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 it 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 market access through improved 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 of long haul flights on demand for air travel to Peru.