Have Low-Cost Carriers Influenced Tourism Demand and Supply? The Case of Alghero, Italy

This article analyzes how the introduction of low-cost carriers has influenced tourism activity in a European destination, namely the town of Alghero (Italy). This can be addressed via a multiple stage approach. Firstly, a descriptive analysis highlights the dynamics of tourism demand and supply in the past three decades. Secondly, a seasonal autoregressive integrated moving average (SARIMA) model with intervention variables is employed to highlight the influence that low-cost flights have had on the town of Alghero. Finally, the relationship between demand and supply is analyzed via a Granger test. The findings indicate that low-cost carriers have influenced both domestic and international tourism demand, albeit to differing degrees. The article offers policy direction on how tourism infrastructures should be developed according to an economic and envi-ronmental sustainability perspective.