Study on the Socio-economic Nautical Tourism

Nautical Tourism

Study on the Socio-economicProfile and Potential of

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

Nautical Tourism

International Centre of Territory and Tourism Research

University of Algarve

Comissão de Coordenação e Desenvolvimento Regional do Algarve

June 2009

Study on the Socio-economicProfile and Potential of

in 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.

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

5

International Centre of Territory and Tourism Research | University of Algarve

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.

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

6

Intr

oduc

tion

The

yach

ting

sec

tor

in A

lgar

ve

Demand

Supply

Ana

lysi

s of

Co

mpe

ting

Mar

kets

Prof

ile, I

mag

e an

d Ec

onom

ic Im

pact

s Strategic Lines of Approach

Actions

S1 S2 S3

Conc

lusi

on

Appendix

Bibliography


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.

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.

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%).

7

Supply Analysis

Figure 1: No. of berths in Algarve in 2009

465

620

240

74 64 96

475

953

246

347

500

200

400

600

800

1.000

1.200

M. de Lagos M. de Portimão

P. de R. do Clube Naval de Portimão

Doca de S. Francisco

Cais de Bartolomeu

Dias

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

Source: Data provided by equipment management entities.

Figure 2: Evolution of the total no. of berths in marinas and recreational ports in Algarve from 1974-2012

1.000

2.000

3.000

4.000

5.000

6.000

1974 1984 1994 1997 2000 2003 2004 2005 2012 Forecast


Figure 3: Relative distribution of berths according to contracts equal or greater than one month during 2007

5 and 10 years:35.6%

1 year:45.3%

9 months:7.3%

6 months:3.1%

3 months:1.0%

1 month:7.8%


new marina of Ferragudo and expansion of the port of VRSA


8

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.

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.

Figure 4: Relative distribution of contracts equal or greater than nine months during 2007

81.3%

59.5%

29.5%

10.1%

25.0%

31.1%

1.5% 3.9%

23.0%

1.8% 3.9% 9.8%

2.8%3.0% 3.3%

0.3% 0.7% 3.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

5 and 10 Years Contract 1 Year Contract 9 Months Contract

Others

Spain

Italy

Germany

France

Netherlands

United Kingdom

Portugal


Demand Analysis

Figure 5: Monthly average occupation rate of marinas and recreational ports vs classified accommodation during 2007

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec.

Marinas / Recreational Ports -2007

Hotel Industry - 2007


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.

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).

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

9


Figure 6: Entries in marinas and recreational ports vs overnight stays in classified accommodation establishments during 2007

0

500

1000

1500

2000

2500

3000

0

500000

1000000

1500000

2000000

2500000

3000000

Jan. Feb. Mar. Apr. Mai. Jun. Jul. Aug. Sep. Ouc. Nov. Dec.

Ov

ern

igh

t S

tay

s

No

. of E

ntrie

s

Overnight Stays No. of Entries

Source: Data provided by equipment management entities; National Institute of Statistics

Figure 7: Yachts Country previous destination before Algarve

52,8%

3,8% 1,9%

34,0%

7,5%

0%

10%

20%

30%

40%

50%

60%

Spain France Netherlands Portugal United Kingdom

Source: International Centre of Territory and Tourism Research, UALG.

Figure 8: Country of permanent residence of crew members

19,2%

27,6%

3,4%1,7%

5,2%

17,2%

20,8%

1,7%3,4%

0%

5%

10%

15%

20%

25%

30%

Portugal Spain France Ireland Germany Netherlands United Kingdom

Sweden, Norway, Finland

Other



10

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.

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.

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%

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%

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


Figure 9: Average per diem expenditure per category, excluding berthing and running costs

63.6%

13.3%

6.6%

4.8%

11.0%

Food, Drinks and Tabacco

Boat Fuel

Internal Transports (rent-a-car)

Domestic and Decoration Products

Others


The need for more service locations (boatyards) is shared by the majority of boaters who visit Algarve.

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.

