A phenomenon that was different a decade ago in the islands

According to the latest employment survey distributed by SREA, tourism employs around 10,300 people, while agriculture, which was once the social “buffer” in times of employment crisis, is in decline and accounts for only 7,200 jobs.

This turnaround began in 2022 and 2023, when tourism rebounded from its decline during the COVID-19 pandemic, with agriculture already feeling the effects of the crisis in the sector.

Upon analyzing the net figures for each sector, we find that the revenue generated by tourism last year was approximately 186 million euros. This figure refers to income from accommodation and restaurants. Dairy products, including milk, cheese, butter, powdered milk, and yogurt, generated direct sales of around € 185 million in the Azores, mainland Portugal, and abroad. These figures are very similar.

However, we must also consider the revenue generated from tourism-related activities, including restaurants, visits to tourist attractions, car rentals, various water sports, and other forms of leisure.

In agriculture, we must include artisanal products, private activities such as crops for personal use, and possibly revenue from popular festivals and livestock farming.

It is easy to conclude that tourism, in addition to employing a large number of people, is currently the sector with the greatest economic impact.

The Secretary for the Economy, Berta Cabral, speaking at the Tourism Fair, said that the Gross Value Added of Tourism is currently estimated at around 20%, a figure that is far ahead of agriculture, which, according to the latest data from 2023, latest available figures, stood at 6.3%, a figure that seems likely to decline given that in 2019 it was 8.5%.

Tourism always growing

As tourism revenues grow, so does the demand for accommodation, and consequently, the number of employees. In 2024, there were 13,171 beds available in traditional hotels and 1,823 in rural tourism (TUR). There are no precise figures for local accommodation, but according to 2023 data, there were 3,083 units registered with approximately 16,000 beds.

Another positive factor is that it has been growing steadily since the onset of the pandemic. In 2023, it increased by 14.6%, in 2024 by 11.7%, and in the first five months of this year, it has again increased by 6.5%, even before the high season.

In terms of income, there has also been significant growth, reaching $ 128 million in 2022, $ 158 million (+24%) in 2023, and $ 186 million (+18%) in 2024.

Agriculture and livestock remain a solid sector.

It is not safe to assume that we are moving towards a new economic cycle after the current one, based on the principle that the Azores have experienced economic development in cycles.

In fact, agriculture is still a solid activity, based largely on endogenous factors, even though, due to mistakes made along the way, external dependence is growing, especially in animal feed.

Tourism is a thriving sector worldwide and is also growing in the Azores; however, it is a less stable sector that can change for various reasons, such as more attractive offers from other destinations, limited economic resources in families, or natural phenomena.

Despite its dynamism for the economy, tourism is still far from being the economic mainstay of the islands.

The Azores still depend heavily on the public sector, which accounts for more than 40,000 jobs out of a total of 121,000 active workers. The public sector also accounts for one of the most important shares of Gross Value Added, standing at 32% in 2021, followed by the real estate sector, which accounts for 10% of GVA (down two percentage points).

However, it cannot be ignored that tourism is currently a significant driver of the Azores’ economy and is on a promising path. It should also be noted that many destinations are facing unstable situations due to political and military conflicts that are discouraging travel.

Rafael Cota is a journalist who lives on the island of Terceira, Azores.

Translated to English as a community outreach program from the Portuguese Beyond Borders Institute (PBBI) and the Modern and Classical Languages and Literatures Department (MCLL) as part of Bruma Publication and ADMA (Azores-Diaspora Media Alliance) at California State University, Fresno, PBBI thanks Luso Financial for sponsoring NOVIDADES.