In brief, it’s all about money! For the latest data available (year to June 2014), tourists in the Canary Islands were estimated to have spent €4.6 billion during their stay, a 22% increase on the value four years earlier. As we can see, however, the growth in Lanzarote’s tourism revenue far outweighs that of the other “big three” islands.
To understand why Lanzarote is way ahead of the pack, we need to look at the three factors which determine total tourism expenditure:
- Number of tourists arriving;
- How long each tourist stays on average; and
- How much each tourist is estimated to spend per day during their stay.
All data in this note is taken from Canarian Statistics Institute (ISTAC).
Tourism Volumes
All four islands have seen a resurgence in tourism volumes since 2010, no doubt aided by problems in Egypt and the near total collapse of the Tunisian market. The lowest growth has been in Gran Canaria (5.5% per annum approximately) with Lanzarote showing the highest (8.5% annual growth). Over four years, these small annual changes build up to a significant difference in tourist arrivals.
Average Stay
Attracting tourists is just one pillar of a tourism strategy; getting them to stay longer is quite a different task. We can see below that only Lanzarote has managed to stabilise this critical factor whilst the remaining three islands have seen a decline. However, Lanzarote has in fact merely been playing catch up: the average stay in 2014 was 8.7 days, whilst the other islands managed between 9.2 and 9.4 days each. Although this may not sound like a major difference, it means that each tourist to Gran Canaria (the highest average stay) was there for 8% longer than in Lanzarote (the lowest).
Average Daily Spend
There has been little movement in average daily spend according to ISTAC. Over the period in question, the general index of inflation rose by around 5½%, so even the best performer on this measure (Fuerteventura) saw a small drop in real daily expenditure. Worryingly for Tenerife, tourists are spending an average of 7% less in real terms in 2014 than they were doing four years ago.
Conclusion
Tourism promotion has consistently been way too fixated on tourism volumes, but as we have seen, this is only one of the three pillars. For example, how can we encourage people to stay longer? The most obvious option here is to develop inter-island tourism but this can only happen with a reduction of inter-island transport costs, which I have written about in previous posts; an island hop from Lanzarote to Las Palmas and back, say, costs at least €100 per tourist and often is more. Moreover, the tour operators barely feature multi-resort holidays in their brochures; considering the cost of the island hops, this is perhaps not surprising. Unfortunately, the political will seems to favour the status quo and supporting the incumbent, high cost carriers rather than challenging the current tourism model.
