Seminario tides - low cost

The relationship between tourism
expenditure in origin and destination:
The Case of LCCs
Juan Luis Eugenio Martín
Federico Inchausti Sintes

Seminario Tides, 19th October 2012

Exordium
Model and Data
Results
Conclusion

Exordium: LCCs

What is a Low cost carrier (LCC)?

According to the CAA (2006):

-High density seating

-Single aircraft type

-Fast turnaround times

-Reduce cost to offer lower tickets prices

Exordium: questions

- Have LCCs increased the flow of tourism?
- CAA(2006), Young and Whang(2011), Graham and Dennis(2010),
Rey et al.(2011) and Davison and Ryley(2010).

- Have they promoted economic growth in the
region where they travel?
- Young and Whang(2011), Pulina and Cortés-Jimenez(2010), Vera
and Ivars(2009) and Castillo-Manzano et al.(2011)

Exordium: questions

- Do LCC passengers have a different
behavior in regard to traditional carrier
passengers?
- Young and Whang(2011), Graham and Dennis(2010), Pulina and
Cortés-Jimenez(2010).

- Do LCC passengers spend more money at
destination?

Exordium: LCCs in Canary Islands
- “(…)Si no lo hacen, no tendremos más remedio que cancelar
todos los vuelos en Fuerteventura a partir del próximo 31 de
enero", advirtió el ejecutivo, quien recordó que Ryanair genera
"enormes ingresos" gracias a los más de "250.000 pasajeros"
que viajan cada año a la isla con Ryanair.” Michael Cawley,
vicepresidente de Ryanair (La Provincia, 19/11/2008)

-“El cabildo de Gran Canaria ha adelantado que cerrará pronto
acuerdos con Easyjet para que esta aerolínea (……) ‘debute’
para enlazar Gran Canaria con Suiza.” (residentecanario.com,
30/09/2012)

- “El perfil del turista que utiliza las compañías de bajo coste no
sólo quiere ahorrar en el billete sino en todo el gasto de sus
vacaciones” (Rafael Gallego, presidente de la FEAVV, en Canarias7,
16/01/2011)

- “La hipótesis que más fuerza está cobrando es que las personas
que viajan en low cost tratan de ahorrarse en el billete del avión lo
que luego se gastan en el destino.” Miembro del ejecutivo canario,
(Canarias7, 05/02/2011)

Tourists Arrivals to Canary Islands


Where do they stay in Canary Islands?

LCC travellers distribution (%)

5 stars 4 stars 3,2 or 1 Apartment Family or Other Total
star friends

Only flight (F)
0,52 1,41 1,37 4,16 9,38 2,15 18,99
(F) + Accommodation
(A) 0,6 3,26 4,29 24,29 0 2,03 34,47

(F+A) + Breakfast (B)
1,72 2,39 1,06 1,04 0 0,07 6,27

(F+A)+Half Board
(HB) 1,57 8,78 2,64 1,83 0 0,09 14,91

(F+A+HB)+Dinner
(D) 0,26 1,51 1 0,68 0 0,1 3,54

(F+A)+ All Inclusive
0,87 10,98 5,01 4,72 0 0,24 21,82
Total
5,54 28,33 15,37 36,72 9,38 4,68 100

Non LCC travellers distribution (%)

5 stars 4 stars 3,2 or 1 star Apartment Family or Other Total
friends

Only flight (F)
0,34 1,01 0,66 1,6 4,1 0,88 8,58
(F) + Accommodation
(A) 0,39 3,03 2,94 14,61 0 0,98 21,95

1,51 2,77 1,42 1,28 0 0,01 6,98
(F+A)+Half Board
(HB) 3,09 18,57 4,55 2,27 0 0,06 28,55

(F+A+HB)+Dinner
(D) 0,41 2,37 0,98 0,34 0 0,23 4,33

0,97 18,92 6,82 2,6 0 0,3 29,61
Total
6,7 46,68 17,36 22,7 4,1 2,46 100

LCC- Non LCC travellers distribution differences (%)

