve Region: Evolution and Forecast using SVARMA models.

Tourism is one of the Portuguese economy's key sectors, and its relative weight has grown over recent years. The Algarve region is particularly focused on attracting foreign tourists and has built over the years a large offer of diversified hotel units. In this paper we present multivariate time series approach to forecast the number of overnight stays in hotel units (hotels, guesthouses or hostels, and tourist apartments) in Algarve. We adjust a seasonal vector autoregressive and moving averages model (SVARMA) to monthly data between 2006 and 2016. The forecast values were compared with the actual values of the overnight stays in Algarve in 2016 and led to a MAPE of 15.1% and RMSE= 53847.28. The MAPE for the Hotel series was merely 4.56%. These forecast values can be used by a hotel manager to predict their occupancy and to determine the best pricing policy. [ABSTRACT FROM AUTHOR]