Long-Haul Flights and Tourist Arrivals

Abstract:     
Travel cost is a barrier for many tourists who wish to visit faraway destinations. This affects exotic tourism destinations located far from key markets, since the great majority of travelers from these markets will find travel cost prohibitively high. However, exotic tourism destinations might attract more visitors if they are able to improve international air connectivity. The objective of this study is to test whether an increase in the number of long-haul flights has positive impacts on the number of tourist arrivals. We estimate a dynamic demand model using panel data of tourist arrivals to Peru and flight connections from 75 origin countries spanning the years 2004 to 2009, and find significant positive direct and indirect effects on demand for air travel to Peru of nonstop long-haul flights.

Number of Pages in PDF File: 31

Keywords: Air travel demand, nonstop flights, tourism arrivals, Peru

JEL Classification: L83, R41

working papers series