Tourism in the Azores Islands and its Context in Portugal

Transcription

1 Tourism in the Azores Islands and its Context in Portugal Silveira Luís University of Coimbra, Portugal, Santos Norberto University of Coimbra, Portugal Abstract From virtually unknown in the 90's of the twentieth century, several publishers have recently given many awards to the Azores as a Sustainable Tourism destination. Having the Azores its economy based on the dairy farms (Primary Sector), and some corresponded industries, tourism has gained importance. It increased significantly from 1997 to 2006, having fallen in recent years, with the justification of the global economic crisis. However, in other Portuguese regions, tourism increased in general. Accessibility through air transport is now very discussed because the aviation in the Azores is not liberalized. The promotion of the archipelago in the tourists departing countries, and understanding the delay that the region has towards others, must be increasingly accurate and worked. And for that, it is creating different products and quality services, which will permit this outermost region to be competitive as a tourist destination. Key Words: Azores, islands, tourism, development, sustainability, competitiveness. Introduction The Azores was one of the last, if not the last, region of Portugal to invest in tourism as one of the supports of the economy. This fact is reflected economically over its positioning towards other destinations, especially identifiable in terms of the quality required to hotel facilities, tourism products, specialized training of human resources, general hospitality population and transport accessibility. At the same time, this delay can be seen as valuable in the planning of tourism. New models can use previous experiences (made by other tourist destinations); using benchmarking to look for guidelines, to create a competitive destination, innovative and be able to appreciate the authenticity, as extensively discussed by Dean MacCannell in 1976 and subsequent years, and sustainability. In fact, the Azorean territory has a very little modified natural landscape and a population less imbued within the process of globalization in comparison with other parts of Europe. The Azores have already been mentioned several times as being one of the last secrets of Europe due to the fact that is an unknown territory for European and worldwide tourists. Characteristics of refuge and sanctuary have been and will be, increasingly, factors to preserve, enhancing sustainability and authenticity. As Wang (1999, cited in Brown, 2013, p. 176) explains, tourists seeking existential authenticity are preoccupied with an existential state of being activated by tourism. Nature, humanized space and intangible heritage 260

2 of the Azores have been the reasons to receive in the last years more than 30 awards as a tourist destination from websites and internationally recognized magazines. Some of these records are: nd Best Islands in the World for Sustainable Tourism (National Geographic Travel) 2010 World s Most Unique Travel Destinations (Forbes) 2010 Election of the 7 natural wonders of Portugal, where the Azores won two (Volcanic Landscape of Pico Island and Lagoon of Sete Cidades in São Miguel Island) Best Trips of Summer 2011 (National Geographic Travel) 2012 Best Places to go for 2012 (The University of Nottingham Magazine) Places to go in 2013 (Fodor s) In 1996 the Government appointed tourism as one of the priority economic areas in terms of investment, politically culminated with the publication in 2008 of the first plan for tourism in the region. Tourism has increased significantly in the archipelago over the years, stabilized and then regressed for the past four years because of the European situation and the Portuguese economic and financial crisis. We have to characterize tourism in this region and realize why it is the Portuguese region with fewer tourists, but with more international recognition as a destination for Landscape, Sustainability and Islands (among others), also explaining why tourism numbers are not the expected ones (as planned). Using data from the National and Regional Statistics Services we will evaluate several heterogeneities existing between the Azores and the other Portuguese regions, in order to confine and explain the specificity of the archipelago in terms of tourism. Accessibility, Promotion and Competitiveness Earlier in this century, tourism acquired an important public consciousness as never previously achieved. This happens not only by the growth of tourism itself but also because of the various phenomena (September 11th, airline bankruptcies, natural disasters, weather occurrences), which have brought negative impacts to the most economically dependent destinations (Hall et al, 2007). More recently, in 2008, with the onset of the global crisis, the Azores began experiencing its first crisis in the sector and that, until today, has not reversed. Pauchant and Mitroff (1992, cited in Ghaderi et al, 2012, p. 80) state, managers need to envisage the evolution of a crisis as a series of steps covering signal detection, prevention, preparation, containment, damage limitation and recovery. They should be proactive, not reactive, by seeking to predict crisis situations and getting ready for different scenarios as well as learning lessons from experiences of crises which can inform future policies for coping (Mitroff, et al, 1989 cited in Ghaderi et al, 2012, p. 80). It is now known that tourism is the only service activity that can potentially provide trading opportunities for all nations, regardless of their level of development (Borbica and Cristureanu, 2008, p. 189). However, to tourism exists, is not enough being receptive to it. Two words support its development: accessibility and promoting the destination. That is the destination management. Tourism only became a global phenomenon when commercial aviation was no longer accessible to only a few within the reach of the main population (Teles et al, 2009). As written by Biegera and Witmerb (2006, cited in Teles et al, 2006, p. 256), Air transport and tourism have always been interlinked; with tourism being a driving factor for and often a catalyst 261

