forecastingtotalhotelmotelroomrevenuesinasmall（24页）.doc

No Room at the Inn? Forecasting Hotel-Motel Revenues for a Local Area by James A. Kurre and Barry R. Weller School of Business Penn State University, Erie 5091 Station Road Erie, PA 16563-1400 (814) 898-6266 (814) 898-6326 k12@ brw@ Presented at the 22nd International Symposium on Forecasting Trinity College, Dublin Ireland June 23-26, 2002 Abstract This paper documents the creation of a model to forecast hotel-motel revenues for a small metropolitan area (Erie, Pennsylvania) in the northeastern United States. It discusses data problems facing an area with a new tax and no historical data series, explores several proxy variables, and focuses on one widely-available data source. The paper then examines several forecasting models to identify the most appropriate technique, evaluating the forecasts with a rolling simulation approach that examines forecasts at different horizons from different origins. Since many areas impose a hotel-motel tax, this project clearly has implications for local governments as well as for local accommodation industries.  No Room at the Inn? Forecasting Hotel-Motel Revenues for a Local Area 1. INTRODUCTION Like an increasing number of localities, Erie County, Pennsylvania recently enacted a hotel/motel room tax. The tax is five percent, and began in May of 2001. The tax applies to transient guests; it exempts permanent guests (those who have occupied a room for 30 consecutive days) and government employees on official business. Eighty percent of the tax revenues are used to support the operation and promotion of a convention center (not yet built) while the remaining twenty percent are devoted to general tourism promotion. Prior to implementation, government officials estimated that the tax will yield between $1.5 million and $1.8 million annually. County tourism planning and budgeting decisions require defensible revenue projections, projections which are both acceptably accura