Lanzarote Living

The number of foreign holidaymakers arriving on flights to Lanzarote fell again last month.  According to the latest figures just released by the Spanish airport authority AENA.  Which will make grim reading for both local and overseas owners of property on the island.  As transactions continue to stagnate and prices soften.

The new AENA figures show a shortfall of 16.2% in foreign tourist arrivals during September – versus the same month in 2008.  A number much in line with previous months falls.  With the British market once again the hardest hit – thanks to the added impact of the seemingly ongoing depreciation of sterling against the euro.  Now back as low as just €1.06 to the pound.

The UK is by some distance Lanzarote´s largest and most important tourist market.  So the cumulative fall in British visitor numbers of nearly 20% is having a major impact across the islands economy.  With hotels reporting falling occupancy levels, bars and restaurants struggling and the property market seemingly becalmed.  Whilst owners of Lanzarote holiday villas and apartments are forced to come to terms with falling bookings and rental returns.

The picture isn’t much better elsewhere – as visitor numbers from all other key markets continue to fall too.  With German tourism (Lanzarote´s second largest source of visitors) down by 12.2% and Irish arrivals (the islands third largest market) falling by 16.85% for the year to September end.

Overall Lanzarote has now welcomed over 215,000 fewer tourists than during the same nine month period in 2008.  And with local tourist authorities calculating that each visitor spends an average of €36 per day this equates to a massive €54 million plus hole in the islands’ economy.

Virtually every sector is affected by this.  With ASOLAN, the local hoteliers trade body reporting ongoing declines in occupancy levels.  Down by nearly 7% again in September.  Whilst property transactions have also ground to a halt, despite falling prices.  Thanks in part to the added issue of local banks refusing to extend mortgage lending to most prospective overseas buyers.

Whilst many seem to believe that the UK economy has nearly weathered the storm 2010 could come as something of a shock.  As unemployment is set to rise whilst disposable incomes look likely to be squeezed further by rising taxes.  As the government desperately strives to lower Britain’s astronomical public borrowing.  All of which points to another difficult year for Lanzarote´s tourist and property markets.  As the days of multiple annual foreign holidays in Lanzarote and second homes abroad may well be truly behind us.