Correspondence: Kevin Greenidge, Research Department, Central bank of Barbados, Tom Adams Financial Centre, Spry Street, Bridgetown, St Michael BB11000, Barbados. E-mail: kcgreenidge@centralbank.org.bb

¹is an economist in the Research Department at the Central Bank of Barbados. Her research interests include Tourism Economics and Applied Mircoeconometrics.

²is the deputy director of the Research Department at the Central Bank of Barbados. He is also a part time lecturer at the University of the West Indies, Cavehill Campus. He specialises in tourism modelling and forecasting.

Received 29 June 2009; Revised 29 June 2009; Published online 31 August 2009.

Abstract

This article builds on the work of Greenidge, employing structural time series model (STSM) to explain and forecast quarterly tourist flows from Barbados' primary source markets – the USA, the United Kingdom, Canada and CARICOM – for the period 1966:1–2007:4. Results show that the structure and nature of the individual time series components have evolved significantly since the work of Greenidge. Of particular interest, arrivals from the main source markets appear to be less income sensitive. The study also investigates the predictive power of STSM. A seasonal naïve model is used for benchmark comparison purposes. We find that STSM outperforms the seasonal naïve model in its both multivariate and univariate form.