Tourism Demand, Low Cost Carriers and European Institutions : The Case of Brussels

The flow of tourism to a region is highly dependent on its accessibility and the cost of travel represents the main economic factor explaining tourism demand. The arrival of low cost carriers (LCC), with cheaper air fares, greatly leveraged the tourist flow around the world. However, as argued by some authors, if the destination is unique the importance of accessibility could be less relevant. Using quarterly data from 2000 to 2015, the paper assesses the effect of LCC on tourism demand focusing on Brussels. The peculiarity of Brussels comes from the high concentration of European and International institutions located in the city, which makes it a very interesting and singular case of research. Results reveal that LCC per se have a smaller positive effect on tourism demand for business purpose than the specific characteristic of Brussels. Indeed, the presence of European institutions complements the higher availability of low air fares, especially for business travelers