3 of change in air transport; most notably throughout the development of new business models such as charter airlines or low-cost carriers. The charter flights reality is what has been used for the Azores. The process occurs through the Regional Government and with contracts with travel agencies in Northern Europe countries. These agencies hire airlines of their respective countries which perform scheduled flights once a week, normally. The Azores, more than other tourist destinations, is largely dependent on air transport due to its geographical position and insularity. SATA, the regional airline had also a central role for tourism in the Azores, opening in the first decade, several routes to European and North American (U.S. and Canada) cities. Pearce (1989, cited in McKercher and Lew, 2007, p. 64) says that "market access is a concept based on the idea of reducing the distance... In theory the closer destinations should have a competitive advantage relative to more distant. If there are direct tourist flows between the source markets and the destination, this will significantly increase the economic gains for this territory. At the same time, the larger the distance between the two points is, the greater will have to be the attraction capacity and competitiveness of the destination. Consequently, it is important to explore the resources in an innovative way, with significant gains, in order to be able to expand the destination capacity of attraction, create tourism products competitiveness and being unique and with exception characteristics. In terms of air transport, while the European aviation is mostly liberalized, the situation is different in the Azores. Being considered an outermost region of Europe, different policies are applied in different areas, and aviation is one of them. For that reason, there are unprofitable routes, due to the low population density and divided among 9 islands. As compensation, both Government ruled airlines, SATA and TAP Air Portugal, fly alone the inter-island routes and between the region and the mainland. They receive a money percentage from the Government for each sold ticket. There is a market control on all routes where they are flying to and with total exclusivity. Foreign companies only fly on routes unused by SATA and TAP and previously negotiated with the Regional Government. There is almost no competition in terms of prices between the two state companies, by mutual agreement. The Azores sees its accessibility significantly conditioned, facing a tight supply of flights and travel options. The promotion of a tourist destination should be proactive, be advertised and sold by the responsible agents, among source markets. The ability to promote the authenticity and the advantages of the destination is crucial due to an increasingly demanding tourist, in their desires and motivations, and their needs to be stimulated by the images, to make them believe that they are related to the realities of a local identity (Markwich, 2001, cited in Nicoletta, 2012, p. 25). This role has been played in recent years by the Azores Tourism Association (ATA), encompassed by the private economic agents of the archipelago and in close relationship with the Regional Tourism Entity. The success of tourism destinations in world markets is influenced by their relative competitiveness (Enright and Newton, 2004). It is not sufficient to a tourist destination to have resources to be competitive, Unlike the comparative advantages of a destination which include access to resources, the competitive advantages mean the destination s ability to effectively use these resources in the long run. (Risteski et al, 2012, p. 379). Also about competitiveness, Ritchie and Crouch (2003, p. 11) report that while in the animal world the importance goes for the survival instinct of the strongest, in the current human society, survives the most competitive; 262

4 not always those who have more resources will be the most competitive, but those who have the ability to use them efficiently. Planning is the key to achieving this goal. Spatial Plan of Tourism of the Autonomous Region of the Azores (POTRAA) In 1976, the Azores got the political status of Autonomous Region, starting to have its own Government and Parliament. With this political power closer to the territory and to the population, also began the need to endow some islands with larger hotel infrastructures and with the standard comfort conditions. It was in the 80s that hotels were built, through public initiative, on islands where there were just a few and little hostels. The most populated islands, São Miguel, Terceira and Faial already had structures from the 70s but proceeded to their modernization and adjustments. Tourism and tourist accommodation increased until mid-90s but not significantly. In 1996, with the regional elections, came in power the VII Regional Government, which promoted tourism investment, assuming the importance of planning and its contribution to the economic activity. This strategic pillar included promoting wealth through sustainable tourism motto (PGRA, 1996). Sustainability is defined as the process of taking into account the needs of current generations, towards the development and quality of life, not compromising the ability of future generations to meet their needs. This plan became officially approved by the Regional Legislative Decree No. 38/2008/A, which "defines the strategy of sustainable development of tourism and the territorial model to adopt, with the fundamental vocation to aggregate the efforts and initiatives of the regional and local government and the whole Azorean society, around a set of targets commonly shared". Despite the late approval and publication in the Official Journal (in 2008), POTRAA was being presented and discussed in three phases. The first phase was presented in One of the key components of the plan was to structure the prediction of 15,500 beds for 2015, along with a reserve of 1551 beds to cope with possible unanticipated dynamics in each one of the nine islands. Investment in tourism enterprises provides allocation for tourist accommodation in urban and rural areas. In urban areas, it would be possible to build up or remodel all types of structures for tourism if properly contextualised into the urban landscape. In rural areas spaces for rural tourism or nature could be created, with special preference for those ones where the existing buildings were used (recovery, rehabilitation and patrimonialization). Land use should be maintained with low density and observe the morphological characteristics of the territories. Due to the different dimensions of territory and population between the islands, the plan establishes maximum numbers of beds for each different vocations and major tourist and secondary vocations to develop in each territory, as can be seen in Table 1. The tourist offer should also be planned according to location and according to the dynamics between some islands facing others, creating more cohesive tourism products and territorial development models, interconnected and not isolated, leveraging cross selling from the existence of natural resources with great potential of attraction. 263

