Representatives from Tui, Jet2, and Ryanair have issued a joint warning at Fitur about a possible recession in the UK and Germany that could affect the Canary Islands in a big way, due to their reliance on tourism with an all-year-round climate and market, especially because of rising airport charges and hotel prices in the archipelago.
Delegates from the ‘big three’ said that it is imperative to exercise restraint in fare adjustments in light of what they perceive as an uncertain year ahead, emphasising the need for a comprehensive review of hotel prices in anticipation of economic challenges, due to the impact of inflation and the diminishing purchasing power of families in the UK and Germany, the two main source markets for tourists visiting the Canary Islands.
Reports highlight that tour operators are concerned over what they deem as "high" prices, prompting a call for a re-evaluation. Tui, Jet2 and Ryanair all underlined the persistent challenges posed by inflation and the economic downturn in key markets such as the UK, Germany, and Scandinavian countries.
Notably, industry insiders conveyed their uncertainty about a potential recession, echoing economic stagnation in major markets. Addressing hoteliers, the operators stressed the necessity of reconsidering pricing strategies given the prevailing economic climate.
In response, employers defended the price hikes, attributing them to the fundamental principles of supply and demand rather than a desire to exploit market conditions. Some sources emphasised the transient nature of the current high tourist season, drawing an analogy to the ebb and flow of the tide.
Hotel and apartment prices have gone up by 10%
To provide context, the average daily room rate (ADR) in the Canary Islands for December 2023 stood at 138 euros, which is a 9.6% increase from the previous year. Similarly, apartment rates averaged 86 euros, reflecting an 11.6% rise.
Despite these challenges, stakeholders acknowledged positive sales trends for both the ongoing winter season and the upcoming summer season, offering a silver lining amid the prevailing economic uncertainties.
