This post examines how the Canary Islands in general and Lanzarote in particular has failed to follow Spain’s success in attracting tourism income.
The objectives of tourism can be described in simple terms: to attract non-local residents to an area and to encourage them to spend money. This expenditure in term generates jobs and wealth in the tourist area.
There are three sub-objectives that a tourism authority therefore needs to achieve:
– Increase the number of tourist arrivals;
– Increase their average length of stay; and
– Increase the amount of money they spend in the tourist area for each day of their stay.
This post will examine each of the four main tourist islands: Gran Canaria, Tenerife, Lanzarote and Fuerteventura. The first two are designated as “large” islands, due to the volume of their tourism activity and the second two are labelled “small”.
First, let us look at the number of guest nights (GNs) spent on each island from 2006 to September 2013. To avoid peaks and troughs in demand, all data is presented in a moving annual average (MAA) format.
For the four islands as a whole, GNs spent in the 12 months to September 2013 are almost identical to the 2006 level, at 101 million or so. However, if we look at each island individually (figures 1 and 2), there are definite winners and losers.
Figure 1: Guest nights in Lanzarote and Fuerteventura
Traditionally, we can see that Lanzarote was the more popular of the two small islands but, by 2011, Fuerteventura had overtaken Lanzarote in terms of GNs spent. Lanzarote has since recovered and the gap between the two has started to increase, but the gap by late 2013 was less than 1.5 million GNs compared to over 7 million in 2006.
Figure 2: Guest Nights in Tenerife and Gran Canaria
For the large islands, Tenerife has always had the largest tourist market and its lead over Gran Canaria has evidently increased since 2006. Indeed, Tenerife has managed to grow its tourist market since 2006, whilst that in Gran Canaria has clearly shrunk.
Let us now turn our attention to how much tourists actually spend on the islands (figures 3 and 4). Once inflation is taken into account, there has been a drop of 17% since 2006. So, given that the number of GNs has stayed the same, we can infer that each tourist is spending around one sixth per day than before.
Once again, there are definite winners and losers. Fuerteventura has managed to record a negligible drop of just 2% in overall expenditure whereas for Lanzarote, expenditure has declined by 26%.
Figure 3: Tourism Expenditure in Lanzarote and Fuerteventura
Whilst the two small islands are at the extreme end of the range in terms of tourism expenditure on the islands, both Tenerife and Gran Canaria have shown falls of 16%, which is almost identical to the Canary Islands figure.
Figure 4: Tourism Expenditure in Tenerife and Gran Canaria
Figure 5 converts the on-island expenditure for all four islands to a common index of 2006=100 so we can clearly see the winners and losers. There is no doubt that Lanzarote’s performance in attracting money to the island is significantly worse than its neighbours.
Figure 5: Tourism Expenditure Compared across all four Islands
How do the Canary Islands compare with Spain as a whole? With sporadic or long-term unrest in Egypt, Turkey and Tunisia, we would expect Spain to be a major beneficiary of this unrest. Figure 6 below shows that this is indeed the case.
Figure 6: Tourism Expenditure in Spain
With tourism expenditure having dropped in the first full year of the recession (2009), visitor numbers and expenditure have since surged. Indeed, the expenditure in 2012 was 28% higher than in 2006, which is a creditable performance by any standards. Unfortunately, Spain’s overall performance highlights the failure of the Canary Islands in general and Lanzarote in particular to generate adequate tourism demand, particularly in an area of Spain which is more dependent than most on tourism for its prosperity.