With a rich background in the travel and tourism industry, hospitality expert Katarina Railko has become a key voice in analyzing the forces that shape destinations. Today, she joins us to dissect the troubling divergence in Portugal’s Atlantic islands, where the Azores are facing a significant tourism downturn while Madeira celebrates a boom. We will explore the critical role of strategic funding, the far-reaching consequences of airline instability, and the urgent need for a cohesive vision to steer the Azores away from a potential crisis and toward a more resilient and prosperous future.
The article draws a sharp contrast between Madeira’s thriving tourism sector and the current decline in the Azores, attributing Madeira’s success to “consistent strategies.” From your perspective, what are the tangible, long-term policies Madeira has put in place that the Azores could learn from, and what results truly demonstrate their effectiveness?
Madeira’s success isn’t an accident; it’s the direct result of a steadfast, long-term commitment to its tourism sector. For years, they’ve implemented consistent public policies backed by robust and, crucially, predictable funding. This isn’t about a single good year of investment; it’s about sustained financial support that allows their destination management organization to plan ambitious, multi-year global campaigns without worrying the rug will be pulled out from under them. The proof is in the numbers: while the Azores see falling guest numbers and overnight stays, Madeira is enjoying exceptional gains. This consistent strategy creates a virtuous cycle, boosting visitor numbers and their spending, which in turn feeds back into public finances and reinforces the island’s competitive edge.
Given the chronic underfunding of VizitAzores, could you illustrate how this financial shortfall directly sabotages marketing efforts? Can you describe a type of campaign that likely gets shelved and what the lost opportunity looks like for key international markets?
The impact of these resource shortages is immediate and devastating. Imagine a meticulously planned digital marketing campaign designed to attract high-value eco-tourists from Germany or Scandinavia for the shoulder season. This campaign would involve targeted social media ads, partnerships with influential nature bloggers, and content showcasing the Azores’ unique volcanic landscapes and whale watching. But with the 2026 budget uncertain, that entire initiative gets put on hold. The direct effect is a sudden drop in bookings for small, sustainable lodges and tour operators who rely on that off-season income. The lost return on investment is enormous, not just in lost revenue for that season, but in the failure to build brand equity and capture a market segment that is less price-sensitive and more aligned with the islands’ core identity.
The article mentions that Ryanair’s departure threatens the entire “tourism supply chain,” which is a much bigger issue than just higher ticket prices. Could you walk us through the domino effect this has on the ground, perhaps using the example of a single local business?
Absolutely. The ripple effect is profound and cascades through the local economy. Let’s start with a small, family-run guesthouse that has historically seen a steady flow of European budget travelers from Ryanair flights. The moment those flights are canceled, their future bookings plummet. To survive, they have to cut their part-time cleaning staff’s hours. That staff member now has less disposable income to spend at the local grocery store. The guesthouse also cancels its weekly order of fresh bread and pastries from the neighborhood baker and reduces its laundry service. The local guide they recommended to all their guests for hiking tours suddenly loses a major source of referrals. It’s a chain reaction where one airline’s decision directly impacts employment and revenue for a whole network of interconnected small businesses that form the backbone of the tourism ecosystem.
With the privatization of both Azores Airlines and TAP creating so much uncertainty, what are the primary anxieties for tour operators trying to sell the Azores as a destination? How does this instability impact the logistics of planning something like a group tour?
For a tour operator, the number one enemy is unpredictability. The current uncertainty surrounding both airlines is a logistical nightmare. The primary concern is connectivity, both for getting international visitors to the islands and for the crucial inter-island flights. How can an operator in the U.S. or U.K. confidently sell a 10-day island-hopping package for a group of 30 people a year in advance? They can’t guarantee flight schedules, frequencies, or fares. This instability makes it impossible to finalize itineraries and lock in long-term contracts. The risk of sudden cancellations or drastic price hikes is too high, forcing them to steer their clients toward more stable and reliable destinations. It effectively puts a halt to a major segment of the market, particularly group tours and business-leisure travel, which are vital for sustained arrivals.
The Azores Chamber of Commerce and Industry is urging the adoption of a strategic vision similar to Madeira’s. If you were advising the government and private sector, what would be the first three concrete steps they should take to build and implement this new strategy, and what immediate results should they aim for?
First, they must secure a multi-year, substantial funding commitment for VizitAzores, benchmarked against Madeira’s investment levels. This isn’t just about the 2026 budget; it’s about creating a stable financial foundation for the next five years. The immediate, measurable outcome would be the launch of at least two major international marketing campaigns within nine months. Second, they need to establish a formal public-private tourism council, bringing the CCIA, airline representatives, hoteliers, and government officials to the same table to align on goals and coordinate efforts. The target here would be to publish a unified five-year strategic plan within six months. Finally, they must create a proactive airlift development program with clear incentives to retain existing airlines and attract new ones. The immediate goal should be to secure one new, stable European route for the upcoming peak season, demonstrating tangible progress.
What is your forecast for the Azores tourism sector over the next three years if these funding and airline issues are not urgently addressed?
If the current path continues, my forecast is unfortunately quite grim. We can expect to see an accelerated decline in visitor numbers and overnight stays, further widening the gap with mainland Portugal and competitors like Madeira. The destination’s brand will be significantly tarnished, perceived as unreliable and difficult to access, which will make future recovery even more challenging. This will translate directly into a tangible hit to the regional GDP, leading to the closure of small tourism-dependent businesses and a notable increase in unemployment. Without swift and decisive action, the Azores risk entering a downward spiral where a weakened tourism economy becomes a long-term structural problem for the entire archipelago.
