Economy of Tenerife

Tenerife is the economic capital of the Canary Islands.Even though Tenerife’s economy is highly specialized in the service sector, which makes 78% of its total production capacity, the importance of the rest of the economic sectors is key to its production development. In this sense, the primary sector, which only represents 1.98% of the total product, groups activities that are important to the sustainable development of the island’s economy. The energy sector which contributes 2.85% has a primary role in the development of renewable energy sources. The industrial sector which shares in 5.80% is a growing activity in the island, vis-a-vis the new possibilities created by technological advances. Finally, the construction sector with 11.29% of the total production has a strategic priority, because it is a sector with relative stability which permits multiple possibilities of development and employment opportunities.

Tourism

Tourism is the most prominent industry in the Canaries, which is one of the major tourist destinations in the World.

In 2005, 9,276,963 tourists (excluding those from other parts of Spain) came to the Canary Islands. Tenerife had 3,442,787 arrivals that year, excluding the numbers for Spanish tourists which make up an additional 30% of total arrivals. According to last year’s Canarian Statistics Centre’s (ISTAC) Report on Tourism the greatest number of tourists from any one country come from the United Kingdom, with more than 1,600,000 tourists in 2005. In second place comes Germany followed by Belgium, the Netherlands, Sweden, Finland, Denmark, Norway, Italy, France, Austria, Ireland and Switzerland.

Tourism is more prevalent in the south of the island, which is hotter and drier and has many well developed resorts such as Playa de las Americas andLos Cristianos. More recently coastal development has spread northwards from Playa de las Americas and now encompasses the former small enclave of La Caleta. After the Moratoria act passed by the Canarian Parliament in Santa Cruz de Tenerife, no more hotels should be built on the island unless they are classified as 5 star-quality and comprise different services such as Golf Courses or Congress facilities. This act was passed with the goal of improving the standard of tourism service and promoting environmentally conscious development.

The area known as Costa Adeje (Las Américas-Los Cristianos) has many world-class facilities and leisure opportunities besides sea and sand, such as quality shopping centres, golf courses, restaurants, waterparks, animal parks, and a theatre suitable for musicals or a Congress Hall.

In the more lush and green north of the island the main development for tourism has been in the town of Puerto de la Cruz. The town itself has kept some of its old-harbour town charm mixed with northern European influences. Still, the tourist boom in the 1960s changed the outlook of the town, making it cosy and cosmopolitan at the same time, and a favourite for the more mature traveller (notably the German and Spanish tourist).

In the 19th and most of the 20th century large numbers of foreign tourists came, especially British, showing interest in the agriculta of the islands. With the world wars, this sector weakened, but the start of the second half of the century brought new forms of tourism. At first emphasis was on Puerto de la Cruz, for the kindness of the climate, and for all the attractions that the Valle de la Orotava concentrated, but following the attraction of the sun and beaches, around 1980 was born the tourist boom of south Tenerife, where emphasis was on cities like Arona or Adeje, shifting to tourist centres like Los Cristianos o Playa de Las Americas, that today house 65% of the hotels that were on the island. Tenerife receives more than 5,000,000 tourists every year, of the canary islands Tenerife is the most popular. However, this data also reflects the large quality of resources that tourism consumes (space, energy, water etc.)

Tenerife offers for tourists

Agriculture and fishing

Since tourism dominates the Tenerifian economy, the service sector is the largest, but industry and commerce contribute 40% of the non tourist economy.[65] The primary sector has lost its traditional importance in the island, to the industrial and service sectors. Agriculture contributes less than 10% of the island’s GDP, but its contribution is vital, as it also generates indirect benefits, by maintaining the rural appearance, and supporting Tenerifian cultural values.

Agriculture is centred on the northern slopes, and is also determined by the altitude as well as orientation: in the coastal zone, tomatoes and bananas are cultivated, usually in plastic enclosures, these high yield products are for export to mainland Spain and the rest of Europe; in the drier intermediate zone, potatoes, tobacco and maize are grown, whilst in the South, onions are important.

Bananas are a particularly important crop, as Tenerife grows more bananas than the other Canary Islands, with a current annual production of about 150,000 tons, down from the peak production of 200,000 tons in 1986. More of 90% of the total is destined for the international market, and banana growing occupies about 4200 hectares. In order of importance; after the banana, come tomatoes, grapes, potatoes and flowers. Fishing is also a major contributor to the Tenerifian economy, as the Canaries are Spain’s second most important fishing grounds.

A banana plantation from Tenerife

Industry and commerce

Commerce in Tenerife plays a significant role in the economy which is enhanced by tourism, representing almost 20% of the GDP, with the commercial center Santa Cruz de Tenerife generating most of the earnings. Although there are a diversity of industrial estates that exist on the island, the most important industrial activity is petroleum, representing 10% of the island’s GDP, again largely due to the capital Santa Cruz de Tenerife with its refinery. It provides petroliferous products not only to the Canaries archipelago but is also an active in the markets of the Iberian Peninsula, Africa and South America.

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