Lope Afonso calls for the island to develop not just more “but better”, while the Chamber of Commerce reflects on the significant demographic growth.
SANTA CRUZ DE TENERIFE, 21st March (EUROPA PRESS) –
The island of Tenerife concluded the previous year with a record number of tourist arrivals, reaching a total of 6.5 million, marking a 10% increase compared to the year before, as outlined in the Economic Situation Bulletin released by the Chamber of Commerce of Santa Cruz de Tenerife and disclosed this Thursday.
The tourism sector created approximately 3,900 jobs, increasing the total to over 68,000, and Tenerife also reached a new milestone in employment numbers, with over 426,000 individuals employed. However, the unemployment rate grew to 16.8%, a trend attributed by both the Cabildo de Tenerife and the Chamber of Commerce to the significant growth rate of the active population.
The bulletin’s specifics were presented to the press by the Cabildo’s Vice President and Minister of Tourism, Lope Afonso; the Minister of Industry, Commerce, Primary Sector, and Animal Welfare, Manuel Fernández; the President of the Chamber of Commerce, Santiago Sesé, and the General Director, Lola Pérez.
Afonso stressed that “the island is in good shape”, yet he urged for “responsible leadership” to address the “structural issues” in the economy. He finds it puzzling that there is an unemployment rate “not falling below 15% despite economic growth, companies struggling to find local workers, and low productivity rates.
He also highlighted a rise in absenteeism affecting the quality of tourist services, as well as training issues not meeting the demands of the productive sector.
The Vice President emphasised the importance of not merely focusing on Tenerife’s growth, but on growing in a more effective manner, particularly in the tourism sector, by emphasising competitiveness and quality rather than solely relying on numbers and mass tourism.
AFONSO: THE ISLAND GRAPPLES WITH A “MASSIVE PLANNING ISSUE”
He acknowledged that the unregulated nature of vacation rentals has led to distortions in the housing market, attributing this to a “massive planning issue” in the past. He highlighted the disparities on the island between tense housing areas and vast undeveloped land where residential supply has not been addressed, coupled with failures in public housing policies.
“There’s no need to use a sledgehammer to crack a nut,” he emphasised, while expressing doubts about proposing restrictions to the European Commission on tourist arrivals or property purchases, given the substantial economic contributions received for the islands’ development.
Sesé commended the positive tourism subsector data but raised concerns about the rise in unemployment – with 9,800 more individuals unemployed, representing a 12.7% increase. This increase is attributed to the economy growing without the capability to “absorb” the rise in the active population.
The Chamber President suggested that 2024 should be a year of consolidation, stressing the need to prioritise “tourism sustainability” and reconsideration of infrastructure developments related to mobility and connectivity.
He highlighted a significant housing shortage impacting workforce availability and called for a profound assessment of the demographic strain on the island. Since 2000, Tenerife has seen an average annual population growth of nearly 10,000, causing strains on public services, land, and natural resources.
As of 1st January 2023, Tenerife is the most populous island in the archipelago, with over 944,000 residents, accounting for 48% of the Canary Islands’ demographic growth since 2000. Manuel Fernández specified that the majority of Tenerife’s population increase occurred between 2000 and 2011 and has now stabilised.
SESÉ URGES FOR “BOLDNESS” IN TACKLING VACATION RENTALS
Sesé also highlighted the rise in work absenteeism, increasing from 4-6% before the pandemic in the hotel subsector to 14%, causing organisational imbalances and overburdening staff.
He called for bold decisions in regulating vacation rentals, cautioning against overlooking potential negative impacts of tourism, illustrated by a reduction in hotel beds on the island.
Reviewing the report, Lola Pérez noted that all indicators exhibit favourable trends and a positive business sentiment. However, she warned of a decline in the business ecosystem, observing that while 203 more companies were established in 2023, pre-pandemic figures are yet to be matched.
Besides tourism, she highlighted an employment rebound in the industrial sector towards the end of the previous year, with over 17,000 new jobs. While the primary sector appears stagnant, there is notable recovery in construction, adding over 4,100 jobs since the pandemic, and a remarkable uptick in service sector employment, increasing by over 14,000 individuals.
