The Azores, in a nutshell
Before the pandemic, the remote archipelago of the Azores islands in the heart of the Atlantic Ocean was perhaps the most undervalued tourist location worldwide. And now, in 2023, it's a fact. The World Travel Market London's annual poll voted the Azores as the world's most undervalued location. With unmatched natural beauty and a commitment to sustainable tourism, the Azores offer investment opportunities that are too good to ignore.
Experts praise Portugal's autonomous region for "its natural beauty and commitment to sustainability," a combination that makes the Azores the perfect destination for adventure and ecotourism. In recent years, Forbes, Bloomberg, BBC, Lonely Planet, Travel + Leisure, and other major global publications mentioned the Azores in their 'must-visit' lists for sustainable and adventure travel. So what makes these remote islands so attractive yet little explored by the tourist market?
Nine volcanic islands of the Azores archipelago sit right at the intersection of three tectonic plates - North American, Eurasian, and African, almost in the middle of the Atlantic Ocean, bridging the gap between Europe and North America. You can fly and escape to this geological paradise from Lisbon in just two hours or from Boston in five hours.
Americans say the Azores remind them of Hawaii twenty years ago before mass tourism overtook the islands. Europeans describe the Azores as Ireland in the tropics or New Zealand in Europe. The fact is that it's hard to compare the Azores to any other destination because they offer an unbeatable combination of natural wonders, affordability, and decent infrastructure.
The Azores also offer a world of natural beauty with stunning national parks, volcanic landscapes, and serene green forests with waterfalls and lakes. And with 11 seaports and year-round mild semi-tropical weather, water sports enthusiasts can take their pick from various activities, including surfing, boating, swimming, and yachting.
There are two UNESCO World Heritage Sites in the Azores. One is the city of Angra do Heroísmo, the capital of Terceira Island, filled with old colorful houses. And the second is the protected landscape of Pico Island, recognized for its unique vineyard culture.
Local farmers call the Azores "a place where everything grows,” as the combination of volcanic soil and mild climate forms a perfect environment for agriculture development. In the Azores, tourists also nature adventures and cultural sites, such as exquisite farm-to-table experiences and wine-tasting tours.
The good news is that the emerging tourist market of the Azores is creating exciting opportunities for investors looking to invest in vineyards, farms, and eco-resorts.
Tourism growth in the Azores
In 2017, the Azores were one of the poorest regions of the EU. But a few years before that, Portuguese economists researched the strengths and weaknesses of the Azores as a tourist destination and suggested developing tourist policies that could make the Azores competitive globally.
The Airline liberalization in 2015 sparked a tourism shift in the Azores. The end of a local airline monopoly opened the islands to low-cost carriers like Ryanair and EasyJet, bringing flexible travel options and younger visitors to the archipelago.
The rising visitor numbers to the Azores after the 2015 liberalization led the Regional Government to unleash a strategic and marketing plan for tourism in 2016 called PEMTA. This new initiative for the Azores aimed to make the Azores an exclusive destination for nature enthusiasts and boost tourism.
The tourism industry is highly competitive, and a destination needs to find its unique selling point. Fortunately for the Azores, its niche was almost evident. From 2014-2017 the Azores routinely appeared on the Top 100 Most Sustainable World Destinations list by Green Destinations and were conferred a special Best of the Atlantic award in 2018.
The regional authorities of the Azores set an ambitious goal to become the most sustainable archipelago in the world, making it an official priority. In 2021, the new Azores Tourism Sustainability Management Policy was published, pointing that 'tourism increasingly established itself as a fundamental sector for the territory and in which the development of the Azores destination should be distinguished by its sustainability.”
Over the past few years, tourism in the Azores has been steadily growing. The islands hit a record-breaking number of 972,000 guests and 3 million overnight stays in 2019. Though the pandemic halted the trend in 2020 and 2021, visitor numbers surged in the summer of 2022, exceeding pre-pandemic levels by nearly 12%.
The Azores have new roads, a €40 million private hospital, and nine airports. Visitors can rent cars and taxi services. The islands have also seen other significant developments in their infrastructure, like schools and pharmacies. However, the region's main challenge is a lack of accommodation. Hotels and related businesses only fill 78% of the demand, leaving a big gap to fill—a significant opportunity for investment and growth.
The Azores are just beginning their active development, and the entrance costs are still low, says the founder of Migronis Anatoly Letaev. "Having an example of Madeira, which already went through this active development stage, we can expect that prices will rise in the Azores, which are now at the start of their active development. You can now find many profitable proposals for investment in the hotel business there", he states.
The Azores are known not only for their nature, gastronomy, and laid-back lifestyle but also for their favorable tax system and low-priced real estate, at least for now.
Property prices in the Azores rise yearly and more rapidly than in other parts of the country, including the most appreciated regions. In 2019, for example, real estate prices in Lisbon increased by 2.7% and in the islands by 4.1%. Prices are unlikely to stop rising, especially with tourists and investors increasingly flooding the islands over the past two years. So this may be the perfect time to discover the investment potential of these idyllic islands.
Tourism is not the only promising investment opportunity in the Azores. Here you can find more about another profitable and low-risk investment direction, which is agriculture. Also, you can know more about investing in Portugal in the Migronis blog.