Hospitality Management 22 (2003) 435–451 Discussion paper Modelling and forecasting the demand for Hong Kong tourism Haiyan Song a, *, Kevin K. F. Wong b , Kaye K.S. Chon b a School of Management, University of Surrey, Guildford GU2 7XH, UK b School of Hotel and Tourism Management, Hong Kong Polytechnic University, Hong Kong Abstract The main objectives of this paper are to identify the factors which contribute to the demand for Hong Kong tourism with the aid of econometric models and to generate forecasts of international tourism arrivals to Hong Kong for the period 2001–2008. The general -to-specific modelling approach is followed to model and forecast the demand for Hong Kong tourism by residents from the 16 major origin countries/regions and the empirical results reveal that the most important factors that determine the demand for Hong Kong tourism are the costs of tourism in Hong Kong, the economic condition (measured by the income level) in the origin countries/regions, the costs of tourism in the competing destinations and the ‘word of mouth’ effect. The demand elasticities and forecasts of tourism arrivals obtained from the demand models form the basis of policy formulations for the tourism industry in Hong Kong. r 2003 Elsevier Ltd. All rights reserved. Keywords: Tourism demand; Price elasticity; Econometric models; Forecasts 1. Introduction Known as the ‘City of Life’ and ‘Asia’s Most Popular Travel Destination’, Hong Kong has a unique culture that combines western life style with Chinese traditions. Cultural events, such as the heritage tour, dragon boat festival, and various food and arts festivals, have helped Hong Kong to build a favorable image overseas and attracted a large number of international visitors. ARTICLE IN PRESS *Corresponding author. Tel.: +44-1483-876353; fax: +44-1483-876301. E-mail addresses: h.song@surrey.ac.uk (H. Song), hmkevinw@polyu.edu.hk (K.K.F. Wong), hmkchon@polyu.edu.hk (K.K.S. Chon). 0278-4319/$-see front matter r 2003 Elsevier Ltd. All rights reserved. doi:10.1016/S0278-4319(03)00047-1