Azores for Newsweek Online USA

AZORES CERTIFIED BY NATURE, OPEN FOR INVESTMENT

The archipelago surprises with its stunning tourism and diverse business opportunities

T

he ocean setting of the Portuguese islands is now attracting a new generation of traveler, from business people investing in maritime services and infrastructure, to marine biologists studying deep water species for medicines, or tourists in search of dramatic seascapes and green volcanic hills. For increasing numbers of visitors from Europe, North America and beyond, the Azores are reclaiming their central place on the world map.

This is above all a time of unprecedented economic opportunity for the islands, especially in the maritime transport sector. The expansion of the Panama Canal on the other side of the Atlantic will bring new traffic to the Azores and will require increased investment in marine services. The islands are also ideally positioned to capture the trade in Liquefied Natural Gas (LNG) between the US and Europe, and to refuel the increasing number of ships that are replacing oil with gas to power their oceanic voyages.

“We will exploit our geostrategic position to create new jobs in the Azores,” Vasco Cordeiro, the President of the Regional Government of the Azores, says. “We believe the Azores could become an international service hub and we are planning to create a more favorable environment for private investment in the maritime services sector. We are willing to explore any project with investors in this sector, including public-private partnerships.”

For example, the regional government is backing the Costa project, which aims to turn Praia da Vitória Port into one of Europe’s leading centers for maritime LNG. Radical changes are also taking place in the air transport sector. To cut the cost of flying to the Azores, the government has negotiated with Lisbon a new air transport agreement, opening up the archipelago to low cost carriers from overseas. Irish carrier Ryanair has invested $100 million in opening a new base in Ponta Delgada, with daily flights to and from Lisbon and

Oporto, and weekly flights to and from London, while the UK’s Easyjet has also entered the market. Visitors rose by 20% last year. There has been a surge in the number of international flights to the Azores, including flights from major tourism markets including not only the UK, Germany, Spain and the Netherlands but also from Canada and the US. Foreign tourists are arriving not only in greater volumes, but also with higher purchasing power in their pockets thanks to the lower cost of air transport.

Vitor Fraga, Regional Secretary for Tourism and Transport, says that the regional government has invested heavily in attracting more tourists from North America in particular. In the summer, there are now five five-hour flights a week to and from Boston, operated by Azores Airlines.

At the same time as increasing flight capacity, the government has also introduced new training programs to enhance the quality of services provided to tourists and to win repeat customers.

For the increasing numbers of foreign travelers who come to the Azores, the islands’ biggest draw is their unique environment. Probably Europe’s leading destination for whale watching, the Azores also offer world-class scuba diving (with or without sharks), canyoning, hiking and bicycling, as well as warm water beaches, hot springs, golf courses and a regional cuisine that is rich in seafood and spices. Fraga says that investment in new products has helped reduce the seasonality of tourism in the islands, with new golf courses and mountain bike trails transforming the Azores into a year-round destination. “Our main asset is the environment and our main objective in tourism is environmental sustainability,” he says. “We truly cherish our natural resources.”

Preserving and managing the environment sustainably is a key priority in President Cordeiro’s strategy for the entire economy, not only for the tourism sector. As the islands’ new brand says – the Azores, certified by nature – it is the archipelago’s environment and natural characteristics that differentiate its dairy products, beef, fish, wood and wine, as well as its appeal to tourists. “We make exclusive, high quality products, in a place where we have managed to achieve a balance between economic development and

The environment is essential for our economy, especially tourism.”

Vasco Cordeiro President, Regional Government of the Azores

environmental protection,” Cordeiro says. “Our environment is essential to our tourism industry and to our economic growth.”

To help preserve the environment, the government is supporting a shift to clean power; by 2020, more than half of electricity will be generated from renewable technologies such as wind turbines and geothermal power plants. The island of Pico is even home to one of Europe’s only wave energy plants, supplying clean electricity to the local grid.