5 stars 4 stars 3,2 or 1 star Apartment Family or Other Total
friends

Only flight (F)
0,18 0,40 0,71 2,56 5,28 1,27 10,41
(F) + Accommodation
(A)
0,21 0,23 1,35 9,68 0,00 1,05 12,52
0,21 -0,38 -0,36 -0,24 0,00 0,06 -0,71
(F+A)+Half Board
(HB)
-1,52 -9,79 -1,91 -0,44 0,00 0,03 -13,64
(F+A+HB)+Dinner
(D)
-0,15 -0,86 0,02 0,34 0,00 -0,13 -0,79
-0,10 -7,94 -1,81 2,12 0,00 -0,06 -7,79
Total
-1,16 -18,35 -1,99 14,02 5,28 2,22 0,00


How many days do they remain on the
islands?

LCC travelers mean nights
5 stars 4 stars 3,2 or 1 Apartment Family or Other
star friends

Only flight (F) 6,69 8,91 7,63 12,20 12,42 10,66
(F) +
Accommodation (A)
7,20 7,85 8,44 9,49 10,16

(F+A) + Breakfast
(B) 6,51 6,96 6,75 7,82 9,42

(F+A)+Half Board
(HB) 7,71 8,23 8,51 8,63 9,22

(F+A+HB)+Dinner
(D) 7,10 7,62 8,82 10,12 8,98

7,23 7,94 8,26 8,71 9,73

NLCC travelers mean nights
5 stars 4 stars 3,2 or 1 star Apartment Family or Other
friends

Only flight (F) 6,74 8,29 9,36 16,49 14,20 11,32
(F) + Accommodation
(A)
7,28 9,00 9,89 10,87 11,36

7,58 7,77 8,39 9,35 8,00

(F+A)+Half Board
(HB) 8,49 9,16 9,27 9,94 10,54

(F+A+HB)+Dinner
(D) 7,57 8,55 8,37 10,00 7,78

8,42 8,80 9,13 9,65 8,35

LCC-NonLCC travelers mean nights differences
star friends

Only flight (F) -0,04 0,62 -1,72 -4,29 -1,78 -0,66
(F) +
Accommodation (A)
-0,08 -1,15 -1,46 -1,39 0,00 -1,20

(F+A) + Breakfast
(B) -1,07 -0,81 -1,64 -1,53 0,00 1,42

(F+A)+Half Board
(HB) -0,78 -0,94 -0,76 -1,32 0,00 -1,32

(F+A+HB)+Dinner
(D) -0,46 -0,93 0,45 0,12 0,00 1,20

-1,19 -0,86 -0,86 -0,95 0,00 1,38


What is the travel party size?

Mean Party size (no differences between LCC and nonLCCS travelers)
star friends

Only flight (F) 2,26 2,11 1,83 2,11 1,84 2,37
(F) +
Accommodation (A)
2,53 2,39 2,37 2,44 2,60

(F+A) + Breakfast
(B) 2,21 2,18 2,08 2,43 2,08

(F+A)+Half Board
(HB) 2,36 2,20 2,09 2,36 1,95

(F+A+HB)+Dinner
(D) 2,52 2,32 2,24 2,44 2,13

2,56 2,43 2,46 2,80 2,15

Model: definition variables
Endogenous variables: definition
exporigin Expenditure in origin per person and night
expisland Expenditure in destination per person and night
Exogenous variables: definition
income Annual income divided by 12 months
term Trimester
year Year
destination Island visited: La Palma, El hierro, Tenerife, Gran Canaria,
Fuerteventura and Lanzarote

party lower than 2 years, between 2 and 12, between 13 and 65
years, older than 65 years

people Alone, with couple, with family, friends and relative or
coworkers

motivation Main reason to travel to Canary Islands: sun and beach,
cultural, landscape, prices, safety, etc

previous visits From 1 to more than 10 times

Model: variables definition
Exogenous variables: definition
p Package: flight, flight + accommodation,

Flight + accommodation + Breakfast,

flight + accommodation + half board,

flight + accommodation + all inclusive.