5 Table 1. Touristic Strategies by Island (Source: Created from DLR 38/2008/A) Island Main Strategy Specific Strategies Santa Maria Sun and Sand Gastronomy; Golf; Nautical Sports São Miguel Volcanism Landscape; Heritage; Cultural Events; Meeting Industry; Hydrotherapy; Recreational Boating; Diving; Golf; Radical Sports; Gastronomy; Hiking Terceira Heritage Cultural Events; Holy Spirit Catholic Event; Volcanism; Meeting Industry; (UNESCO) Vineyard; Golf; Gastronomy Graciosa Hydrotherapy Biosphere Reserve (UNESCO); Wine; Volcanism; Diving; Heritage; Nautical Sports São Jorge Gastronomy Fajãs ;; Hiking;; Nautical Sports;; Holy Spirit Catholic Event, São Jorge cheese Pico Faial Flores Whale Recreational Boating Landscape Diversity Wine/Vineyard Landscape (UNESCO); Mountain, Volcanism; Cheese; Hiking; Holy Spirit Catholic Event Sea; Whale; Diving; Volcanism; Golf; Nautical Sports; Meeting Industry; Hydrotherapy Community; Rest; Diving; Hiking Corvo Community Biosphere Reserve (UNESCO); Experience; Rest; Diving The tourist demand didn t follow the lodging accommodation offer, and because of that, in 2010, is published in the Official Government Journal, the Regional Legislative Decree No. 13/2010/A that partially suspended the POTRAA. Based on the negative national and international economic cycle, this decree came to pause part of the number of beds predicted to 2015, safeguarding the tourist infrastructures with a low number of beds (rural tourism and rural tourism) and enlargements of larger hotel units. These investments were made under the justification to potentiate the contact with nature, and with the main typologies of leisure tourism. Figure 1. The Portuguese Regions Source: authors. 264

6 The Heterogeneity of the Territory Portugal is divided into seven statistical regions, five in mainland Portugal Norte (North), Centro (Centre), Lisboa (Lisbon), Alentejo and Algarve and the two Atlantic archipelagos of Açores (Azores) and Madeira (Figure 1). The Portuguese territory has an area of 92,202 km² and in 2011 the population was 10,562,178 inhabitants. Based on Figure 2, there are differences between the seven regions. The archipelagos of the Azores and Madeira represent only 2.5% and 0.9%, respectively. The population distribution has also inequalities by concentrating 83.6% of the population in three regions: North (34.9%), Lisbon (26.7%) and Centre (22%). The Azores have only 2.3% of its population. 40,0 35,0 30,0 25,0 20,0 15,0 10,0 5,0 0,0 34,9 34,3 30,6 26,7 23,1 22,0 7,2 5,4 3,3 4,3 2,52,3 2,5 0,9 North Centre Lisbon Alentejo Algarve Azores Madeira Area (km²) % Pop % Figure 2. Percentage Area (km²) and Population (2011) by region, comparing with Total Portugal Source: Created from INE The Lisbon region, almost coincident with the metropolitan area of the same name, has the highest population density in the country, 940 inhabitants / km². The second highest value, 334 inhabitants / km² refers to Madeira. The lowest value being displayed is in Alentejo (24 inhabitants / km²). The Azores is the region with the nearest national average, 106 inhabitants / km². The Azores is an archipelago consisting of nine islands inhabited and with uneven areas and populations. The archipelago is located in the North Atlantic (Figure 3), occupying an area with more than 600 km crossed between the most remote islands (Flores and Santa Maria). The Azores is about 1600 km away from the Portuguese capital Lisbon and about 3800 km from Boston (USA). The official discovery of the archipelago by the Portuguese sailors was in 1431 with the sighting of the island of Santa Maria. 265

7 Figure 3. Geographic position of Azores Source: authors. The region is divided geographically into three island groups: the eastern group (Santa Maria and São Miguel), the central group (Terceira, Graciosa, São Jorge, Pico and Faial) and the western group (Flores and Corvo) (Figure 4). Figure 4. The Azores archipelago Source: authors. The area of the archipelago is 2322 km², with a marked disproportion between the different islands. The largest island, São Miguel, has km ² and the smallest, Corvo, has 17.1 km². 266

8 The population distribution in the archipelago is also uneven. Of the inhabitants residing in the Azores in 2011, 55.9% (137,856 people) live on the largest island, São Miguel and only 0.7% (430 people) reside on the island of Corvo (Figure 5). The islands of São Miguel and Terceira collectively have more than ¾ of the population (78.8%). The Azores is, in short, an insular region with a small territory on a national scale, distributed over nine islands far from mainland Europe as far from North America. Together with other islands and archipelagos (Madeira, Canary Islands, Martinique, Guadeloupe and Reunion) and Guyana (South America), almost all territories are small and distant from continental Europe. Their particularity introduced the concept of outermost region, which induced a specific development model inscribed into European Community policies. 60,0 55,9 50,0 40,0 30,0 20,0 10,0 0,0 4,2 2,2 Santa Maria 32,1 São Miguel 22,9 17,2 19,2 10,5 7,5 6,1 2,61,8 3,7 5,7 6,1 1,5 0,70,2 Terceira Graciosa São Jorge Pico Faial Flores Corvo Area (km²) Population (2011) Figure 5. Percentage Area (km²) and Population (2011) by island comparing with Total Azores Source: Created from INE Since its settlement, the Azores islands went through several major economic cycles: the wheat, the crop of pastel (dye plant), the pick of the fern (also for dyeing fabrics) and whaling. There were also other relevant exports (Day, 2011). Throughout the twentieth century until the present, the archipelago's main exports are based on the agricultural economy (dairy farms), through the production and sale of meat, milk, cheese and butter. Other exports are also raised as tea, tobacco, pineapple, canned tuna and fish. Tourism has also and currently, a relevant dimension in the regional economy in terms of wealth creation, employability and internationalization. Based on the year 2011, the Azores had an active population of individuals (Table 2); 12.7% work in the primary sector, the third highest percentage of Portugal, after the Centre and Alentejo regions. Regarding the distribution of the active population by three main sectors (Primary, Secondary and Tertiary), the tertiary sector has an absolute majority, followed by the secondary sector and, finally, the primary sector. 267

