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The Azores: the Challenge of Maintaining Growth While Avoiding Fast-Food Tourism

4 December 2017

There are both opportunities and risks to tourism in a region where the sector has grown by double digits over the last two years. The solution is to remain an authentic and genuine destination.

Tourism in the Azores is changing. Since 2014, growth has been sustained by the liberalisation of airlines, and in the last two years it has been growing by double digits. Also, according to Filipe Macedo, the regional director of Tourism of the Azores, the type of visitor to the archipelago has been changing. While before tourism was mostly based on organised tours, now there are more independent tourists who see the area in a different manner. More: Germany is no longer the only real issuing market, with more visitors coming from the US, Spain and the Netherlands. That is why tourism in the Azores is at a critical turning point: or evolves into a volume-based, ‘fast-food’ model, which would de-characterize the region, lowering its competitiveness, or it could remain an authentic and genuine destination in the same mould as it always has and that, above all, led the archipelago to grow at double-digit rates during the last two years.

Judging by the opinions of the speakers at the fourth edition of the “Insurance: The New Challenges” conference, organised by Tranquilidade/Açoreana and Expresso, in which the challenges and opportunities of tourism in the Azores were discussed this Wednesday, the answer is simple: mass tourism cannot be the way ahead.

“The Azores may not want to have units from the big hotel chains, may not want to fill the islands with fast food restaurants, it cannot accept restaurants that have photographed menus or hawkers at the door, it can’t have the ambition to receive large numbers of groups … The best strategy for the Azores is not to become a [mass market] tourist destination because that way it will lose its differentiating factors,” said the CBK group administrator, João Welsh, who took part in the debate. “We have to put the Azores on the right international map, which is not Praia da Rocha (an over-developed beach in the Algarve) or Zezé Camarinha (aka Macho Man),” he said in a presentation he made at the start of the conference, noting that it would be essential to create an Azores brand to achieve this. “What is considered the Apple of the Atlantic? We have to make it the Azores!”

Authenticity and nature

Those two speakers have no doubt, “we have to preserve ourselves as a unique and different destination,” said Miguel Muñoz Duarte. That is, the Azores “have to go looking for tourism that is focused on nature”, which maintains the authenticity and genuineness that have always characterised them, said João Welsh. Incidentally, the CEO of Tranquilidade/Açoreana, Jan de Pooter – a Dutchman living now in Portugal – believes that the Azores have considerable potential, comparable to New Zealand, where tourism promotion is mostly made by the authenticity of the landscape and by experiences in nature.

It is essential to educate people and give them adequate remuneration to achieve these goals, not only for the work they do to boost tourism but also for the growth it will bring to the region. And, according to John Welsh, it is vital that there be an ability to say ‘no’ while planning the infrastructure that is beginning to become necessary because of the growth in tourism. “We have to be careful to avoid any euphoria,” he said. Filipe Macedo, another of the participants, assured that this is also the path that the Regional Directorate of Tourism wants to follow, not just in its marketing, but also in infrastructure planning, which is being adapted to the growth of tourists in a measured way.

“The Azores are characterised by having small and medium-sized units and by the information we have regarding new, approved licenses, that will continue. The number of hotels is expected to grow by 12%, but the growth of local accommodations and tourist apartments is expected to be 67%, with a 52% growth in rural tourism,” he stated, noting that “we are not worried.” Also, in recent years there has been a change in the Directorate General of Tourism’s type of marketing. “It was a based on contemplative tourism, and we have now migrated to marketing tourism based on experiences. Happy cows would be a good motto, in that we have defined nature-based tourism as the focus of our marketing,” he stated.

A lot more to grow

To say ‘no’ to megalomaniacal constructions or a disproportionate growth of supply, for example, of local accommodation does not mean a brake on growth. Even considering that the Azores have woken up late for the tourism party, and still have a lot to grow and to promote. “We are talking about growth on a very limited basis. We had less than two million overnight stays in 2016. It is a quarter those in Madeira,” Filipe Macedo noted, adding that the Azores are not limited to São Miguel and Terceira, the most visited islands, but encompass an archipelago of nine islands.