a Category of accommodation: Hotel 5*, Hotel 4*, Hotel
3*, Apartments, Households (friends, family), Others
(timesharing, rural housing)

pa Multiplicative variable between package and category of
accommodation

pal pa multiply by lowcost (1 if the passenger travels in
lowcost and 0 the others cases)

Model: simultaneous equations
4 2011 31 31
exporigini = β1expdestinationi + β 2incomei + ∑ β 3t termit + ∑ β 4 y yeariy + ∑ β 5 h paih + ∑ β 6 h palih
Expenditure t =1 y = 2009 h =1 h =1
in 7 4 5
origin + ∑ β 7 d destinationid + ∑ β 8 r partyir + ∑ β 9 o peopleio + β11 previousi + ui
d =1 r =1 o =1

4 31 31
expdestinationi = γ 1exporigini + γ 2incomei + ∑ γ 3t termit + ∑ γ 5 h paih + ∑ γ 6 h palih
Expenditure t =1 h =1 h =1

in destination 7 4 5 16
+ ∑ γ 7 d destinationid + ∑ γ 8 r partyir + ∑ γ 9 o peopleio + ∑ γ 10 m motivationim + γ 11 previousi + ei
d =1 r =1 o =1 m =1

Model: effect of pa and pal
Figure 1a: decrease in consumption of LCCs Figure 1b: increase in consumption of LCCs
tourists with respect to non-LCCs tourists tourists respect to non-LCCs tourists

Model: simultaneous equations
4 2011 31 31
exporigini = β1expdestinationi + β 2incomei + ∑ β 3t termit + ∑ β 4 y yeariy + ∑ β 5 h paih + ∑ β 6 h palih
Expenditure t =1 y = 2009 h =1 h =1
in 7 4 5
origin + ∑ β 7 d destinationid + ∑ β 8 r partyir + ∑ β 9 o peopleio + β11 previousi + ui Contemporary
d =1 r =1 o =1 Correlations
Endogenity among errors
4 31 31
expdestinationi = γ 1exporigini + γ 2incomei + ∑ γ 3t termit + ∑ γ 5 h paih + ∑ γ 6 h palih
Expenditure t =1 h =1 h =1

in destination 7 4 5 16
+ ∑ γ 7 d destinationid + ∑ γ 8 r partyir + ∑ γ 9 o peopleio + ∑ γ 10 m motivationim + γ 11 previousi + ei
d =1 r =1 o =1 m =1

Model: assumptions

Var (ui ) = σ 2 Var (ui u j ) = 0 Homokedasticity in
both equations
Var (ei ) = σ 2 Var (ei e j ) = 0
Contemporary correlations error between
E (ui ei ) = σ i both equations

E (ui xi ) = 0
Exogenous explanatory
E (ei xi ) = 0 variables in both equations

E (ui expdestinationi ) ≠ 0
endogeneity
E (ei exporigini ) ≠ 0

Model: estimation methods
Indirect ordinary Least square (IOLS)
Limited
endogeneity Instrumental variables
information
Two-step least squares (2SLS)
Three-Step
Least
Squares
Simultaneous (3SLS)
equations
context

Contemporary Seemingly unrelated equations Complete
correlation (SUR) information
among errors

Model: estimation problems

Does the model has
heteroskedasticity?

Does 3SLS deal with it?

Model: estimation methods

Any of the previous estimators are a particular case
of the GMM.

Thus, GMM deals with endogeneity and/or error
correlations .
Generalized method of
moment (GMM)
And, it permits Robust residual covariance matrix
ˆ
estimation ( ∑ ) (it deal with heterokedasticity) .

ˆ
∑ is not always positive-semidefinite.

Model: Estimation methods
1º -3SLS estimation
Robust residual covariance 2º -GMM (3SLS robust) Misspecification
GMM(3SLS robust) matrix is not achieved. estimation without the non vs
significant variables in step efficiency gain
1º.
Some element of the
ˆ
main diagonal of ∑
may be negative.
Estimation
method There are not certainty that the non
ˆ 1
S=
N
∑ u i2zi zi′
ˆ significant variables in step 1º would not be
i significant in step 2º!!!