9 Table 2. Employed population according to sector of main activity by regions in 2011 Thousands Total Primary (CAE A) Primary (%) Secondary (CAE B F) Secondary (%) Tertiary (CAE G - U) Tertiary (%) Portugal 4 837,0 478,5 9, ,7 27, ,9 62,8 North 1 722,4 186,2 10,8 618,0 35,9 918,2 53,3 Centre 1 141,2 187,2 16,4 340,8 29,9 613,2 53,7 Lisbon 1 233,4 18,5 1,5 225,5 18,3 989,4 80,2 Alentejo 327,6 45,8 14,0 71,2 21,7 210,5 64,3 Algarve 193,5 15,6 8,1 28,0 14,5 150,0 77,5 Azores 106,7 13,6 12,7 21,2 19,9 71,9 67,4 Madeira 112,3 11,8 10,5 17,9 15,9 82,6 73,6 Source: Created from INE The tertiary sector comprises several sets of occupational categories, identified by the Statistical Classification of Economic Activities (CAE-Rev.3), from the National Statistics Institute (INE). The sequence between the letters G-U of the alphabet corresponds to the sector appointed, and the letter I corresponds to jobs mainly related to tourism - Accommodation and Food Service Activities. The prominence of tourism in jobs assumed greater importance in two regions: Algarve (23.4%) and Madeira (14.4%) as seen in Table 3. The Azores is the region with the lowest percentage of jobs dedicated to tourism (7.5%). However, can be a potential region for significant growth if well oriented on strategic tourism products associated with tourism of memory, identity, authenticity and, of course, nature tourism. Table 3. Employed population in the Tertiary sector and in Accommodation and food services activities in 2011 Thousands Tertiary (G-U) I I (%) Portugal 3 035,9 290,4 9,6 North 918,2 73,9 8,0 Centre 613,2 58,8 9,6 Lisbon 989,4 86,4 8,7 Alentejo 210,5 18,9 9,0 Algarve 150,0 35,1 23,4 Azores 71,9 5,4 7,5 Madeira 82,6 11,9 14,4 Source: Created from INE Between 2002 and 2011 all Portuguese regions had a positive change in the accommodation capacity. The Azores (64.6%) and Alentejo (52.7%) obtained the greatest variations. Algarve (8.9%) and Madeira (8.4%) had oppositely, minor variations (Table 4). It should be noted that in 268

10 any of the years under review, the Algarve is the region with largest accommodation capacity (102,462 in 2011), more than the double of the second region with the highest capacity, Lisbon (54,912). The Madeira archipelago was the 5th largest region in what accommodation capacity is concerned (2011), although numerically distant from the 6th and 7th regions (Alentejo: 12,874 and Azores: 8,871 beds). Table 4. Accommodation Capacity between 2002 and 2011 and Variation (%) Var % Portugal ,5 North ,3 Centre ,4 Lisbon ,9 Alentejo ,7 Algarve ,9 Azores ,6 Madeira ,4 Source: Created from INE 2003, 2006, 2009, Examining the specific situation of the Azores (Figure 6), between 1997 and 2011, an increase of the accommodation capacity occurred; having been between 1999 and 2005 when the increase was more significant, from 3939 to 8438 beds. From this year, and until recent data from 2011, the increase was small Figure 6. Accommodation Capacity (number of beds) between 1997 and 2011 in Azores Source: Created from SREA 1998, 2000 and INE 2003, 2006, 2009, The increasing number of beds, among the represented triennia (Table 4), was low from 2005, as mentioned above. This was a result of the lack of tourists arriving to the Azores. Despite that, the occupancy after 2002 (39,6%) has been falling consistently until 2011 (31,9%) (Table 5). 269

11 Table 5. Occupation Percentage of the Accommodation in Azores Azores 36,1 39,6 36,9 35,7 31,9 Source: Created from SREA 2000 and INE 2003, 2006, 2009, 2012) The number of tourists who spent at least one night in the Portuguese hotel industry, increased steadily between the years of 1996 and 2011 (Table 6). However, in some regions there was a decrease in some periods. In Lisbon, between 1999 and 2002 there was a decrease in the number of tourists. This situation is justified by the division, during 2002, of two sub regions that nowadays no longer belong to that region. They became part of Centre and one sub region became part of the Alentejo. Moreover, it can be seen that the Centre region comparatively, gained nearly half a million (1,090,516 to 1,565,297) and Alentejo, over 120,000 (491,697 to 613,775). Between 2002 and 2005, the Alentejo was the only region with a decrease in the number of tourists, 613,775 to 577,970. In 2008, with the onset of global economic crisis, an increase of tourists occurred. Probably, this is a consequence of the crisis in African and Mediterranean destinations competitors. With exception to the Azores and Madeira archipelagos, more distant from continental Europe, where the numbers decreased. Table 6. Number of guests between 1996 and 2011 by region Portugal North Centre Lisbon Alentejo Algarve Azores Madeira Source: Created from INE 1997, 2000, 2003, 2006, 2009, The number of nights spent by tourists in Portugal increased between all years represented (Table 7) although slightly between 2008 and At the regional level decreases occurred in Lisbon, Alentejo, Algarve, Azores and Madeira between some years. The most notable cases are the Algarve, Azores and Madeira. As noted in the Table 6, the number of tourists in the Algarve has increased over the years but the number of overnight stays fell in 2002, in 2005 and in Tourists have been decreasing the duration of their stays in this territory. In 2008 and in 2011, the Azores faced the decrease in number of nights, albeit insignificant (1,135,588 in 2005 to 1,127,513 in 2008 and 1,033,525 in 2011). In Madeira, between 2008 and 2011 the region has considerably reduced the number of beds for 648,858 overnight stays (less 8.6%). 270

