Munich Personal RePEc Archive

An Analysis of the Impact of Low Cost Airlines on Tourist Stay Duration and Expenditures

Qiu, Wanling and Rudkin, Simon and Sharma, Abhijit (2017): An Analysis of the Impact of Low Cost Airlines on Tourist Stay Duration and Expenditures.

[img]
Preview
PDF
MPRA_paper_81428.pdf

Download (318kB) | Preview

Abstract

Low cost carriers (budget airlines) have a significant share of the air travel market, but little research has been done to understand the distributional effect of their operation on key tourism indicators such as length of stay and expenditure. Using data on European visitors to the United Kingdom we demonstrate how counterfactual decompositions can inform us of the true impact of mode of travel. Passengers on low cost carriers tend to spend less, particularly at the upper end of the distribution. Budget airline users typically stay longer, though differences in characteristics of observed groups are important to this result. Counterfactual techniques provide additional valuable insights not obtained from conventional econometric models used in the literature. Illustrating an application of the methodology to policy we demonstrate that enabling respondents to extend their stay generates the greatest additional expenditure at the lower end of the distribution. We also show nationality is a significant characteristic, with important impacts across the expenditure distribution.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.