Abstract
This study evaluates the accuracy of previously published econometric forecasts for seven lodging sector variables that measure hotel activity in El Paso, Texas. The hotel forecasts have been generated annually using an econometric model of the El Paso metropolitan economy from 2006 forward. Predictive accuracy is evaluated relative to random walk benchmarks. Assessment is completed using both descriptive forecast error summary statistics as well as formal statistical tests. The econometric model outperforms the random walk benchmarks for a majority of the variables analyzed. However, statistical tests of forecast error differentials do not yield conclusive evidence in favor of the econometric historical track record. Tests of directional forecast accuracy also produce mixed results. Although the structural econometric model of hotel business conditions appears to provide useful predictive information, analysts and planners should also monitor recent history closely.
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Acknowledgements
Financial support for this research was provided by El Paso Water, City of El Paso Office of Management & Budget, National Science Foundation Grant DRL-1740695, the UTEP Center for the Study of Western Hemispheric Trade, and the Hunt Institute for Global Competitiveness at UTEP. Econometric research assistance was provided by Ernesto Duarte, Patricia Arellano, and Omar Solis. Helpful comments and suggestions were provided by five anonymous referees.
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Walke, A.G., Fullerton Jr., T.M. Metropolitan Hotel Sector Forecast Accuracy in El Paso. Atl Econ J 47, 179–191 (2019). https://doi.org/10.1007/s11293-019-09620-x
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DOI: https://doi.org/10.1007/s11293-019-09620-x