12 Table 7. Nights spent between 1996 and 2011 by region Portugal North Centre Lisbon Alentejo Algarve Azores Madeira Source: Created from INE 1997, 2000, 2003, 2006, 2009 and 2012 In 1996, tourists spent an average of 3.4 nights in Portugal. The Algarve and Madeira possessed the highest values, 6.2 and 6.0 nights, respectively (Table 8). In other regions the numbers were below the national average. Different vocations by regions as tourist destinations can be seen from the data. The Algarve and Madeira, positioned as destinations Sun and Sea, reported to major annual holidays profile, acquired under the typology all costs included. The Azores, although distant from the European continent, possessed a value corresponding to a typology of stay for a long weekend (2.6) as Lisbon (2.3), and a further reduced stay in the North, Centro and Alentejo. In the Azores and as explained by Menezes et al (2008, p.209) traditionally, length of stay has been relatively short, explained mostly by the fact that the predominant tourists were from mainland Portugal, who routinely took regular flights, mostly over the weekend or around holidays, for short stays. Table 8. Nights spent average between 1996 and 2011 by region Portugal 3,4 3,3 3,2 3,1 2,9 2,8 North 1,8 1,7 1,8 1,8 1,8 1,7 Centre 1,8 1,8 1,8 1,9 1,8 1,8 Lisbon 2,3 2,2 2,3 2,2 2,2 2,2 Alentejo 1,7 1,6 1,6 1,6 1,6 1,7 Algarve 6,2 6,2 5,8 5,3 4,9 4,6 Azores 2,6 2,6 3,1 3,6 3,2 3,0 Madeira 6,0 5,7 5,5 5,6 5,3 5,4 Source: Created from INE 1997, 2000, 2003, 2006, 2009, The duration of stay in the Azores increased by 2005 to the average of 3.6 nights per tourist. In 2008 and in 2011 decreased to 3.2 and 3.0 nights. The Algarve was the region that lost more between 1996 and 2011, a night and a half, from 6.2 to 4.6 nights. The duration of stay in Madeira decreases 0.6 and it was demonstrated stable over the period studied. While the Algarve and Madeira, the Portuguese regions with greater tourist potential, continue to position 271

13 themselves as a leading holiday destination. The Azores still have a profile of short duration destinaton, although it is an archipelago of nine islands and distant from tourist departing countries, which would almost and automatically entail a longer duration of stay. The revenues of the hotel by each night spent between 2005, 2008 and 2011 in Portugal had a mean value of 29,84, 33,75 and 33,75 (Table 9). Revenues increased every year in the North and in the Algarve. In the other regions, revenues decreased from Lisbon is the region where tourists spent more with their stays, 42,39 in 2005, 47,83 in 2008 and 44,85 in 2011, as common in the regions where the nation capital is located. The Azores scores were below the national average in all these three years, placing it fourth in relation to the other regions. Table 9. Lodging income by night between 2005 and 2011 in the Portugal and Regions Euros Portugal 29,84 33,75 33,16 Norte 31,37 33,67 33,70 Centro 27,67 29,61 29,14 Lisboa 42,39 47,83 44,85 Alentejo 31,02 34,43 34,67 Algarve 24,15 28,29 28,75 Açores 29,57 33,94 32,69 Madeira 27,46 29,71 27,47 Source: Created from INE 2006, 2009 and 2011 Net revenues obtained by Azorean hospitality increased between 2001 and 2007 from to Euros (Figure 7). From this year there was a decrease. In 2011 revenues were of Euros. Revenues decreased, following the decrease that occurred in the number of overnight stays Figure 7. Gross income in the Azores accommodation between 2001 and 2011 ( ) Source: Created from SREA 2002, 2004, 2006, 2008, 2010 and

