Determinants in tourist expenditure composition: the role of airline types

Abstract

The reduction in transportation costs when travelling with a low-cost airline (LCA) seems to have modified the composition of the trip budget. An understanding of expenditure composition when comparing LCA and legacy airline travellers is vital for destination marketers. Using micro official statistics data for air travellers to Spain in 2010 and the compositional data analysis (CODA) methodology, this study analyses the determinants of trip budget composition and its differences between airline types. The authors consider transportation expenses, as well as basic (accommodation and food) and discretionary (activities, shopping, etc) at-destination expenses. Log-ratios of budget share are fitted to a MANOVA, with travellers' attributes as explanatory factors along with the moderating effect of the airline type. Among the findings are that high-income LCA travellers spend relatively more at the destination, LCA tourists travelling with friends have a larger share of discretionary expenses, and highly educated travellers have a larger share of discretionary expenses for both airline types