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Cape Verde, an archipelago swept by favorable tourism winds

The Republic of Cape Verde, a small windswept archipelago located in the Atlantic Ocean, seems like a political and economic haven in Western Africa. This has allowed it to fully develop its tourism industry, the country's leading contributing sector, and to affirm its position as a favorite seaside destination for Europeans.

Islands open to the four winds

Cape Verde is an archipelago consisting of 10 islands and eight islets, located in the Atlantic Ocean off the coasts of Senegal, Mauritania and Gambia. With a surface area of 4,000 km², the string of islands has more than 500,000 inhabitants. In the North, among the Barlavento islands (the windward isles), Santiago is home to the country’s capital, Praia, while the Sotavento islands (the leeward isles), constitute the southern part of the archipelago.

Because of its geographic location and minimal resources, Cape Verde is particularly isolated and depends economically and financially on foreign countries. After strong growth until 2011, the country was nonetheless affected by the economic slump of the European Union, and especially that of its key partners Spain and Portugal. Its growth dropped from more than 4% in 2011 to 1% in 2013 and rose to 2% in 2014, with renewed growth expected in 2015. In addition the primary sector only represents 8% of the GDP in the archipelago, while the services sector dominates, generating close to three-quarters of the nation’s wealth. The country also must manage structural weaknesses, particularly due to a high level of unemployment (more than 16%), especially among young people, and infrastructures that are not very well developed.

Despite headwinds, today the country appears to be one of the most dynamic and most politically stable countries in West Africa. Formerly a Portuguese colony, Cape Verde gained its independence in 1975, and then enjoyed political stability and voluntarism that allowed it to develop economically. The constitution of a solid government, with a focus and strategic objectives, as well as monetary discipline and  good governance have allowed the Cape Verde islands to make up for insufficient resources, and post one of the highest GDPs in Africa.

The tourism sector was an integral part of development plans: today it is one of the leading economic sectors in the country, generating close to 21% of national wealth. Cape Verde relies on its climate and the variety of its islands and landscapes for its positioning as a sunny beach resort destination. It also valorizes its culture which is strewn with European and African influences. The islands of Sal and Boa Vista, each of which hosts one of the archipelago’s four international airports, are highly prized for their desert landscapes and their exotic beaches of fine sand. Sao Vicente is known for having one of the finest cities in the archipelago, Mindelo, where nightlife is particularly eventful. Santo Atao stands out among the other islands with their stark landscapes for its luxurious vegetation which offers many possibilities for hiking, while Santiago, where the capital Praia is located, is more propitious to historic tourism, with the first village founded by the Portuguese. Finally, the island of Fogo is the only one that has an active volcano, which is the highest point in the archipelago. The different islands may be reached by air or ferry.

Cape Verde is an African destination that is protected and safe for tourists. International clientele – mostly European – constitute most arrivals, representing more than 95% of nights realized in 2014. British tourists have the strongest representation, generating 839,500 nights, or close to one quarter of all nights. German tourists follow with 15% of nights, followed by Belgium and the Netherlands which combine for 385,700 nights (11.3% in all). These three nationalities increased significantly between 2010 and 2014. Portuguese tourists are naturally drawn to Cape Verde, and account for 9.3% of nights, just ahead of French (8.4%) and Italian (5.8% of nights) tourists, the latter market has shrunk significantly since 2010 (-28%).

A rapidly developing hotel supply

In 1975, a time of independence, the archipelago had only one hotel in the capital. In 2015, according to data from the Ministry of Tourism, the country of Cape Verde has a total of 226 properties and 10,626 rooms. Mostly in hotels, this supply also includes a few pensions, residences and aparthotels. The accommodations supply experienced rapid growth by 80% in the last five years for 4,735 additional hotels and more than doubled in the course of a decade. Nonetheless, the figure stabilized in 2015, when the park shrank for the first time by 2%.

