The drop in tourist spending is blamed on increased flight prices

Businesses who depend directly on the tourism sector are beginning to notice a drop in sales, claiming that the increase in the price of flights to the Canary Islands, both nationally from mainland Spain and from the rest of Europe, are to blame.

The president of the Círculos de Empresarios de Gran Canaria business association, Dhiraj Chhabria, says that the improvement in tourist numbers is not being reflected to the same extent in their spending.

"Tourists are now paying more for their flights and accommodation in the Canary Islands and, therefore, are spending less when they go out from their hotels."

“This weakness in consumption”, he confirmed, "is more noticeable in German and Nordic visitors who have traditionally spent more in resort on their holidays, but are experiencing the effects of the invasion of Ukraine more closely than others, which is leading them to curb their spending."

Fund Grube, one of the main chain stores in the Canary Islands specializing in the sale of various beauty, lifestyle, and fashion products, and which employs 700 people, is also suffering from inflation.

"We are seeing it in our suppliers in general, in rent costs, products, services, works, facilities; they have all raised their prices. The increase in the cost of electricity is what we have noticed the most, it has almost tripled in recent months.”

Chhabria explains that many businesses are trying not to let increases affect the price of their products and have taken some saving measures in stores. The closures suffered during the pandemic are still slowing down the supply of merchandise they receive from abroad, especially as many of those suppliers have a great dependence on Asia for manufacturing, for example, of perfumes. Production is not currently high enough to meet global demand,” he added.

According to the Círculo de Empresarios de Gran Canaria, since the pandemic we have seen a change in the profile of the visitors coming to the islands for the time of year. Traditionally it has been older people with a higher spending power that come in March and April, but this year there have been a lot of families who prioritize their spending in bars, restaurants and leisure than in shops. “It is a tourist profile more typical of summer,” they said.

Products that are used in the destination, such as swimwear, sunglasses or sun protection, which are considered essential tourist needs, have skyrocketed, but on the other hand, the purchase of cosmetics products or ‘non-essentials’ have decreased.

On the upside, the islands have had many visitors who have come to the islands for the first time, as long-haul destinations such as the Maldives or Thailand were not possible to go to until recently.