Forecasting Chinese Tourism Demand in Taiwan Using GM(1,1) Interval Prediction Model

Abstract

On July 18, 2008, Chinese tourists obtained official permits from the R.O.C. government to visit Taiwan. This policy was of historic significance, as it indicated that cross-strait relations had turned a new leaf after several turbulent decades. Due to limited data set, and changes on the economic, financial and political environment, information thus tends to be either sufficient or indefinite under such circumstances which grey theory can flexibly deal with the fuzziness situation in the current study. The main objective of this study is therefore to obtain more accurate forecasts of Chinese tourists by the GM(1,1) interval prediction model. This study lays the groundwork for future research in model building for the purpose of estimation, and the results offer useful insights for authorities, practitioners, and policymakers in the tourism industry.