According to official data, over the past four years, the number of British tourists to the Canaries has decreased by 10%. British tourists are the most important contributing factor to the consumer market for these islands and that is why this decrease is so significant. The United Kingdom has one of the highest numbers of citizens who travel abroad and this number has been increasing for the past few decades, specifically in relation to the Canaries since the 1980s.

As we know, the tourism sector is affected by economic changes that occur in the country of origin, by geopolitical factors, etc.

The Canaries experienced their highest level of foreign tourist travel in 2001. Since then, however, the number has been decreasing. This tourism situation is not independent of the complex energy situation in the United Kingdom.

Prices of crude oil and gas continue to increase. The United Kingdom imports two thirds of its coal supply and is planning to close its outdated mines. Some of the country’s fourteen nuclear power plants are now at the beginning of a closing process caused by obsolescence. On the other hand, privatization is taking place, and there is now a housing bubble in Britain along with a massive increase in the debt ratio of its population, etc.... The Bank of England’s rising of the interest rate and the rise in the price of gas and other raw materials, as well as the increasing deficit of the British commerce, are over-shadowing this situation and indicating that a recession already exists.

The decline of the crude oil supply should mean a decline in global tourism revenue because of the decrease in the number of actual tourists. Global tourism depends on an energy and macro-economic stability which is increasingly in question with each rise of the price of crude oil. The Canaries reliance on both the tourism and construction industry as their primary source of income is taking its toll on the islands. Furthermore, forecasts predict that the situation may be getting worse.

British tourists are currently choosing “low cost” destinations, which are growing more popular by the day. They do not plan their holidays much in advance, but rather, wait for offers to appear.

It is evident that one of the consequences of choosing low prices is that tourists opt for “low cost” holidays. This is an apparently contradictory phenomenon because of the increase of energy prices. But there is nothing further from the truth. The International Air Transport Association, IATA, recently published a report revealing that fuel replaced labour as the highest single cost item for the global airline industry in 2006. This marks the first time ever that fuel costs have paced out that of labour. This trend will likely be worse in coming years as the price of crude oil continues to rise.

The air transport will continue to be a significant consumer of increasingly expensive energy.

Recently, TUI’s responsible in Gran Canaria said that ‘one hour of kerosene means a lot of money’. It is so simple. In a situation where you have an extraordinary amount of offers, again, the law of supply and demand rules: the peninsula, or other destinations, are able to offer lower transportation costs than the Canaries.

Offers are increasing. We can even talk about ‘very low cost accommodations’. As a result, there is a decline in the quality of offers today, and many resorts and hotels find themselves in a difficult situation if they refuse to play the low cost or “all inclusive” game.

We will see airlines mergers, as have already been announced with low cost airlines.

German, Dutch, Belgian and Austrian tourists are even greater users of these kinds of companies. The problem is that the Canaries are not an ideal choice for instituting low cost airlines because of various issues that contradict the business model: travel time, airport congestion, lack of public subventions, lack of two way flows justifying the creation of regular connections, etc.

Low cost companies charge the airports and tourist development authorities according the number of passengers they transport. Therefore, they are not interested in flying twice a day to the Canaries when that same plane could fly four times a day to Gerona (Catalonia).

What is happening today in Britain is a cyclical change. Those who read British papers will be quick to detect it: indications are coming one after another. We should not forget that Britain is a country at war, having the highest number of troops abroad after the USA, and this is clearly the result of its wish to access foreign crude oil and gas. Its army is technically bankrupt, as has been admitted in public. This powerful country is today a net energy importer, and this economic slow-down, following two decades of exponential growth, is affecting the average British public: increase in housing payments, the price of which has significantly increased, as well as home debt; and the consequent inflation, the increase of which is forcing the British central bank to raise interest rates. This “cyclical change” may be consolidating and there have been consequences already: British tourists opt for ‘low cost’ destinations which are becoming more popular; they do not plan their holidays much in advance, and they wait for offers to appear.