Good
specification
3SLS vs
Efficiency lost

Results

Do LCCs travelers spend more money in
destination?

3SLS Regression :

Equation 1 ( origin) Equation 2 (destination)

Parameter Std. desv Parameter Std. desv

exporigin - - 0.182*** (0.068)

expisland 0.585*** (0.050) - -

Income 0.002*** (0.000) 0.001*** (0.000)

Trime2 -3.379*** (0.434) 1.421*** (0.364)

Trime3 -3.807*** (0.498) 1.122*** (0.418)

Trime4 -2.830*** (0.476) 1.078*** (0.375)

Year 2010 3.322*** (0.360) - -

Year 2011 3.015*** (0.442) - -

Germany -5.854*** (1.655) -11.063*** (1.453)

Austria 8.264*** (2.141) -9.813*** (1.507)

Belgium 2.926 (1.825) -6.408*** (1.295)

Denmark 3.651** (1.847) -9.607*** (1.287)

Spain -12.961*** (1.485) 2.920** (1.398)

Finland 2.921 (1.864) -10.471*** (1.299)

France 0.611 (1.870) -6.430*** (1.330)

The Netherlands -6.554*** (1.735) -9.525*** (1.496)

Ireland -21.804*** (1.670) 7.710*** (1.732)

Italy -2.706 (1.954) -1.754 (1.430)

Norway -5.809*** (1.733) -1.842 (1.361)

Poland -12.047*** (2.241) -0.266 (1.855)

Portugal -12.064*** (2.569) -2.097 (2.075)

United Kingdom -14.945*** (1.581) -6.932*** (1.772)

Czech Republic -1.369 (2.952) -11.989*** (2.189)

Russia -9.452*** (2.836) 19.822*** (1.917)

Sweden 2.931 (1.802) -12.080*** (1.247)

Switzerland 9.407*** (1.958) -8.523*** (1.420)

Luxemburg 16.346*** (3.792) -8.791*** (2.851)

3SLS Regression :
Equation 1 (origin) Equation 2 (destination)
Parameter Std. desv Parameter Std. desv
Lanzarote 0.337*** (0.095) -0.315*** (0.070)
Fuerteventura -0.014 (0.102) 0.210*** (0.075)
Gran Canaria -0.505*** (0.101) -0.489*** (0.090)
Tenerife 0.318*** (0.102) -0.762*** (0.066)
La Gomera -0.146 (0.183) -0.196 (0.133)
La Palma -0.900*** (0.152) 0.769*** (0.112)
El Hierro 0.187 (0.589) 0.368 (0.426)
Lower than 2 years -9.590*** (1.018) -7.047*** (1.244)
2 and 12 years -2.203*** (0.425) -5.113*** (0.463)
13 and 65 years 1.109*** (0.336) -4.725*** (0.201)
Older than 65 years 0.599 (0.560) -7.466*** (0.418)
Couple -10.341*** (0.501) 0.202 (0.823)
Family -1.947*** (0.632) 1.201*** (0.464)
Friends -10.488*** (0.620) 2.227*** (0.760)
Coworkers 20.195*** (1.980) 3.939* (2.026)
Climate - - -3.066*** (0.621)
Beaches - - -1.702*** (0.404)
Landscape - - -1.345*** (0.375)
Environmental quality - - -0.931* (0.507)
quietness - - -2.067*** (0.283)
Active tourism - - -4.173*** (0.606)
Helth tourism - - 2.825** (1.116)
Theme park - - 1.643** (0.765)
Golf - - 9.846*** (1.014)
Other sports - - -1.840* (1.023)
Nightlife - - 4.274*** (0.633)
Shopping - - 5.169*** (0.628)
New place - - -1.311*** (0.454)
Ease of Traveling - - -2.916*** (0.409)
Price -4.663*** (0.888)
For Kids -1.893*** (0.529)
Previous visits -0.044*** (0.006) 0.021*** (0.005)

Observations 53608 53608
R2 0.842 0.718
Chi2 2.89e+05 1.37e+05

pa variables pal variables
Equation 1 (origin) Equation 2 (destination) Equation 1 (origin) Equation 2 (destination)
parameter Std. desv. parameter Std. desv. parameter Std. desv. parameter Std. desv.

