Study on the Socio-economic Profile and Potential of Nautical Tourism in Algarve International Centre of Territory and Tourism Research University of Algarve Comissão de Coordenação e Desenvolvimento Regional do Algarve June 2009
Study on the Socio-economic Profile and Potential of Nautical Tourism in Algarve International Centre of Territory and Tourism Research University of Algarve Comissão de Coordenação e Desenvolvimento Regional do Algarve June 2009 Authors: Fernando Perna Economics and Regional Development Maria João Custódio Methodological Analysis and Destination Image Pedro Gouveia Econometrics and Macroeconomic Impacts Vanessa Oliveira Technical and Research Support
International Centre of Territory and Tourism Research University of Algarve Abstract Aware of the growing importance of the sea and its associated economic dynamics, with a focus on the potential gains and opportunities in the development of nautical tourism, the International Centre of Territory and Tourism Research (CIITT) of the University of Algarve brought together a multidisciplinary team of academics and researchers who have been working for fourteen months in the various studies and methodological developments which have led to the report on, The Socio-economic Profile and Potential of Nautical Tourism in Algarve, commissioned by the Commission for Coordination and Regional Development of Algarve (CCDRAlg). In first looking to understand the industry, primary and secondary data were collected on demand and supply needs. According to the analysis, approximately 10 700 yachts that annually enter the marinas and recreational ports of the region were registered, implying a minimum volume of an estimated 35 000 national and international yachters. Findings show that visitors were significantly impressed by the region in terms of landscape, hospitality and gastronomy, and felt satisfied at the service and nautical conditions provided in the region. Also, return intentions within the following three years were expressed in nine out of in every ten yachters. 5 The hosting capacity of the region is fundamentally done through private initiative. The global impact of the industry up to estimates generated by the study of 1.48% of the region s GVA and today part of the region s economy. Also, approximately 1.57% of regional employment (direct and indirect effects of yachting, facilities and associated services), represent the sector s importance that cannot be dismissed, nor by its relative weight nor by its work- intensive characteristic. In fact, the stay of yachters and yachts significantly foster regional economic impacts, in which labor intensive provision of yachts maintenance and repair services, among others, associated to the satisfaction revealed in areas such as fiberglass, mechanic and electronic repairs, and other demands of more traditional services such as upholstery and marine carpentry, are of important value to the shipbuilding and repair industry and wintering / dry storage in Algarve. The latter is relatively saturated in the northern Mediterranean Basin though of competitive undertaking for the south, as is the case of Morocco. Market analysis shows greater demand on the part of Portugal, followed by the United Kingdom, Spain and the Netherlands, which as a whole represent a 78.9% share of the total number of entries in marinas and recreational ports in Algarve, distributed nearly homogeneously between 39.4% of nationals and 39.5% of the whole of the three external markets mentioned. However, it is worth noting that in entries involving nine-month long contracts (predominantly
The Socio-economic Profile and Potential of Nautical Tourism in Algarve between September/October to May/June), the UK represents 41.7% of the total number of contracts, with the Netherlands holding the same demand level as that of Portugal, both with 20.8%. In terms of characterization and needs identified, the study formulates development scenarios contextualized through competitive and SWOT analyses, from which suggestions are proposed for strategic nautical tourism in Algarve. Three strategic lines of approach are respectively put forward in an integrated manner grounded on widening internal and external markets, intensifying and expanding the value chain and finally, destination image and integrated communication. 6 The interdisciplinary analysis carried out by the study embodies a scale of knowledge in the vast nautical sphere in Algarve, where in the established framework, conclusions have been drawn and others arise after critical reflection of strategic components/factors. The results presented and the perspectives suggested represent, though not definitive, a contribution, in this way seeking to convey greater scientific support to decision-making in a priority industry for strategic regional development of Algarve tourism, and of future progressive weight in the region s economy. Research Layout Introduction The yachting sector in Algarve Demand Supply Profile, Image and Economic Impacts Analysis of Competing Markets Strategic Lines of Approach S1 S2 S3 Actions Conclusion Appendix Bibliography
