Expat Property in Spain Affected by Falling Tourist Numbers

Statistics just released by the Spanish airport operators AENA reveal that tourist arrivals in parts of Spain previously hugely popular with international visitors, such as Lanzarote, continued to decline sharply in February.  This is having a clear effect on the property market in Spain too, which has already seen significant declines in terms of levels of interest and asking prices as well.

According to AENA, the total number of foreign visitors arriving in Lanzarote in February this year had dropped by just over 19% compared to the number of arrivals in February 2008.  They also recorded double digit decreases across all key tourist markets in Spain – this is very bad news for those with holiday homes in Spain that they want to profit from, and also very bad news for anyone attempting to sell their property in Spain.

Looking specifically at Lanzarote as a benchmark for Spain’s popular tourism centres, according to the latest figures from AENA total tourist numbers fell from 147,698 in February 2008 to 119,269 in February 2009.  This is a drop of 19.25%.  The cumulative figures for the year to date indicate a 16% fall overall in the number of people arriving on flights to Lanzarote compared to last year as the current economic crisis starts to bite deeply into Lanzarote´s all important tourist industry.  As a result of this, the Spanish property market is being affected by falling tourist numbers too.

In Lanzarote the largest falls have been registered in Lanzarote´s biggest marketplaces such as the UK – where the added impact of the deprecation of sterling against the euro has resulted in an 18.82% drop in arrivals from Britain during the first two months of 2009.  The news from Germany – Lanzarote´s second largest market – is little better.  Tourist arrivals are ‘only’ down by about 13.36%, a pattern which is repeated across Scandinavia, Holland and Austria.

Only the Irish market – Lanzarote´s third largest – has shown a small degree of resilience with arrivals from Eire falling by ‘just’ 3.74%; this reflects Lanzarote´s enormous popularity as a holiday destination in the Republic.

Falling tourist arrivals are inevitably having a knock on effect in many other sectors of the island’s economy of course.  ASOLAN, the local hoteliers association, has reported a drop in occupancy levels of just over 13% in February, whilst the Lanzarote property market – traditionally fuelled by overseas investment – is currently becalmed.

According to Spain’s Ministry of Tourism this picture is being replicated across the country.  Total foreign tourist numbers were down by 15.9% during February, (versus the same month in 2008), and British arrivals in particular were down by a whopping 23.4% for the same period.  None of this bodes well for those hoping to profit from their holiday homes in Spain, nor is it good news for those looking for overseas investors to sell their Spanish property to.  But as we’re all aware, it’s a pattern being replicated across large parts of the world, and whilst it is certainly slowing down housing markets, the knock on effects of the global financial crisis are also encouraging more of us to escape abroad.  A fact that is evident when you realise that the numbers of expats moving to live in Spain and the number of people dreaming of a new life in locations such as Lanzarote have not diminished.