Entropy Method for Decision-Making: Uncertainty Cycles in Tourism Demand

Abstract

A new methodology is presented for measuring, classifying and predicting the cycles of uncertainty that occur in temporary decision-making in the tourist accommodation market (apartments and hotels). Special attention is paid to the role of entropy and cycles in the process under the Adaptive Markets Hypothesis. The work scheme analyses random cycles from time to time, and in the frequency domain, the linear and nonlinear causality relationships between variables are studied. The period analysed is from January 2005 to December 2018; the following empirical results stand out: (1) On longer scales, the periodicity of the uncertainty of decision-making is between 6 and 12 months, respectively, for all the nationalities described. (2) The elasticity of demand for tourist apartments is approximately 1% due to changes in demand for tourist hotels. (3) The elasticity of the uncertainty factor is highly correlated with the country of origin of tourists visiting Spain. For example, it has been empirically shown that increases of 1% in uncertainty cause increases in the demand for apartments of 2.12% (worldwide), 3.05% (UK), 1.91% (Germany), 1.78% (France), 7.21% (Ireland), 3.61% (The Netherlands) respectively. This modelling has an explanatory capacity of 99% in all the models analysed.

Measuring Convergence in Tourism Competitiveness of Natural and Cultural Resources: A Case of the Balkans and Eastern Europe

“…Recently, special attention has been paid to the role of entropy in tourism markets (Gu et al, 2019;Ruiz Reina, 2021;Liu et al, 2022), especially since information entropy provides greater accuracy and superior objectivity, which leads to a more comprehensive interpretation of the results (Teixeira et al, 2021). Bearing that in mind, this paper applies the just mentioned concept of entropy to measure the equality of natural and cultural resources in the context of tourism competitiveness.…”

Hotel demand forecasting: a comprehensive literature review

“…Existing studies rarely included influencing factors as explanatory variables in econometric models to achieve forecasts. Moreover, because such factors cannot generally affect scenario demand Ruiz Reina (2021), existing econometric models are unsuitable for the hotel domain. Considering the strong practical relevance of hotel-level forecasting, future research can be devoted to identifying influencing factors and quantifying their relationships.…”