International Centre of Territory and Tourism Research University of Algarve Supply Analysis Figure 1: No. of berths in Algarve in 2009 1.200 1.000 800 620 600 465 475 953 500 West of Cape Santa Maria holds 73.2% of the total number of berths. Marinas have in average 628 berths, and recreational ports 224 berths. 400 240 246 347 200 74 64 96 M. de Lagos M. de P. de R. do Doca de S. Portimão Clube Naval Francisco de Portimão Cais de Bartolomeu Dias Source: Data provided by equipment management entities. Boca do Rio Resort M. de Albufeira M. de Vilamoura P. de R. de Olhão P. de R. de Vila Real de Santo António Doca de Recreio de Faro Figure 2: Evolution of the total no. of berths in marinas and recreational ports in Algarve from 1974-2012 6.000 5.000 new marina of Ferragudo and expansion of the port of VRSA Within three decades (1974 2005), the number of berths in Algarve was multiplied by 4.3 and is expect to multiply by 5 in the 2012 forecast. 7 4.000 3.000 2.000 1.000 1974 1984 1994 1997 2000 2003 2004 2005 2012 Forecast Source: Data provided by equipment management entities. Figure 3: Relative distribution of berths according to contracts equal or greater than one month during 2007 9 months: 7.3% 1 month: 7.8% 3 months: 1.0% 6 months: 3.1% 5 and 10 years: 35.6% Projected trends for 2005 and 2007 indicate a decrease in the no. of contracts of greater duration and relative growth of one-year contracts. Nationalities representing significant commercial contracts include Portugal (37.7%) and UK (12.8%). 1 year: 45.3% Source: Data provided by equipment management entities.
The Socio-economic Profile and Potential of Nautical Tourism in Algarve Figure 4: Relative distribution of contracts equal or greater than nine months during 2007 0.3% 0.7% 3.3% 100% 2.8% 1.8% 3.0% 3.3% 90% 1.5% 3.9% 3.9% 9.8% Others 10.1% 80% Spain 70% 25.0% 23.0% Italy 60% Germany 50% 31.1% France 40% 81.3% Netherlands 30% 59.5% United Kingdom 20% 10% 29.5% Portugal 0% 5 and 10 Years Contract 1 Year Contract 9 Months Contract The weight of the UK and Dutch market rose in relative terms insofar as the duration of contracts decreased from 5 or 10 years to 9 months, the latter of which representing 62.5% of total no. of contracts. Source: Data provided by equipment management entities. 8 Demand Analysis Figure 5: Monthly average occupation rate of marinas and recreational ports vs classified accommodation during 2007 100% 90% 80% In annual terms, occupation rates of marinas and recreational ports show much less variation and seasonality than the traditional hotel industry which oscillates between 21.8% and 84.1% in 2007. 70% 60% 50% 40% Marinas / Recreational Ports - 2007 Hotel Industry - 2007 30% 20% 10% 0% Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Source: Data provided by equipment management entities.
International Centre of Territory and Tourism Research University of Algarve Figure 6: Entries in marinas and recreational ports vs overnight stays in classified accommodation establishments during 2007 Overnight Stays 3000000 2500000 2000000 1500000 1000000 500000 3000 2500 2000 1500 1000 500 No. of Entries However, in Marinas and Recreational Ports it is possible to share high occupation rates with reduced no. of entries during winter months, in this way capturing part of nautical sector impacts, though excluding direct, indirect and induced effects of crew members staying. 0 Jan. Feb. Mar. Apr. Mai. Jun. Jul. Aug. Sep. Ouc. Nov. Dec. 0 Overnight Stays No. of Entries Source: Data provided by equipment management entities; National Institute of Statistics Figure 7: Yachts Country previous destination before Algarve 60% 52,8% 50% 40% 34,0% 30% The geographical proximity factor is relevant, with the majority of yachts arriving in Algarve from Spain (52.8%) and other locations of Portugal (34%). Also, 7.5% of yachts arrive directly from the UK (including Gibraltar). 9 20% 10% 7,5% 3,8% 1,9% 0% Spain France Netherlands Portugal United Kingdom Source: International Centre of Territory and Tourism Research, UALG. Figure 8: Country of permanent residence of crew members 30% 27,6% 25% 20,8% 20% 19,2% 17,2% Portugal, Spain, the Netherlands and the UK represent 84.6% of yachters based on permanent address. Note that 3.6% own a second home in Algarve 15% 10% 5% 3,4% 1,7% 5,2% 1,7% 3,4% 0% Portugal Spain France Ireland Germany Netherlands United Kingdom Sweden, Norway, Finland Other Source: Data provided by equipment management entities.
