The president of the Chamber of Commerce of Lanzarote and La Graciosa, José Valle, has analyzed in an interview with Ekonomus how the crisis derived from the war in Ukraine will affect the island in the coming months, and also the lessons learned during the pandemic to develop quality tourism. In addition, he expresses his concern about the slow implementation in our country of the European Next Generation funds for economic recovery.
Regarding the current situation, he highlights that despite the fact that Lanzarote, with a drop of 38%, was one of the areas of Spain where GDP fell the most during the pandemic, the island "has experienced a significant recovery in economic activity." "Although we are not yet as in 2019, there are 3 or 4 GDP points to recover, we have had good occupancy this summer, and spending per tourist is improving, which will allow us to consolidate the recovery of the sector, and of all companies," he explains.
"We are quite optimistic, the Canary Islands will be one of the areas that, possibly, will suffer the least from the economic crisis" derived from the war in Ukraine, Valle emphasizes. However, he acknowledges that "inflation affects us all, especially energy costs, and that will have to be regularized in prices." "There is no other option, although I hope it is temporary and does not stay in time," he clarifies.
Valle believes that "we will continue to be a very attractive destination and, possibly, many European residents will look for a closer destination" this winter. "Lanzarote will be in high season and now many markets that are competition are closing, both in Europe and abroad," he adds.
The president of the Chamber also recalls that "the tourist who seeks quality continues to travel, the tourism that suffers the most with crises is mass tourism, so we have to bet more on experience tourism, direct sales."
"I think Lanzarote is already at its maximum" of arrivals
In 2019, the historical record of tourist arrivals to Lanzarote was broken, with 3,400,000 people. "There were many economic sectors that were arriving very fatigued," Valle explains. That number of arrivals "can be compatible with a quality tourism model," he says, but "I don't think it is if we continue to grow exponentially, I think Lanzarote has shown that it is already at its maximum," he adds.
If tourism continues to grow in absolute numbers, he warns, "we should rethink many infrastructures such as the healthcare network or the airport."
"For me, it is essential that we value spending per tourist more than arrivals. We take the occupancy rate as a good thing, which is a good thermometer, but spending per tourist directly impacts our society with better employment, and above all, more opportunities," he clarifies.
"During the pandemic, the medium-high quality establishments were full"
Valle explains that, during the pandemic, entrepreneurs "have learned that we have to move to a tourism more oriented to experience, that gives value and support to our culture, our tourist centers, our gastronomy and our natural environment. That will allow more companies, more self-employed people and that we can offer better salaries," he adds.
"There was a great reflection the summers after the closures, because with 40% occupancy, all establishments, both hotels and restaurants or those that offered experiences that had a medium-high quality, were full and had very good months of billing," he details.
That reflection has led, Valle explains, to "a tourism commission being established in the Chamber that seeks to balance that balance of arrivals in the medium term and that we depend a little less on tour operation and more on direct sales, of that tourist who is looking for an experience destination, sustainable, of the landscape, etc.
"Economic diversification" involves "higher quality tourism"
84% of newly created companies so far this year are from the tourism sector. The president of the Chamber considers it "very difficult to achieve an economic model that replaces tourism." "What we have to achieve," he says, "is that tourism works and gives opportunities to everyone."
"One of the great diversifications of the economy is that we have higher quality tourism, which allows many more companies, many more self-employed people, and that, above all, promotes that the client who arrives on the island "instead of staying in the hotel facility goes out to enjoy everything we contribute on the island."
"But it is also true that in Lanzarote tourism can be complemented with sectors such as technology, sustainability, green economy and marine economy." "There are also digital nomads," he adds, "who are moving from large cities to places like Lanzarote, they can contribute knowledge to the island, and we can work with them during their long stays here."
I believe that "the technology sector is a bet in which we can compete, growing in the industrial sector is complicated" as Lanzarote is a biosphere reserve, with 65% of the territory protected.
"Fear in the employers' association" that "a large part of the European funds will be lost"
To achieve that diversification, it will be essential to assimilate the European Next Generation funds to repair the economic and social damage caused by the pandemic.
However, the president of the Chamber warns that for its absorption, "the Government of Spain has to be very agile and I find it difficult to see that things are being done with the speed that this requires." "If we do not use these funds well, the Spanish economy will be less competitive tomorrow," he adds.
Valle highlights that with regard to the digitization of companies, "the digital kit initiative" is having very good acceptance, but he misses more lines of sustainability, energy efficiency, green economy. "There is a lot of fear that a large part of the funds will be lost due to lack of projects, that is what worries me," he clarifies.
Valle believes that there are other countries, such as "Germany, that are doing better." "Maybe that is where we have to look," he suggests.
"We have to define very well where and what renewable energies are the most suitable for the island"
The president addresses another of the major lines of the Next Generation funds, renewable energies: "The first thing that Lanzarote has to do is an ordinance and an island planning that allows us to organize very well the places where that renewable energy is installed. The institutions, together with the private sector, should open a working table where we can accelerate and, regulate very well the spaces where the infrastructure has to be placed and what renewable energies are the most suitable for our island model, which promote sustainability and the conservation of the landscape."
"It cannot be that Lanzarote is the Canary Island where there are the least renewable energies, among other things, because we are suffering from the high dependence on oil," Valle laments.
However, the president of the Chamber explains that "the Cabildo is working on this issue" and, among other things, has signed an agreement with the Chamber so that its window for the management and processing of renewable energy subsidies is also available to individuals.
