The German tourism market in Gran Canaria is like what the former president of La Caja de Canarias said in the trial for Bankia's listing on the stock market: "My mission was to attend the board meetings, I voted for what they told me." ". The same thing happens with the tsunami that would come to the south of Gran Canaria with the crisis of the German economy: no one wants to be prudent even though they originally called for restraint because in a matter of hours everything could blow up. The bursting of the price bubble at origin already generates data: 25% of German tourists now only buy accommodation and breakfast. Hoteliers in the south of Gran Canaria cross themselves because their beds are tied to insurance policies. But this financial safety belt is automatically canceled in the event of war and what underlies it is not exactly a price war but something broader and uncontrollable. In every hotel bed in the south of Gran Canaria there is a financial dynamite bed base.
While Maspalomas offers are experiencing more than double-digit price increases in travel agencies, Berlin tenants face the misery of high prices as the real estate crisis deepens and that can blow up arrival forecasts . When the German government predicts a decrease in inflation from 5,9% in 2023 to 2,8% this year, in Gran Canaria the increase in flight prices causes tourists to book 6 or 9 months in advance. Retirees have already abandoned the Gran Canaria destination because those over 60 years old, who previously were 50% of the business, are now only 29%. 60% come as a couple and the majority stay in four-star hotels. The room margin has grown by 25,7% while in Germany 3.000 travel agencies have closed in the last year.
The German government expects the economy to grow 0,2% in 2024, much less than the 1,3% previously forecast, as weak global demand, geopolitical uncertainty and persistently high inflation dampen hopes of a quick rebound. Europe's largest economy contracted 0,3% in 2023, making it the world's worst-performing major economy, and is widely expected to enter another technical recession in the first quarter of this year.
In Gran Canaria they are more optimistic about the German economy than the owners of German money. "The situation is challenging, extremely challenging," says Economy Minister Robert Habeck. Since 2019, when 874.742 Germans arrived in Gran Canaria, it continues to attract most of the 2,5 million German tourists who come to the Canary Islands. Germans stay on the island an average of 11,6 days. The German market currently represents 21,19% of the total turnover of the island tourism sector. In 2019 it amounted to 21,89% of the total. Meanwhile, the average expenditure per tourist is 1.638,59 euros, 31,84% more than in 2019 and 14,82% more than in 2022. Expenditure on accommodation alone is currently 777,28 euros for the German customer, with an increase of 33,95% compared to 2019 and 20,64% year-on-year, according to official data.
Germany is at a turning point. The German country has an inflation rate of 3,1% in the current year and is expected to drop to 2,2 in 2025, with GDP growth of 1,2%. In 2022, GDP had fallen for the first time in Germany since reunification. Instability is perceived both politically, with enormous difficulties in approving budgets, and economically and socially, with the proliferation of large strikes. This is reflected in the tourism sector, according to Gran Canaria tourism experts. They also highlighted the unrest in immigration policy, something that has favored the rise of the extreme right.
In 2024 it seems that the contracting of the tourist package will recover. The surveys conducted by Turismo de Gran Canaria indicate that online sales grew by 20% and that the 3.000 travel agencies were forced to close. Tour packages are on the rise in the German market. They account for 35% of the tour operators' total sales. The challenges of high inflation and the resulting loss of purchasing power, as well as geopolitical crises and interest rate increases. German GDP growth is highly dependent on global trade. World trade is developing at a historically low level.