(Flight(F))-5 stars -7.606 (8.862) 130.161*** (6.950) (Flight(F))-5 stars 1.156 (5.086) -11.154*** (3.652)

hotel hotel-LCC

(Flight(F))-4 stars 14.800** (6.825) 90.253*** (6.651) (Flight(F))-4 stars -1.386 (3.192) -12.686*** (2.316)

hotel hotel- LCC

(Flight(F))-3 stars 17.171*** (6.458) 73.906*** (6.276) (Flight(F))-3 stars 3.858 (3.731) -8.354*** (2.664)

hotel hotel- LCC

(Flight(F))-apartment 16.103*** (5.680) 65.531*** (5.709) (Flight(F))- -2.086 (1.908) -1.446 (1.379)
apartment- LCC

(Flight(F))-friends 25.071*** (4.992) 44.614*** (5.398) (Flight(F))-friends -4.040*** (1.239) 2.127** (0.907)

and family and family- LCC
(Flight(F))-other- LCC -4.443* (2.559) 1.667 (1.850)
(Flight(F))-other 27.826*** (5.406) 49.915*** (5.872)

(F+Accommodation( 102.242*** (7.306) 72.965*** (12.194) (F+Accommodation( -0.897 (5.161) -16.616*** (3.726)

A))-5 stars hotel A))-5 stars hotel- LCC

(F+Accommodation( 75.679*** (5.402) 47.179*** (9.028) (F+Accommodation( -8.813*** (2.112) 0.878 (1.623)
A))-4 stars hotel A))-4 stars hotel- LCC

(F+Accommodation( 56.268*** (5.353) 49.695*** (7.786)
(F+Accommodation( -9.360*** (1.782) 2.416* (1.380)
A))-3 stars hotel
A))-3 stars hotel- LCC

(F+Accommodation( 53.837*** (5.216) 48.885*** (7.576)
(F+Accommodation( -7.815*** (0.721) 1.704** (0.690)
A))-apartment
A))-apartment- LCC
(F+Accommodation( 51.411*** (5.431) 46.114*** (7.297)
(F+Accommodation( -3.971 (2.607) 1.119 (1.888)
A))-other
A))-other- LCC
(F+A+Breakfast(B))-5 114.416*** (6.140) 57.306*** (12.255) (F+A+Breakfast(B))-5 -10.057*** (2.732) 2.299 (2.054)
stars hotel stars hotel- LCC
(F+A+ Breakfast(B))- -10.735*** (2.151) 1.717 (1.701)
(F+A+ Breakfast(B))- 89.794*** (5.544) 49.033*** (10.086)
4 stars hotel- LCC
4 stars hotel

(F+A+ Breakfast(B))- 70.638*** (5.504) 47.437*** (8.704) (F+A+ Breakfast(B))- -6.020* (3.226) 5.539** (2.318)
3 stars hotel 3 stars hotel- LCC

(F+A+ Breakfast(B))- 66.021*** (5.388) 46.611*** (8.391) (F+A+ Breakfast(B))- -10.409*** (2.749) -0.433 (2.117)
apartment apartment- LCC

(F+A+ Breakfast(B))- 83.573*** (13.895) 30.455** (12.910)
(F+A+ Breakfast(B))- -24.301 (16.176) 24.828** (11.634)
other
other- LCC

pa variables pal variables
Equation 1 (origin) Equation 2 (destination) Equation 1 (origin) Equation 2 (destination)
parameter Std. desv. parameter Std. desv. parameter Std. desv. parameter Std. desv.