The hotel supply is concentrated in the country’s two primary tourist destinations: Sal has half the national supply with more than 5,000 rooms (having doubled its capacity in ten years), and Boa Vista has one quarter of the supply, or 2,600 rooms. Boa Vista’s supply grew the most in the decade 2005-2015: it grew by 2,000 rooms in ten years, and currently has the second largest hotel supply in the archipelago. Santiago has 11% of the country’s hotel capacity, due to the presence of the capital Praia, and Sao Vicente 7.4%. The other islands in the archipelago have less than 3% of the supply.

The independent supply is mostly located in the windward isles of the archipelago, while corporate chains represent 44% of the total supply, for 4,680 rooms at 9 properties, according to data from Hospitality ON. All of these chain-operated properties are concentrated in the islands of Sal (63% of the supply) and Boa Vista (52%), aside from Pestana Tropico, which is located in the capital. On the two leading tourism islands an all-included upscale resort supply was developed and is operated by European hotel groups. In the lead, the German group TUI Hotels & Resorts operates 1,631 rooms in two resorts on Boa Vista. Iberian groups are also present: the Spanish group Melia International has two properties with a total of 1,436 rooms, while the Portuguese groups Iberostar and Pestana have one hotel each. Finally, the British group Thomas Cook operates one 244-room property under the brand Smartlines.

Not many projects have been forecasted by hotel groups. Hilton should, nonetheless, open a property with a capacity of 240 rooms on the beach in Santa Maria on the Island of Sal. Hilton would thus be the first American operator to establish a presence in the archipelago of Cape Verde. 

Strong steady demand

Tourism in the archipelago developed considerably in the last decade, surpassing a half-million arrivals by 2012. The number of arrivals at hotel properties in Cape Verde has more than doubled between 2005 and 2015 to reach 569,387 arrivals, and the number of nights tripled on the same period to reach 3.7 million in 2015. After strong growth since 2000, the crisis had only a slight impact on nights at accommodations in 2009 (arrivals -0.9%), and then growth resumed. In 2014, tides turned for tourism in Cape Verde following the Ebola epidemic that struck Guinea and Senegal. Even though the archipelago was not directly affected, tourist arrivals were impacted and fell by 2.3%. Tourists nonetheless returned in 2015, with arrivals progressing again by 5.5% (60,000 additional arrivals) and nights by 8.6%. The islands of Sal and Boa Vista are growth engines: in 2015, the prior tallied 1.8 million nights and the latter 1.5 million.

The number of nights in the archipelago also increased in the last decade thanks to longer stays: averaging 3.9 nights a decade ago, in 2015 they averaged 6.3 nights. This growth trend for arrivals could nonetheless be threatened in 2016 by the arrival of the Zika virus in May.

While the number of nights and rooms increased in a discontinuous manner across the decade, occupancy rates at properties went through various changes. It may be observed that it remains relatively low due to strong seasonality for arrivals that are concentrated in one half of the year. After reaching 58% in 2011, the occupancy rate followed a downtrend until 2015 when it reached 49%, which may be partly due to faster growth in supply than in demand. This average occupancy rate also disguises strong disparities: together, the islands – including Santiago– do not surpass an occupancy rate of 25%, while it reached 49% in Sal. Boa Vista takes the lead with an occupancy rate of 76%, and reached 83% at its historic high in 2011.

Cape Verde continues to have strong growth potential for tourism. One of the country’s primary challenges is to correct the current imbalance that leads to a concentration of tourists on Boa Vista and Sal, which is amplified by the country’s weak maritime and air connections between the different islands in the archipelago. Moreover, airport infrastructures continue to be insufficient in terms of capacity, thereby hampering growth in arrivals. International promotion of the destination is not always sufficiently developed. Finally, increased diversification of clientele should reduce its dependence on European markets, thus guaranteeing stronger growth in the number of visitors. These new objectives will be key for the archipelago to remain among Africa’s main destinations in the years to come.

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