Is the spending behaviour of tourists affected by low-cost carriers' operation? Some empirical evidence

Abstract The objectives of this research include studying the impact of low-cost carriers on the spending behaviour of the tourists at a given destination. To accomplish these objectives we examined the allocation of tourist expenditures to different travel-associated expenses and its determinants in the Azores islands and compared the situation before and after the airline liberalization. We considered that socio-demographic and trip-related characteristics influence spending behaviour. We used Interval Regression Models to estimate the relationships between tourists' expenditures and their determinants. The results confirm a structural break in the value of the coefficients when considering the periods before and after the airline liberalization.