The Canary Islands are currently witnessing an extraordinary surge in luxury tourism, as revealed in the report titled ‘The Ascendance of Luxury Tourism in the Canary Islands,’ published by the international real estate consultancy JLL.
In recent years, this picturesque archipelago has experienced a remarkable upswing in the influx of travelers seeking top-notch experiences. This trend has not only fueled the development of high-end hotel projects but has also ignited substantial interest from investors in this exclusive segment. Impressively, a staggering 94% of the ongoing hotel projects in the Canary Islands are dedicated to four or five-star accommodations.
While the Canary Islands have long been favored by both domestic and international tourists, comprising 86% of overnight stays in the 2022 financial year, their allure as a luxury destination has undergone significant reinforcement due to several pivotal factors. These include substantial investments to enhance the islands’ infrastructure, the emergence of new luxury hotels, the concurrent growth of exclusive activities and experiences, and a consistent flow of tourists throughout the year, thanks to the region’s stable climate.
Consequently, prominent hotel brands like NH’s “Tivoli,” “Alila,” and Hyatt’s “Joie de Vivre” are already gearing up for new openings on the islands, with plans extending into 2025. Other industry players are likewise expanding their footprint through strategic mergers or acquisitions with local operators. Particularly noteworthy are Hyatt’s acquisition of Apple Leisure Group (ALG), encompassing 12 resorts with over 4,000 rooms, and the merger between IHG and Iberostar, involving seven resorts and more than 2,500 rooms.
Luxury hotels have consistently demonstrated strong business performance in the archipelago, with Tenerife and Lanzarote standing out as benchmarks for this type of establishment. Presently, Tenerife leads the five-star market in the Canary Islands with an average rate of approximately €202, surpassing the general Canary Islands average by €14. Notably, this segment has witnessed a 28% increase in the average rate since 2019. Lanzarote follows closely with a growth rate of 21%.
INVESTMENT IN INFRASTRUCTURE IN THE CANARY ISLANDS AND ECONOMIC GROWTH
Investments in infrastructure and sustainable development are playing a pivotal role in this thriving tourism landscape. Between Tenerife and Gran Canaria alone, a total of €2.6 billion are being invested, sourced from national, European, and private funding. These investments aim to ensure that the islands have the necessary facilities to sustain their tourism growth. Notable projects include the renovation and expansion of Tenerife South airport, improvements in the railway network within the islands, and the establishment of a robust electric vehicle charging network to support sustainable tourism.
Thanks to these advancements, the Canary Islands have evolved from a traditional all-inclusive model to a high-end hotel offering, witnessing a remarkable 64% increase in the number of rooms in five-star hotels over the past four years. This transformation has not only elevated the islands’ tourism appeal but has also contributed to remarkable economic growth, with a compound annual growth rate of 4.1% between 2019 and 2022.