Lanzarote Arrivals and Prices Continue To Fall

Tourist arrivals continue to fall on the popular holiday island of Lanzarote.  Making unpleasant reading for the many overseas owners of Lanzarote holiday villas and apartments as they struggle with declining occupancy levels and falling rental returns.

According to the latest figures just released by the Spanish airport authority AENA the number of visitors arriving on flights to Lanzarote fell again last month by 16.2%, versus September 2008.  With overall arrivals for the year to September end now down by 17.84%. 
 

The UK market – Lanzarote´s largest – remains the worst affected.  Thanks to the combined impact of the credit crunch and the depreciation of sterling against the euro.  Currently standing at just €1.05 to the pound.  Factors which have colluded to create a sharp drop in the number of British arrivals of nearly 20% for the year to date.  Whilst other key markets such as Germany and Eire are faring little better.  With arrivals down by 12.2% and 16.85% across the same period respectively.

Traditionally the UK has been a key engine of growth in the Lanzarote property market.  With thousands of British investors snapping up apartments and villas for retirement and relocation purposes or to rent out to fellow holidaymakers.  Lured by the promise of year round rental returns and a hitherto reliable and sizeable tourist industry – which last year alone welcomed over 1.5 million foreign visitors.
 

Now however transactions have fallen away sharply – compounded by the reluctance of local banks to lend to overseas buyers.  Creating price falls across the island and a glut of property for sale on the market.  But with very few buyers around to take advantage.

The impact of this shortfall in visitor numbers on Lanzarote´s economy cannot be underestimated.  Island tourist authorities recently reported that each tourist spends an average of €36 per day whilst on holiday in Lanzarote.  Which when multiplied by a drop of over 215,000 visitors for the year to date represents a €54 million plus hole.

 Hoteliers and apartment complexes are hurting just as much as overseas property owners and estate agents.  With ASOLAN, the island’s trade body reporting a fall in occupancy levels in Lanzarote hotels of 6.55% last month.  A vast improvement on the shocking figures recorded in May – when the number of beds filled fell as low as 49%, the lowest figures ever recorded in forty years of island tourism.  But still some way below last years monthly averages of 72% plus.