Cheaper travel may help the Tenerife economy.

 Families can expect to save several hundred pounds a year because airlines  are being forced to discount prices.

Cheaper travel may help Tenerife's economy

Cheaper travel may help Tenerife's economy

Holidaymakers can look forward to a decade of cheap travel because of the global recession, according to industry experts so for those who rent out property in Tenerife this is great news. 

 

One company estimated that the average British family spent nearly £2,092 on a holiday this year than a fall of £257 compared to 2007.

According to a Euromonitor the fall in spending has been due to families economising, staying in less comfortable surroundings and hunting for cheaper flights. In turn, this has led to companies discounting heavily as they try to cope with the dramatic drop in travel.

As a result, Euromonitor says, prices were 20-30 per cent lower this year than last and the trend is set to continue for a decade, said Caroline Bremner, the head of the research team. “People have been trading down,” she said. “The industry is caught in a vicious circle of discounting. “It will be hard to bring prices back up, even when there is a recovery, because people have got use to discounted prices.” The impact of the recession was outlined at the start of the World Travel Market in London’s docklands.

Ms Bremner also believes that Britain is set to follow America where the travel industry is now catering to the “funemployed” - people who, having lost their jobs, are spending their redundancy pay on the holiday of a lifetime.

Companies are offering discounts to the new army of jobless, using slogans like “laid off, take off” to win the business.

Package holidays had been on the wane with the increasing use of the internet and holidaymakers booking do-it-yourself holidays, hunting for the cheapest flights and accommodation. So if you have a property to rent or let for holiday or longer term, providing your price point is correct you should reap the rewards of this new era

Less tourists visit Spain.

Less people in Spain and Tenerife mean some empty beaches.

Less people in Spain and Tenerife mean some empty beaches.

Usually during the height of the summer tourist season the main beach at Torremolinos on Spain’s Costa del Sol is packed with sunseekers, but despite the clear skies and soaring temperatures, row after row of sun beds this year lie empty. Above the beach, business at the bars, restaurants and stores selling bright red souvenir flamenco dresses and Real Madrid jerseys that line the boardwalk is slow with many outdoor patios deserted. Some shops are closed for repairs.

“This is the worst I have ever seen it. There is no one on the beach,” said Pedro Hervas who has sold freshly squeezed orange juice from a stand in the shape of a large orange installed on the boardwalk for the past two decades. “If you came here last year at this time you would not be able to get around, there would be so many cars and people,” the 57-year-old added as he pointed to the road and beach in front of his stand.

Spain is feeling the pinch of a drop in visitors, especially from Britain, its main source of tourists, as the recession leads northern European sunseekers to take their holidays at home this year or choose cheaper beach destinations like Egypt or Turkey. Tenerife has also been hit, but not as hard.

The drop in the pound to near parity with the euro has fueled the decline in the number of British tourists, who account for one-quarter of all visitors to Spain, as it has made spending a few days in the sun at Mediterranean resorts like Torremolinos, Benidorm , Ibiza  and the Canary Islands more expensive.

During the first half of the year Spain received 23.6 million foreign visitors, an 11.4 per cent drop over the same time last year, according to ministry of tourism figures. The number of British tourists fell 16.3 per cent during the period to 6.1 million. The Government predicts the number of foreign visitors to the country during the summer, which it defines as July, August and September, will drop by 10 per cent. The tourists who are coming are spending less than in other years, adding to the financial pain of shop and hotel owners.

Robert Downey, a 57-year-old former Glasgow taxi driver who runs a pub with a seafaring theme that serves fish and chips in Torremolinos with his wife, said his business is down between 30 and 40 per cent this year. “People used to come in at 9 o’oclock at night and have four or five drinks. Now they are coming in at 10 o’clock and having just two or three drinks. Many people are worried,” he said as he stood behind the counter of his empty bar.

Foreign visitors to Spain spent 20.9 billion euros (A$35 billion) during the first six months of the year, a 7.6 per cent drop over the same time in 2008, according to the tourism ministry.

Spain’s tourist sector accounts for around 11 per cent of all jobs and the decline in the number of foreign visitors comes as the country is in its steepest recession in decades following the collapse of its property market. Last year the country lost its spot as the second-most visited destination in the world to the United States, according to the Madrid-based United Nations World Tourism Organization. France has long been the number one destination.

Tourists began trickling into Spain after the United Nations lifted its sanctions against the country and its right-wing dictator, General Francisco Franco, in 1950. The trickle turned into a flood after the Franco regime in 1959 simplified the procedures for passport visas and customs controls in a bid to aid the development of the tourist sector.

The influx turned many seaside fishing villages that dotted Spain’s coast into concrete jungles of tower blocks which drew millions of northern Europeans on package holidays. Analysts say the dent in Spain’s tourism business is also due to a long-term shift away from these sort of sun and sea holiday packages which the country pioneered as people increasingly depend less on major tour operators and make their own independent bookings over the Internet.

Prime Minister Jose Luis Rodriguez Zapatero’s Socialist Government has responded by offering one billion euros to help the sector modernise its infrastructure as well as tax breaks and fee waivers for airlines and hotels. It has also wants to seek out new markets and diversify its traditional sun and surf tourism by boosting its focus on urban and cultural tourism.

Spain’s tourism promotion body has staged a series of “A Taste of Spain” events across Britain in recent months that showcase Spanish culture and food. Despite the recent decline in visitors, Trevor Davis, the director of retail distribution at The Co-operative Travel, Britain’s largest independent travel agency, does not think the British are starting to permanently turn away from the country as a holiday destination. “Absolutely not. We fully anticipate Spain will bounce back when the pound strengthens,” he said.  If this proves to be the case, then buying a property now in Tenerife may be a smart investment move.