(F+A+half -9.156*** (2.639) 1.914 (1.981)
(F+A+half 127.901*** (5.373) 35.821*** (12.315)
board(HB))-5 stars
board(HB))-5 stars
hotel- LCC
hotel
(F+A+ half -8.990*** (1.085) 3.986*** (0.909)
(F+A+ half 90.219*** (5.014) 35.368*** (9.572)
board(HB))-4 stars
board(HB))-4 stars
hotel- LCC
hotel
(F+A+ half -2.623 (2.001) 0.427 (1.444)
(F+A+ half 71.111*** (5.075) 38.490*** (8.404)
board(HB))-3 stars
board(HB))-3 stars
hotel- LCC
hotel
(F+A+ half -9.585*** (2.265) 5.225*** (1.681)
(F+A+ half 72.649*** (5.097) 37.799*** (8.478)
board(HB))-
board(HB))-
apartment- LCC
apartment
(F+A+ half -3.286 (11.397) -8.374 (8.212)
(F+A+ half 77.778*** (9.290) 38.801*** (10.334)
board(HB))-other-
board(HB))-other
LCC
(F+A+HB+Dinner(D)) 129.789*** (5.914) 29.751** (12.363)
(F+A+HB+Dinner(D))- -14.699** (7.224) 10.954** (5.222)
-5 stars hotel
5 stars hotel- LCC
(F+A+HB+Dinner(D)) 92.318*** (5.056) 31.847*** (9.567)
(F+A+HB+Dinner(D))- -3.556 (2.693) -0.034 (1.953)
-4 stars hotel
4 stars hotel- LCC
(F+A+HB+Dinner(D)) 80.284*** (5.354) 33.219*** (8.897)
(F+A+HB+Dinner(D))- -2.614 (4.199) -0.471 (3.028)
-3 stars hotel
3 stars hotel- LCC
(F+A+HB+Dinner(D)) 71.242*** (5.676) 34.092*** (8.427)
(F+A+HB+Dinner(D))- -4.008 (4.300) 7.506** (3.083)
-apartment
apartment- LCC
(F+A+HB+Dinner(D)) 129.932*** (5.687) 22.668* (12.160)
(F+A+HB+Dinner(D))- -8.843 (7.152) 5.843 (5.171)
-other
other- LCC
(F+A+All inclusive)-5 125.542*** (5.194) 21.548* (11.597)
(F+A+All inclusive)-5 -10.666*** (3.727) 0.679 (2.770)
stars hotel
stars hotel- LCC
(F+A+ All inclusive)-4 99.646*** (4.724) 22.534** (9.727)
(F+A+ All inclusive)-4 -8.748*** (1.036) 3.123*** (0.873)
stars hotel
stars hotel- LCC
(F+A+ All inclusive)-3 89.705*** (4.792) 25.560*** 9.171)
(F+A+ All inclusive)-3 -13.828*** (1.557) 4.150*** (1.370)
stars hotel
stars hotel- LCC
(F+A+ All inclusive)- 82.958*** (4.923) 29.942*** (8.891)
(F+A+ All inclusive)- -14.490*** (1.773) 5.059*** (1.491)
apartment
apartment- LCC
(F+A+ All inclusive)- 136.551*** (5.551) 14.949 (12.291)
(F+A+ All inclusive)- -20.593*** (5.716) 7.985* (4.276)
other
other- LCC

Results: reduced form 4
exporigini = [( β1γ 2 + β 2 ) / (1 − β1γ 1 )]incomei + ∑ [( β1γ 3t + β 3t ) / (1 − β1γ 1 )]termit
t =1
2011 31
+ ∑ [(β 1
+ β 4 y ) / (1 − β1γ 1 )] yeariy + ∑ [( β1γ 5 h + β 5 h ) / (1 − β1γ 1 )] paih
y = 2009 h =1

31 7
+ ∑ [( β1γ 6 h + β 6 h ) / (1 − β1γ 1 )] palih + ∑ [( β1γ 7 d + β 7 d ) / (1 − β1γ 1 )]destinationid
h =1 d =1
4 5
+ ∑ [( β1γ 8 r + β8 r ) / (1 − β1γ 1 )] partyir + ∑ [( β1γ 9 r + β 9 r ) / (1 − β1γ 1 )] peopleio
r =1 o =1
16
+ ∑ [ β1γ 10 m / (1 − β1γ 1 )]motivationim + [( β1γ 11 + β11 ) / (1 − β11γ 1 )] previousi
m =1