14 The type and number of hotels establishments in the Azores have been changing up over the years. In 2003, Guesthouses were more frequent in the archipelago with 91 structures (Table 10). In the Azorean region this type of accommodation is characterized by the construction or remodelling of a residential house, adapted to some rooms to be rented. In many cases, entrepreneurs do not have any training in hospitality and the physical condition of accommodation does not have the comfort standard index. With the development and formalization of POTRAA, that determines the quality and authenticity of the offer, it promoted to support the construction and adaptation of the most common type of tourism, hotels, and also the creation of spaces of rural tourism. The first type has a greater capacity for accommodation and with the standard comfort index, being located practically in urban centres. The number of hotels has increased significantly since the end of last century. In 2003 there were already 69 existing hotels and in 2011, this number raised to 80 hotels. As for the accommodation of rural tourism, this is characterized by a building with a smaller dimension, rebuilt or refurbished from a typical building of the region where is located, and more specifically, as its name indicates, a rural area. The quality standards are generally higher as the economic value, if compared to Guesthouses, hostels and some hotels. Rural areas dominate the Azores: small villages and buildings in general, and scattered among green spaces. In 2003 there were only forty-three (43) rural tourism establishments and in 2011, were ninety-two (92), the most common type followed by hotels. Table 10. Number of open accommodation structures between 1996 and 2011 in the month of July in Azores Hotels Rural tourism Youth hostels Campsites Hostels Guesthouses Source: Created from SREA 2004, 2006, 2008, 2010 and The number of beds (Lodging capacity) has more than doubled between 1997 (3573 beds) and 2005 (8438). The increase continued until 2011, although less significant, reflecting the decline on demand (Figure 8). When analysing the origin of visitors to Portugal and to the Azores in the timeline of 14 years, the Portuguese were the largest tourist group identified within the years (1999, 2003, 2007 and 2011). Although having declined the representation of Portuguese tourists, the Azores continues to be heavily dependent on this market. In 1999, 74.8% of tourists who visited the Azores were living in Portugal (Table 11) and in 2011, 57.9%. This dependence on the domestic market should decrease and a bet on a greater variety and proportion of foreign tourists should also be done. As stated by Schubert et al (2010, p.377) on the effects of international tourism on islands international tourism is recognized to have a positive effect on the increase of long-run economic growth through different channels. First, tourism is a significant foreign exchange earner ( ) second, tourism plays an important role in spurring investments in new infrastructure 273

15 and competition between local firms, third, tourism stimulates other economic industries by direct, indirect and induced effects. Fourth, tourism contributes to generate employment and to increase income. Fifth, tourism can cause positive exploitation of economies of scale in national firms Figure 8. Lodging Capacity between 1997 and 2011 in Azores Source: Created from SREA 2000, 2003, 2006, 2009 and 2012) Analysing the three foreign groups most representative in Portugal and in the Azores, there are differences between the two territories. Tourists from the United Kingdom and Spain have been the three most representative groups in Portugal, as Germany in 1999 and the Rest of the World in 2003, 2007 and 2011, where more specifically Brazilian tourists have been taking a growing number. Table 11. Percentage of tourists in Portugal and Azores by country/region of residence Portugal Açores Portugal Açores Portugal Açores Portugal Açores Portugal 44,8 74,8 47,3 65,2 47,3 66,0 47,0 57,9 Germany 9,5 5,7 7,0 4,4 5,8 4,4 5,3 7,0 Spain 7,6 1,5 8,6 1,5 10,4 2,3 9,8 4,0 France 3,9 2,0 4,4 3,2 3,8 1,9 4,7 1,9 Italy 3,6 1,5 3,0 1,1 3,1 0,8 2,7 1,5 Netherlands 3,0 0,7 2,9 0,6 2,5 2,7 2,8 3,5 UK 11,1 2,8 11,6 2,5 10,6 3,8 8,9 2,8 Others EU15 5,9 2,8 4,8 12,6 5,7 9,9 5,1 8,9 USA 3,1 4,0 2,2 3,3 2,1 3,0 2,0 3,0 Rest of World 7,4 4,2 7,1 5,6 8,7 5,1 11,7 9,5 Source: Created from INE 2000, 2004, 2008 and In the four years under review, tourists from Germany are among the three most represented foreign markets in the Azores. In 2003, 2007 and 2011 the EU15 group, the set of the first 15 countries that joined the European Union. Exception for the countries identified in the table 274

16 (Portugal, Germany, UK, Spain, Netherlands, Italy and France). Accordingly, EU15 refers to Belgium, Luxembourg, Denmark, Sweden, Finland, Austria, Greece and Ireland. Among this group, tourists from Sweden, Denmark and Finland are who most visited the region. Air transport The use of air transport is the largest tourist generator. Regardless the past few years, when the arrivals of tourists by sea have been rising, the accessibility by air transports continues to have a major importance, especially in the case of the Azores. In terms of airport infrastructures, the North region has a single airport with domestic and international flights, Oporto. The Centre and Alentejo regions do not have airports with commercial flights. Algarve is represented with the Faro airport. In the archipelago of Madeira, there are the Funchal and Porto Santo airports. The Azores have an airport on each island. Figure 9 reveals that the number of aircraft landings over the four three-year periods (2002 to 2011) increased in all regions represented, with the exception of Madeira. Traffic increased in the Azores between 2005 and 2011, from 16,028 to 17,858 landings of commercial flights. The year 2002 is underrepresented due to lack of data from five airports Porto Lisboa Faro * Açores Madeira Figure 9. Number of aircraft landings in 2002, 2005, 2008 and 2011 by region Source: Created from INE 2003, 2006, 2009 and 2012 The number of passengers who disembarked also increased at the airports of Porto, Lisbon and Faro. The Madeira accompanied the decline of the number in aircraft arrivals. The Azores, albeit the increased number of landings between 2008 and 2011, had a decrease in passenger numbers of 887,138 to 845,193 passengers (Figure 10). Analysing the number of passengers disembarked on each landing in the Azores, there is (except for the year 2002 due to incomplete data) an incidence of a regional flight profile, which is to say, associated with short and medium range aircrafts and with low passengers capacity. In 2011 the Azores average was 47,3 passengers per aircraft, less than half of passengers in Lisbon, with 106,3 (Table 11)