Brits still looking to purchase abroad though on smaller budgets

Brits searchibg for property in Tenerife though with less cash.

Brits are still searching for property in Tenerife though with less cash.

Brits looking to buy abroad have slashed their budgets by over £50,000 in the last year, according to portal PropertyIndex.com, with the average price of property enquired about now at £199,284 in March 2009, compared to £253,435 in March 2008…

However, the  number of overseas property viewings via the internet in March rose, following a dip at the end of 2008, showing that the aspiration remains for Brits to buy property abroad despite the global downturn.

While Brits looking to buy overseas have less money to spend, they are still seeking the same type of property as they did a year ago - predominantly one and two-bedroom apartments in coastal locations, within a two-hour journey of an airport.  This makes Tenerife extremely attractive given its virtual all year round sunshine.

Buyers are watching the market carefully and waiting for the right moment to buy, and there are signs that this time is approaching as the pound strengthens against the Euro and price falls slow.

Brits aspire to own property overseas , although they have less money to spend and are seeking the best possible value for money. During the boom years, owning a home abroad became a mass market and that dream is not going to disappear overnight.

However, buyers are aware that property prices have fallen across the globe over the last twelve months, and they are determined to take advantage of this by securing the same type of property for  less than they would have paid a year ago.

Internet to replace mortgage brokers?

In response, Evaluate Technologies has said advisers need to work with the internet and not against it if they are to continue to hold an active role in sourcing mortgages for their clients.

The internet may be used to find a mortgage for your property purchase in Tenerife

The internet may be used to find a mortgage for your property purchase in Tenerife

The Internet could replace the need for mortgage brokers as the preferred distribution channel in the future, according to new research…

Recent research conducted on behalf of financial outsourcer Opal suggested that the internet and electronic channels were likely to surpass mortgage brokers as the preferred distribution channel.

However, Evaluate claims that only those brokers with a distinct lack of vision will be hampered by future technological evolution.

With services such as online shopping, researching and comparing become ever more popular, Evaluate has urged advisers to embrace these changes in consumer habits by marketing themselves at those consumers who expect to play a more active role in the mortgage and financial services sourcing process.

According to data from Forrester Research, around 28 million UK consumers already shop online and that figure is set to jump to 37 million by 2014 - the equivalent of £56 billion in value.

The research added that UK consumers are leading the online shopping trend, with spending reaching around £1,312 per person per year.

Julie Speed, National Accounts Director at Evaluate Technologies, said, “Firms operating in the mortgage market have to look at what is happening around them and realise how powerful a tool the internet really is and work with it not against it.

“There will always be a need for advice as house buying remains the biggest commitment there is but there is growing evidence that people are looking to take a more active role in the sourcing and comparison process.”

Speed added: “The amount of time being spent online is growing at a huge rate and for the mortgage market to be so behind the rest of the financial service industry in the utilisation of this technology is nothing short of staggering.

“There is still time to make changes to firms outlooks and models but these must be done soon to really maximise the huge potential that the internet can add to brokers offerings.”

Long and Short Term Rental investors gain in Tenerife

Rental Invetsors gain in Tenerife

Rental Investors gain in Tenerife

A change in holiday habits and trends has helped make Tenerife rentals a great investment choice.  Tenerife, in the Canary Islands is the most popular winter getaway destination from the UK, beating the likes of Barbados, Egypt, Dubai and Goa. Rental investors have noticed that the growing popularity of the private holiday rental has had a major, positive effect on the profitability of property investments on Tenerife and the Canary Islands.

The demand for package holidays has receeded and is being  replaced by the growth of the independent traveller.  Technology, the internet in particular, has been a major influence on our ability to be different.

The real winners in this attempt to be seen as different, are the owners of investment property.   The majority of owners are very optimistic about their projected earnings over the coming year, expecting an increase on the previous one.

This change in holiday habits is already having an effect on the property market in Tenerife.  As demand rises for privately rented holiday accommodation, so supply follows closely on its heels.  Increasing numbers of buyers are now listing rental income as an important factor in their purchase.  The BBC recently showed a documentary on the subject and papers are running articles on Tenerife rentals.

Of course, not every property is suitable for such an investment.  Tenerife investors need to take care in selecting the right property for the best returns, and the minimum problems.  There are many factors to be taken into account, from the type of holidaymaker or long term rental you might expect in the area you are considering, to the rules of the specific community of owners.  With experience of the market, a well established and reputable estate agent will be able to advise and assist you.  Needless to say, choosing which agent you use is of paramount importance to the success of your investment, so look for one which is long established with a good track record (recommendations are always a positive sign).  Correct business advice should lead to  lucrative business in Tenerife.

Good news for Tenerife and Spain?

The number of Britons looking to emigrate to Spain has increased by 12 per cent, according to new figures…

Data released by the Spanish Government has revealed 352,000 Britons were registered as living in the country at the start of 2008, the Guardian reports.

And the statistics showed a large proportion were younger residents, with only one third being aged over 55.

The recent drop in the value of the pound compared to the euro is also unlikely to cause a drop in the number of Britons looking to make the move, the newspaper stated.

Some people have had to head back to Britain recently but the impression is still that there are lots more just waiting for things to change so they can come over.

A recent survey by Globaledge revealed that Spain is the most popular overseas property destination among English-speaking internet users, beating second-placed France by a ratio of over two to one.