+[ β11 / (1 − β11γ 21 )]ei + [1/ (1 − β11γ 21 )]ui

4
expisland i = [(γ 1 β 2 + γ 2 ) / (1 − β1γ 1 )]incomei + ∑ [(γ 1 β 3t + γ 3t ) / (1 − β1γ 1 )]termit
t =1
2011 31
+ ∑ [(γ β 1 4y
) / (1 − β1γ 1 )] yeariy + ∑ [(γ 1β 5 h + γ 5 h ) / (1 − β1γ 1 )] paih
y = 2009 h =1

31 7
+ ∑ [(γ 1β 6 h + γ 6 h ) / (1 − β1γ 1 )] palih + ∑ [(γ 1 β 7 d + γ 7 d ) / (1 − β1γ 1 )]destinationid
h =1 d =1
4 5
+ ∑ [(γ 1β 8 r + γ 8 r ) / (1 − β1γ 1 )] partyir + ∑ [(γ 1β 9 r + γ 9 r ) / (1 − β1γ 1 )] peopleio
r =1 o =1
16
+ ∑ [γ 10 m / (1 − β1γ 1 )]motivationim + [(γ 1β11 + γ 11 ) / (1 − β1γ 1 )]vecesi
m =1

+[γ 1 / (1 − β1γ 1 )]ui + [1 / (1 − β1γ 1 )]ei

Results: origin
Non-LCC: euros per person and night
3,2 or 1 Family or
5 stars 4 stars Apartment Other
stars friends
Only flight (F) 76,69 75,63 67,59 60,91 57,25 63,81
(F) + Accommodation
162,16 115,56 95,48 92,23 87,71
(A)

(F+A) + Breakfast (B) 165,53 132,56 110,08 104,38 113,44

(F+A)+Half Board
166,55 124,09 104,76 106,03 112,42
(HB)

(F+A+HB)+Dinner
164,69 124,14 111,57 102,03 160,22
(D)
(F+A)+ All Inclusive 154,57 126,24 117,10 112,42 162,57

Results: origin
LCC: euros per person and night with respect to non-LCC
3,2 or 1 Family or
stars friends
Only flight (F) -6,01 -9,85 -1,15 -3,28 -3,13 -3,88
(F) + Accommodation
-11,88 -9,29 -8,89 -7,63 -3,71
(A)

(F+A) + Breakfast (B) -9,75 -10,89 -3,11 -11,93 -10,94

(F+A)+Half Board
-8,99 -7,45 -2,66 -7,30 -9,16
(HB)

(F+A+HB)+Dinner
-9,28 -4,00 -3,23 0,43 -6,07
(D)
(F+A)+ All Inclusive 11,49 -7,74 -12,76 -12,90 -17,81

Results: destination
Non-LCC: euros per person and night
3,2 or 1 Family or
stars friends
Only flight (F) 144,09 103,99 86,18 76,59 55,01 61,50
(F) + Accommodation
102,42 68,17 67,04 65,64 62,04
(A)

(F+A) + Breakfast (B) 87,37 73,11 67,43 65,57 51,06

(F+A)+Half Board
66,07 57,91 57,52 57,06 59,22
(HB)

(F+A+HB)+Dinner
59,66 54,39 53,48 52,62 51,77
(D)
(F+A)+ All Inclusive 49,62 45,46 46,83 50,36 44,48

LCC: euros per person and nights with respect to non-LCC
3,2 or 1 Family or
stars friends
Only flight (F) -12,24 -14,48 -8,56 -2,04 1,56 0,96
(F) + Accommodation
-18,77 -0,81 0,80 0,32 0,45
(A)

(F+A) + Breakfast (B) 0,53 -0,26 4,97 -2,60 22,84

(F+A)+Half Board
0,28 2,63 -0,06 3,90 -10,04
(HB)