17 Porto Lisboa Faro Açores Madeira Figure 10. Number of passengers disembarked in 2002, 2005, 2008 and 2011 by region Source: Created from INE 2003, 2006, 2009 and 2012 Of the nine Azorean airports, only five have external flight routes (to out of the region) and only two receive international commercial flights (São Miguel and Terceira). Table 11. Passengers disembarked average by landing in 2002, 2005, 2008 and 2011 by region Oporto 62,2 67,3 80,7 85,1 Lisbon 82,9 86,3 97,2 106,3 Faro 145,8 140,5 136,4 137,2 Azores *96,6 51,2 51,4 47,3 Madeira 81,4 84,5 100,9 94,7 Source: Created from INE 2003, 2006, 2009 and 2012) It is important to analyse in detail the total number of commercial flights landing in the Azores. In 2011, 13,191 (63.5%) flights were coming from other islands of the archipelago (Regional); 2912 landings were made by flights coming from Oporto, Lisbon, Faro and Madeira (National) and 4667 (22.5%) landings from international airports (Figure 11). These data allow us to realize that the reality of this archipelago is different from other regions, where international flights comprise the largest percentage, followed by domestic flights and then the regional Regional National International Figure 11. Number of Landings in 2011 by flight type in Azores Source: Created from INE

18 In Figure 11 it was noticed that the second largest number of landings corresponded to international flights. However, from Figure 12, it can be seen a different reality through the number of passengers in direct transit and passengers landed in Only 107,748 passengers disembarked and 64,287 passengers in direct transit arrived in international flights. Most of the international flights landing in the Azores are due to aircraft that stop there to refuel. The Azores is strategically located in the Atlantic, allowing aircrafts with less fuel autonomy to fly between Europe and South America or from Africa and North America. On Santa Maria Island, for example, only 668 passengers disembarked from international flights against 28,554 who were in direct transit Disembraked In direct transit Disembraked In direct transit Disembraked In direct transit Regional National International Figure 12. Number of passengers disembarked and in direct transit in 2011 by flight type in Azores Source: Created from INE 2012 Destination Competitiveness and Sustainability of the Azores Ritchie and Crouch (2003) presented a conceptual model of destination competitiveness where they sought to expose the macro and micro factors that characterize a tourist destination and its global contextualization. According to the authors, tourist destinations present in a macro and micro scale, five functional groups: Supporting Factors and Resources, Core Resources and Attractors, Destination Management, Destination Policy, Planning and Development and Qualifying and Amplifying Determinants. Destinations are involved in Comparative Advantages (resource endowments) and Competitive Advantages (resource deployment) (Figure 13). Analyzing the Azorean case, the Supporting Factors and Resources (Political Will, Enterprise, Hospitality, Facilitating Resources, Accessibility and Infrastructure) start, with a high Political Will (the attitude of a government toward tourism) of the autonomous government in what tourism development is concerned and which started in The Azorean economy is mainly constituted by small and medium private enterprises (Enterprise factor). Larger enterprises, directly related with tourism, as sea and air transports belong to the government. This doesn t help the competitiveness, especially by the lack of other sea and air transport companies. Hospitality in the Azores is mainly ruled by small businesses such as restaurants, retail, hostels, which exist to support the local population in their leisure times and have been 277

19 adapted to receive tourists as well. Some were created from the tourism growth as Whale watching, for example, but with the functional capacity to diversify their business during the autumn and the winter months. Figure 13. Conceptual model of destination competitiveness Source: Ritchie and Crouch, 2003, p. 63. The Azores is the Portuguese region with the highest percentage of young people among the population. Even if the population is not yet high skilled in tourism, hospitality jobs and services, the Facilitating Resources are available in this territory, as well as the presence of several technical schools with courses in this area and at the regional university. About Accessibility, the Azores is part of the Schengen Area, where the population of 26 European countries can travel with no restrictions. There are also special agreements with USA and Canada (due to the number of Azoreans living in these countries) Despite that, the regional government controls the number of airlines that can fly to these islands, protected by the European Union status of ultra peripheral region. Infrastructure (elements) has improved in quality and in number in the last decade. European and national financial programmes supported the investment in several infrastructures and services used by tourists and inhabitants in general. Despite that, the quality is lower if compared with other Portuguese regions as Algarve, Madeira and Lisbon (tourism core places in Portugal). According to Figure 13, Core Resources and Attractors are constituted by seven factors (Market Ties, Superstructure, Entertainment, Special Events, Mix of Activities, Culture and History and Physiography and Climate). Market Ties exist in the Azores, mainly with the North American and Canadian tourists. Thousands of Azoreans emigrated during the XX century to these two countries and nowadays they and their relatives usually come to visit their origins. The 278