The Socio-economic Profile and Potential of Nautical Tourism in Algarve Table 1: Visit profile Average no. of crew per yacht 3.47 Percentage of 35-64 age group 24.7% Average stay (days) 6.78 Average per diem expenditure per crew member (in euros) (excluding accommodation) 85.25 First visit to Algarve 23.0% The average stay, of approx. 7 days, is greater than the average stay in the region s classified accommodation establishments. The average per diem expenditure per individual is greater (even when excluding accommodation) and directly spent in the region, without intermediaries or package deals in country of origin, thus maximising the impact of local economies. Relative weight of yachts between 8-15 metres in terms of total demand 56.5% Average berthing time at: Marina or recreational port 70.93% Mooring 9.93% 10 Shipyard 19.10% Return to country/region of residence while yacht berthed in Algarve 42.1% (73.9% of which by air transportation) Destination development Landscape, hospitality and gastronomy most valued Price levels, urban land development and health services least valued Source: International Centre of Territory and Tourism Research, UALG. Figure 9: Average per diem expenditure per category, excluding berthing and running costs 6.6% 4.8% 11.0% Food, Drinks and Tabacco Boat Fuel Internal Transports (rent-a-car) Most expenditure was on food and drink, 63.6% of total yachters. 52% of meals were eaten in restaurants and cafés and not on board, representing a positive inherent impact. 13.3% 63.6% Domestic and Decoration Products Others Source: International Centre of Territory and Tourism Research, UALG.
International Centre of Territory and Tourism Research University of Algarve Figure 10: Identified needs by yachters for more berths in marinas and/or recreational ports, boatyards and moorings 80% 70% 60% Yes: 54.5% Yes: 67.4% Yes: 69.4% The need for more service locations (boatyards) is shared by the majority of boaters who visit Algarve. 50% 40% 30% 20% 10% 0% Marinas and Nautical Ports Boatyards Moorings Source: International Centre of Territory and Tourism Research, UALG. Table 2: Total demand impact of marinas and recreational ports of Algarve Impact Direct and indirect effects Directos, indirect and induced effects 11 GVA 70.043 M. 99.312 M. Weight of regional GVA 1.48% 2.10% Available income 56.599 M. 80.246 M. Private consumption 50.743 M. 71.946 M. Taxas 17.323 M. 24.433 M. Inter-regional import 12.659 M. 58.516 M. Employment (jobs) 2.962 3.969 Weight in regional emplyment 1.57% 2.10% Source: International Centre of Territory and Tourism Research, UALG. Provision of Nautical Services Figure 11: Average rating of nautical services (1=poor to 5= very good) Hull cleaning, painting 5,0 4,13 4,5 Electronic & Electrical Engineering 4,00 Overall evaluation of the services 4,0 3,94 3,5 3,0 2,5 2,0 4,18 Sail Repairs 3,93 Marina's Security 1,5 1,0 Overall assessment is good, 4 on a scale of 1-5. A total of 92.5% of those interviewed expressed willingness to use same service in the future. Fibreglass Services 4,71 4,38Upholstery 3,55 3,50 Carpenter Chandlery Source: International Centre of Territory and Tourism Research, UALG.