11


Figure 10: Identified needs by yachters for more berths in marinas and/or recreational ports, boatyards and moorings

Yes:54.5%

Yes:67.4%

Yes:69.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Marinas and Nautical Ports

Boatyards Moorings


Table 2: Total demand impact of marinas and recreational ports of Algarve


Provision of Nautical Services

Figure 11: Average rating of nautical services (1=poor to 5= very good)

4,13

3,94

3,93

4,71

3,55 3,50

4,38

4,18

4,00

1,01,52,02,53,03,54,04,55,0

Hull cleaning, painting

Electronic & Electrical Engineering

Sail Repairs

Fibreglass Services

Carpenter Chandlery

Upholstery

Marina's Security

Overall evaluation of the services


Impact Direct and indirect effectsDirectos, indirect and

induced effects

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%


12

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.

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.

Image Analysis

Table 3: Image of Algarve assessed according to keywords


Competitive Analysis

Table 4: Main competing regions

Source: Data provided by equipment management entities;

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.

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.

Competing Regions

Mediterranean Spanish Coast (Andalucía, Valencia)

Turkey

Croatia

United Kingdom

Cascais/Lisbon

Gibraltar

Marroco

Mediterranean

Oeiras/Cascais

Figure 12: Berth rental fees, weekly rates during high season for 36’’ yachts

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.

Figure 13: Yachts rentals, weekly rentals during high season for yachts 36’’- 39”

Source: International Centre of Territory and Tourism Research, UALG based on prices from Yachtfinder, BlueCharter, happyCharter, SunSail and Costasur Espanha

For berth rentals the region practices prices that are 15.1% lower in relation to its competitors.

700€

600€

500€

400€

300€

200€

100€

0€

378.0€

184.7€ 169.3€

616.7€

247.8€213.2€

344.1€

160.4€

550.2€

332.6€267.5€

ACI Marin

a Dubro

vnik

Turkey - M

arti M

arina

Gibra

lter -

Marin

a Bay

France

- Mole D

’Estienne d’O

rves

Greece

- Flis

vos Marin

a

Balearic Is

lands - Port

Adriano

Spain - Marin

a D’Em

puriabrava

Puerto de M

azagón

Andalucía - P

. Dep. d

e Sotogra

nde

Marin

a de Cascais

Average A

lgarve M

arinas

For yachts rentals, the region practices prices that are 4.0% higher in relation to the average standard exercised by competitors.

13


4.500

4.000€

3.500€

3.000€

2.500€

2.000€

1.500€

1.000€

500€

0€

3.178€ 3.059€

3.554€

2.400€ 2.520€2.670€

2.972€

2.509€

4.199€

3.100€ 3.150€

Croatia

- Dubro

vnik

Turkey - O

rhaniye

Spain - Maza

gón

Spain - Em

puriabrava

Portugal -

Cascais

Gibra

ltar

France

- Côte

D’Azu

r

Greece

- Lavrio

n

Spain - Ibiza

Spain - Palm

a de Mallo

rca

Algarve - P

ortim

ãol


14

Future Development Strategy

Widen Internal and External Markets

Strategic Approach 1

Increase in number of resident

participants.

Improvement in the efficiency of administrative

processes.

Domestic and international

market expansion.

Intensifying and Expanding the Value Chain


Development of d repair industry and

boatbuilding.

Market growth in wintering.

Development of charter services.

Destination Image and Integrated Communication


Structuring of services and

available supply options.

Monitoring and communication of

yachting sector through special

Maintaining focus on events of international

impact.

Intensifying and Expanding the Value Chain


Development of d repair industry and

boatbuilding.

Market growth in wintering.

Development of charter services.








impact.








impact.

Monitoring and communication

of yachting sector through special

chanels.

Study available in http://www.ciitt.ualg.pt/z-gb-index.htm in the menu Research / Nautical Tourism in Algarve

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: [email protected] | www.citt.ualg.pt

CONTACTS:

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: [email protected] | www.ccdr-alg.pt


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Study on the Socio-economic Nautical Tourism