Besides, tourism in the Azores is far from being consolidated. According to Isabel Barata, executive director of the Azorean airline Sata, there is still a high level of seasonality, which must be tackled, for example, by promoting other types of activities, such as volcanism. Or, John Welsh suggested, to find ways in which to increase the duration of the high season.

“It’s not worth creating specific packages for the off-season. We have to make the high season more elastic and, instead of three months, extend it to four, and then five months,” he concluded.

Lacks Major Portuguese And International Hotel Chains

Tourism in the Azores has seen a significant increase in recent years. According to information from the National Statistics Institute (INE), overnight stays grew by 18% in 2015, 21.1% in 2016 and everything indicates that this year will see an even more significant increase, according to data provided by the Regional Statistics Service Azores, more people stayed on the archipelago in the year to August than had stayed in all of last year. But despite the benign current scenario, there are still constraints, that is, growth could perhaps be even higher. One of them is the fact that you only get to the Azores by plane, though there are now more low-cost options. Another is the lack of major national and international chains that would help market the destination to a more substantial number of customers and more nationalities. At the moment, 59% of the tourists who visit the region are foreigners, mostly from northern Europe, namely Germany. But the Regional Secretariat for Energy, Environment and Tourism wants to attract more nationalities, from places such as the United States, Spain, France and Canada. This is one of the challenges that face the Regional Government which is also aiming to promote the archipelago’s central islands and increase the length of the high season.

From the Horse’s Mouth

“Where is considered the Apple of the Atlantic? We have to make it the Azores! We have to put the Azores on the right international map, which is not Praia da Rocha  or Zezé Camarinha.”

Miguel Muñoz Duarte – Professor at the Nova School of Business

“The best strategy for the Azores is not to become a [mass market] tourist destination. The Azores cannot accept fast food restaurants and hawkers. We shouldn’t go after large tourist groups, but instead, focus on eco-tourism.”

João Welsh – Group administrator CBK

“The Azores are characterised by having small and medium-sized units and by the information we have regarding new, approved licenses, that will continue. We are not worried.”

Filipe Macedo – Regional Director of Tourism of the Azores

Five Industry Trends

Responding to digital immediacy

Digitalisation and technologies, whether a simple smart-phone app or the most advanced ones like the Internet of Things are a challenge for any sector or business, and tourism in the Azores is no exception. One of the factors that the region will have to adapt to is that, with the advent of the digital economy, tourists demand everything “here-now-immediately”, that is, there is more immediacy and companies in the sector have to know how to respond to that.

Today, the digital reality brings another challenge: data processing. But in the future, will be the use of the data that the companies gain from contact with tourists. That is where the innovation in the sector is likely to be focused.

The Azores have stood out in the Portuguese tourism sector for its authenticity and natural characteristics, and the tendency will be to continue to maintain those facets of the archipelago. But it is also important to highlight the region’s security, which will increasingly be an essential factor in the choice and experience of tourists, especially with the growth of terrorism.

Invest in training personnel

Even with the looming threat of robots and automatons, people will always be vital in defining experiences in tourism and, therefore, it is necessary to recruit, retain and take advantage of the right people, and those are employees will be people who have a culture and quality of excellent service. However, it not easy to find these kinds of employees because there is still an insufficient amount of training in the sector that is up to the current standards which, as already mentioned, are more immediate. That said, we need to invest more in training.

21.1 percent.

According to data from the INE, in 2016, the Azores had the highest growth in overnight stays in Portugal: 21.1%. And this year is continuing the trend, especially in traditional hospitality, which is the first choice of tourists. Data from the Regional Statistics Service of the Azores point to almost 1.3 million overnight stays in the year to August, more than the million that stayed all last year.

Original Story: Expresso – Ana Baptista

Translation: Richard Turner