1. Model development
To be able to predict the number of Vietnamese tourists, we need a model. So we started with the theory of demand. There are two main factors that should determine the demand: price and income. The price factor could be reflected by Exchange rate. Exchange rate is price for which the currency of a country can be exchange for another country’s currency. Change in exchange rate affect the perceived price and value for money immediately. For income, GDP is a good measure. The gross domestic product (GDP) is one of the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period. Lastly traveling to one country, we shall consider the current social and political situation there. In Thailand the coup d’état may also affect the number of Vietnamese tourists. We naively don’t have a clue if Lung Too will attract more or less. But we think it is interesting to include this factor into the model too. The model can be illustrated as in the figure below.