Direct Flights and Cross-city Tourism Expenditure

Abstract

Cross-regional tourism expenditure can stimulate market activity and meet the increasing demand for high-quality tourism experiences. Using UnionPay offline transaction data matched with flight route information from 2013 to 2018 in China, this study applied a difference-in-differences model to investigate the impact of direct flights on cross-city tourism expenditure. It found that, after the opening of new routes, the cross-city tourism expenditure between city pairs increased by approximately 3.2 percent. Direct flights also increased tourism expenditure on sightseeing, lodging, catering, and shopping, with the larger effects for city pairs separated by more than 400 km. Destinations with high-quality cultural and natural assets, such as national 5A-level tourist attractions, world cultural and natural heritage sites, and national tourist resorts, tended to experience increased tourist expenditure. Direct flights also produced spillover effects on expenditure in surrounding cities, which decreased with distance, and these effects occurred mainly in hub cities and origin nonhub cities. These findings have implications for urban growth policy.