Low cost airlines and international tourism demand. The case of Porto's airport in the northwest of the Iberian Peninsula

It is widely argued that low-cost carriers (LCCs) lead to an increase in tourism demand. However, there is no conclusive evidence when the airport is located in a region with large diaspora and outbound tourism. To gain insight into the relationship between LCCs and international tourism demand, we...

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Bibliographic Details
Published inJournal of air transport management Vol. 79; p. 101689
Main Authors Álvarez-Díaz, Marcos, González-Gómez, Manuel, Otero-Giráldez, María Soledad
Format Journal Article
LanguageEnglish
Published Elsevier Ltd 01.08.2019
Subjects
Cointegration
Elasticity
Euroregion Galicia-North Portugal
International inbound tourism
Low cost carriers
Elasticity
International inbound tourism
Low cost carriers
Cointegration
Euroregion Galicia-North Portugal
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Summary:It is widely argued that low-cost carriers (LCCs) lead to an increase in tourism demand. However, there is no conclusive evidence when the airport is located in a region with large diaspora and outbound tourism. To gain insight into the relationship between LCCs and international tourism demand, we analyse whether a causal relationship exists between the number of international LCC passengers at the Porto airport and international tourism demand in the Galicia-North Portugal Euroregion using a vector autoregressive model. We evaluate the dynamics of the impacts of the LCC international passengers on international inbound tourism demand in a tourism demand model framework. The main findings are that the number of LCC international passengers has a positive influence on the number of nights spent by international guests in hotels and similar establishments and that the calculated monthly average injection of money into the economy is between 3 and 4.1 million € for North Portugal and between 1.4 and 2 million € for Galicia (Spain). •Quantification of effects of low cost airlines on international inbound tourism demand.•Cointegration analysis and tourism demand model framework.•Elasticities and their confidence interval are estimated for explanatory factors.•Injections into the circular flow of income.•Neighbouring regions with large diaspora and non international tourist destinations.
ISSN:0969-6997
1873-2089
DOI:10.1016/j.jairtraman.2019.101689