More flights seats, more tourists? Evidence from Peru

The aim of this paper is to determine if the increase in the number and capacity of non-stop flights to and from Peru that occurred between 2004 and 2015 affected the number of visitors arriving from its main tourist markets (United States and Europe). Results using a SARIMA-X model show that a 1% increase in the number of available seats on non-stop flights from and to the United States generated a rise in the number of American tourists by 0.36%. In Europe, where only Spain, the Netherlands and France are connected to Peru via non-stop flights, results are heterogeneous. Evidence shows that the increase had no effect on the number of tourists arriving from these countries, but that a higher availability of seats on flights arriving or departing from Spain did have a positive effect in the number of tourists arriving from Italy, Switzerland, and Germany. These findings suggest that expanding existing routes benefits inbound tourism to Peru even though not necessarily from the countries connected via direct air services.