The Socio-economic Profile and Potential of Nautical Tourism in Algarve Image Analysis Table 3: Image of Algarve assessed according to keywords Cathegory % Examples of expressions used Hospitality 20.20% Calma, Friendly, Friendliness, Friendly people, Gentle, Hospitality, Pleasant, Polite People, Lovely Peaple, Smiling People. Atmosphere 19.20% Alegre, Peacful, Tranquilidade, Segurança, Acolhedor, Divertido, Tranquilo, Quietness, Relaxed, Familiar, Introvert, Security. Climate 18.20% Clima, Nice Weather, Sol, Sunny, Sunshine, Good weather, Vento, Warm, Temperatura, Good sailing winds. Nature 16.20% Beaches, Natureza, Paisagens, Sea, Águas, Limpas, Cool Water, Scenery, Sítios para fundear. The most referenced category was hospitality (calmness, friendly,...), followed by atmosphere (relaxed, peaceful,...) and climate. The region is also identified by its nature and gastronomy. The navigational conditions (particularly natural beauty and security), quality of life and price increases were also mentioned. Gastronomy 8.10% Gastronomia, Boa Comida, Good Eating, Fish. Others 18.10% Boa Navegação, Fast rising prices, Cheaper than the U.K., Limpo, Value for money, Too much Disney alike, Good Quality of life, European, Contínuos melhoramentos, Tourism, Tradição. Source: International Centre of Territory and Tourism Research, UALG. 12 Competitive Analysis Table 4: Main competing regions Competing Regions Mediterranean Spanish Coast (Andalucía, Valencia) Turkey Andalucía is shown to bear special interest although it is necessary to differentiate eastern and western Gibraltar. Within Portugal, Lisbon, Cascais and and Oeiras are referenced. Croatia United Kingdom Cascais/Lisbon Gibraltar Marroco Mediterranean Oeiras/Cascais Source: Data provided by equipment management entities;
International Centre of Territory and Tourism Research University of Algarve Figure 12: Berth rental fees, weekly rates during high season for 36 yachts 700 616.7 600 550.2 500 378.0 400 344.1 332.6 300 247.8 213.2 184.7 169.3 200 160.4 100 267.5 For berth rentals the region practices prices that are 15.1% lower in relation to its competitors. 0 ACI Marina Dubrovnik Turkey - Marti Marina Gibralter - Marina Bay France - Mole D Estienne d Orves Greece - Flisvos Marina Balearic Islands - Port Adriano Spain - Marina D Empuriabrava Puerto de Mazagón Andalucía - P. Dep. de Sotogrande Marina de Cascais Average Algarve Marinas Source: International Centre of Territory and Tourism Research, UALG based on www.marinadubrovnik.com, www.martimarina. com, www.marinabay.gi, www.port-de-saint-tropez.com, www.flisvosmarina.com, www.portadriano.com, www. marinaempuriabrava.com, www.puertosotogrande.com, www. marinacascais.pt and www.marinadeportimao.com.pt. 13 Figure 13: Yachts rentals, weekly rentals during high season for yachts 36-39 4.500 4.199 4.000 3.554 3.500 3.178 3.059 2.972 3.100 3.150 3.000 2.670 2.500 2.400 2.520 2.509 For yachts rentals, the region practices prices that are 4.0% higher in relation to the average standard exercised by competitors. 2.000 1.500 1.000 500 0 Croatia - Dubrovnik Turkey - Orhaniye Spain - Mazagón Spain - Empuriabrava Portugal - Cascais Gibraltar France - Côte D Azur Greece - Lavrion Spain - Ibiza Spain - Palma de Mallorca Algarve - Portimãol Source: International Centre of Territory and Tourism Research, UALG based on prices from Yachtfinder, BlueCharter, happycharter, SunSail and Costasur Espanha
The Socio-economic Profile and Potential of Nautical Tourism in Algarve Future Development Strategy Strategic Approach 1 Widen Internal and External Markets Increase in number of resident participants. Improvement in the efficiency of administrative processes. Domestic and international market expansion. 14 Strategic Approach 2 Intensifying and Expanding the Value Chain Development of d repair industry and boatbuilding. Market growth in wintering. Development of charter services. Strategic Approach 3 Destination Image and Integrated Communication Structuring of services and available supply options. Monitoring and Monitoring and communication communication of of yachting sector yachting sector through special through special chanels. Maintaining focus on events of international impact.
CONTACTS: Universidade do Algarve Escola Superior de Gestão, Hotelaria e Turismo Campus da Penha, 8005-139 Faro Tel: 00351 289 800 163 Fax: 00351 289 888 404 E-mail: citt@ualg.pt www.citt.ualg.pt Study available in http://www.ciitt.ualg.pt/z-gb-index.htm in the menu Research / Nautical Tourism in Algarve Comissão de Coordenação e Desenvolvimento Regional do Algarve Praça da Liberdade, 2-8000-164 FARO Tel.: 00351 289 895 200 00351 289 803 591 E-mail: geral@ccdr-alg.pt www.ccdr-alg.pt
16 The Socio-economic Profile and Potential of Nautical Tourism in Algarve