20 Superstructure, includes the control mechanisms associated to tourism as the regional tourism institute of the government. The volcanic landscape is also part of this element and it is absolutely unique worldwide (as non build structure) and the traditional houses that were adapted to be rural and urban tourism accommodation places. Entertainment, Special events and Mix of Activities are not developed as desired and the existing ones are concentrated in the spring and summer months. The Culture and History became from the Portuguese roots and influence, but it is specific, justified by the distance from mainland and from more than six centuries of history as an inhabited region. Physiography and Climate are very particular in this region, creating a unique landscape and environment. Physiography is the main tourism attraction but the rainy climate limits some segments of tourists. Destination Management is supported by nine factors. Crisis Management is being experienced by the Azorean tourism system for the first time during its short history, and as discussed before. The small and divided area among nine islands constitutes in a very fragile ecosystem, which is the main tourist resource of the Azores. The Resource Stewardship exists (from the government) and has come to play an important role to preserve it. Visitor Management has been implemented in a global mode, not locally, with the creation of a limit in the accommodation/territory entries, referring to a specific tourist area or attraction. Finance and venture capital has been supported by the regional government and by medium size and regional enterprises. Human Resource Development has been fomented by the university and by technical schools, also those located in Portugal mainland. Information/Research is processed and shared by the regional statistic institute (SREA), university researchers and the Regional Tourism Observatory. Quality of Service/Experience in the tourism is low, comparing with other Portuguese regions. The Marketing of the Azores destination is done nationally and in international but limited countries tourism fairs, represented by the tourism government institute and by the Tourism Observatory of the Azores where they contact travel agencies to start selling the regional destination. These two institutions are responsible for the Organization of tourism in the islands. Destination Policy, Planning and Development are constituted by eight factors. Audit occurs in a frequent base system where the government evaluates the work and the results of the strategies implemented by the organization as well the Monitoring and Evaluation. Competitive/collaborative analysis is done by the regional organization, comparing the strategies and collaborating with other archipelagos as Madeira and Canarias Islands, not neglecting the limitation of the comparison, due to the specific destination that Azores is. The benchmarking although is a strategic instrument. The Development of tourism in the Azores occurred trough the discussion and the elaboration of a specific plan (POTRAA), where it was pretended to highlight the potential and specifications of this archipelago as a tourism destination. Positioning/Branding was, and is, planned to make Azores as a quality destination oppositely to a mass tourism destination. Despite that, the quality services and human resources level must improve in order to make Azores different from other regions. The Vision proposed by the Azorean stakeholders is to position the archipelago as an environmental, ecological destination. Philosophy/Values about tourism is to keep increasing until a limit that would not change the culture and the traditional lifestyle. The System Definition applied to the Azores corresponds to 279

21 an archipelago of nine islands of different sizes and populations, with different products but all seen in a single one product, the Azores. The last group, Qualifying and Amplifying Determinants, correspond to Carrying capacity, Awareness/image, Interdependencies, Cost/value, Safety/security and Location. Carrying capacity is well defined to this destination. The specific limit was created to ensure the sustainability of the Azores in its all ways, and how we could see before, it was not achieved yet. Awareness/Image about this destination is seen as one of the last green paradises in Europe but only for those who went there and for those who know about the existence of these islands. The majority of the tourists still not know or are not aware of the Azores in their consideration set of destinations to choose visiting. About Interdependencies, the tourism in the archipelago grew with no specific interdependencies, but as a single destination. In the past few years and with the crisis among the numbers of tourists visiting the region, it started up a new way of thinking. Starting seeing the Azores as a stopover for tourists coming from North America to Europe or for tourists coming from Europe and who could choose to visit more than one archipelago, Madeira and the Azores in only one holiday period. Cost/value is high in the Azores due to the lack of competitiveness on transportation, on local retail and on accommodation. The cost for one week of holiday in the Azores can be the same as one week in Caribe for a European tourist. It is pretended to be a quality destination, subsequently for a tourist who can afford it. Despite that, structures quality services and the human resources skills. must be improved. Safety/security is a strong factor in the Azores, with better values comparing with the rest of Portugal, which is already one of the safest and secures of Europe. The Location of this destination in the Atlantic is not very competitive if with other European destinations, but it is competitive if compared with destinations out of Europe. It can attract those European tourist flows to Africa or America destinations. The Azores can be competitive with other European destinations in the case of North American tourist flows to Europe. The Comparative advantages of the Azores as a destination are strong in the Physical resources, Historical and cultural resources and at the Superstructure. Improvements must be done at the Human, Knowledge and Capital resources. The Size of the economy will be always small but with possibilities to grow, and to become more dynamic. The Competitive advantages: Audit and inventory, Maintenance, Growth and development, Efficiency and Effectiveness are going through their first discussion, allowing a change of strategy, as a consequence of the first crisis in the short history of the Azorean tourism economy. Conclusion The Azores passed, in the timeline of 17 years ( ), from a region with no tourism planning, to a region with international recognition as a tourist sustainable destination. However, today it is a region where the accommodation and catering also feature a little oriented logic supply, in a market of great demand, skilled services and extended opening hours. The strategy of tourism to the archipelago has, as target, the development through the exploitation of existing resources, safeguarding the balance between the necessary and unavoidable environmental sustainability with the desired economic one, as well. Avoid mass tourism in the Azores was safeguarded by law, settling a quantitative limit for hotel capacity by 280