(F+A+HB)+Dinner
9,27 -0,76 -1,06 7,58 4,74
(D)
(F+A)+ All Inclusive -1,41 1,72 1,83 2,72 4,75

Results: origin
LCC: euros by mean nights and mean party size (with respect to non-LCC)
3,2 or 1 Family or
stars friends
Only flight (F) -92,36 -187,05 -16,46 -84,81 -70,97 -99,72
(F) + Accommodation
-196,67 -167,03 -173,60 -179,97 0,00 -106,30
(A)

(F+A) + Breakfast (B) -145,82 -159,24 -40,22 -208,11 0,00 -195,27

(F+A)+Half Board
-169,31 -136,13 -47,31 -146,99 0,00 -168,91
(HB)

(F+A+HB)+Dinner
-138,67 -66,16 -54,47 9,38 0,00 -112,71
(D)
(F+A)+ All Inclusive 202,91 -152,33 -248,29 -285,26 0,00 -362,25

LCC: euros by mean nights and mean party size (with respect to non-LCC)
3,2 or 1 Family or
stars friends
Only flight (F) -188,27 -274,78 -122,36 -52,78 35,38 24,74
(F) + Accommodation
-310,80 -14,54 15,64 7,52 0,00 12,76
(A)

(F+A) + Breakfast (B) 7,91 -3,81 64,31 -45,35 0,00 407,73

(F+A)+Half Board
5,30 48,11 -0,99 78,45 0,00 -185,13
(HB)

(F+A+HB)+Dinner
138,56 -12,58 -17,83 165,83 0,00 88,01
(D)
(F+A)+ All Inclusive -24,86 33,78 35,68 60,04 0,00 96,59

Results: total
 31 
post-LCC in origin: nshr *  ∑ [( β1γ 5 h + β 5 h ) / (1 − β1γ 1 )]* pa h * q h * sz h + [( β1γ 2 + β 2 ) / (1 − β1γ 1 )]* income nlc  +
 h =1 
 31

shr *  ∑ ( [( β1γ 6 h + β 6 h ) / (1 − β1γ 1 )] + [( β1γ 5 h + β5 h ) / (1 − β1γ 1 )]) * palh * q h * sz h + [( β1γ 2 + β 2 ) / (1 − β1γ 1 )]* incomelc 
 h =1 

31
previous-LCC in origin: ∑ [( β γ 1 5h
+ β 5 h ) / (1 − β1γ 1 )]* pa h * q h * sz h + [( β1γ 2 + β 2 ) / (1 − β1γ 1 )]* income nlc
h =1

 31 
post-LCC in destination: nshr *  ∑ [(γ 1 β5 h + γ 5 h ) / (1 − β1γ 1 )]* pa h * q h * sz h + [(γ 1 β 2 + γ 2 ) / (1 − β1γ 1 )]* income nlc  +
 h =1 
 31

shr *  ∑ ( [(γ 1β 5 h + γ 5 h ) / (1 − β1γ 1 )] + [(γ 1β 6 h + γ 6 h ) / (1 − β1γ 1 )]) * palh * q h * sz h + [(γ 1β 2 + γ 2 ) / (1 − β1γ 1 )]* incomelc 
 h =1 

31
previous-LCC in destination: ∑ [(γ β 1 5h
+ γ 5 h ) / (1 − β1γ 1 )]* pa h * q nlc * sz nlc + [(γ 1β 2 + γ 2 ) / (1 − β1γ 1 )]* income nlc
h =1

Results: total
-181.67 euros on average per
origin
travel and party

destination
travel and party

travel and party

Conclusion:
- There are a change in tourist behaviour. (Reweighting effects).

- LCC tourist spend more in destination per person and night.

- But, spend less nights.

- And, the party size remain equal to non-LCC tourist.

- The overall results is that LCC tourists spend less in destination.

“ Doy lo que tengo, que
aquellos capaces de hacer
más hagan su más, como
yo hago mi menos”
Federico Inchausti,
cabeza pensante del
TIDES (alguno tenía que
haber…)

Seminario tides - low cost

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