The islands are also at the forefront of marine science, especially in the new frontiers of aquaculture and marine biotechnology or ‘blue biotechnology.’ Helder Silva, President of the Institute of Marine Research at the University of the Azores, says that blue biotechnology could help develop innovative pharmaceuticals, medicines and industrial enzymes that can withstand extreme conditions. Because of the archipelago’s easy access to the deep sea, the Azores are evolving into an international hub for this fast-growing sector. “We intend to use the waters that surround us to create more wealth and new jobs,” President Cordeiro says. “Our challenge now is to work hand-in-hand with the private sector to transform our knowledge and our natural resources into job creation.”

Photo by_Paulo Melo

Ready for landing!

The airline that arrives with 74 years of history and eyes set on the future.

Nature gives the Azores’ its competitive strength Mr. João Bettencourt, Regional Director of Tourism of the Azores be done in partnership with the environment to sustain the ecology for the next generation.

How seasonal is tourism in the Azores?

Our peak months are July and August. However, we support all year round tourism through activity-based tourism such as trails, golf and whale watching. The government also supports MICE (Meetings Incentives Conventions and Exhibitions). The idea is that business visitors can stay on for a few extra days and enjoy the islands.

Environmental sustainability is the by-word in the Azores today. The archipelago is keen on attracting high-end tourists who are looking for the range of outdoor and nautical activities that the islands offer, and who will aid in doubling tourism’s contribution to GDP over the next 10 years.

What part is tourism playing in the economic recovery of the Azores and what are its main competitive strengths?

Over the past ten years, tourism’s contribution to GDP has been important, both in the public and private sector. There has also been dramatic growth during this time because we received international awards for sustainable development and this recognition gave the Azores more visibility. We believe environmental sustainability is important for the next generation and so we want to grow gradually to preserve our nature.

Tourism contributes about 2-3% of the GDP and we want to double that within another ten years.

The competitive strengths of the Azores are found in our nature, environment, ecology, hospitality, culture and nature activities. We have nine islands, each with its own special and unique landscape.

What has been the response to the new Azores’ brand?

Our new slogan is “Azores, Certified by Nature”. We have a natural park and there are developmental regulations to conserve it.

Our destination has become more popular due to our awards, promotion and airline liberalization.

We are working with tour operators on packages, as they are very good for low tourist arrival islands. Packages make the destination more affordable and they also promote the triangle islands.

How important is the concept of sustainable development to the growth of tourism in the Azores?

Sustainable development is our bread and butter. All jobs created in the past few years have been related to environmental sustainability, and we have received international recognition for our efforts in this field.

Tourism is not a threat to sustainability, but we want to develop it gradually to preserve

our destination with quality tourists, not tourism volume.

We want to ensure that it will

3%

of the GDP

is tourism’s contribution to the GDP. The government plans to double that within 10 years

70km of trails built

27%

increase in tourism arrivals this year

How fast is nautical and sea-based tourism growing and what other activities do you offer?

The Azores is one of the most unique places in the world for whale watching and nautical tourism. Our main strength is the sea and we have natural conditions for diving with our clear water.

Now we are diversifying to other activities as well, such as geo tourism: trails, biking and walking —the Azores have more than 700 Km of walking trails. We also have protected nature reserves.

There are scientific places to examine volcanic activity similar to a “Journey to the Centre of the Earth”. We also have an interactive museum built underground, which explains the history of the world through the geological impact of volcanoes.

There are incentives for boutique hotel investors to come to our rural areas: we want new projects which respect the characteristics of the islands.

Tourism education is also important. We have a local tourism and hospitality school to provide hospitality certification and we create awareness amongst the local population through campaigns and at the local schools.

Ensuring a balance between growth and the environment Mr. Vasco Cordeiro, President of the Azores Atlantic. For instance, there is the increasingly important issue of the use of LNG, such as the “Costa Project”. The Azores has an ideal location for the fueling of commercial vessels. The most important aspect is to have private investment in those areas.

We are planning ferry services, roll on, roll off vessels that can transport passengers in a seasonal way, and cargo all year round. This will create a single market between our islands.

What are you doing strengthen your brand?

President Vasco Cordeiro has been in office since his victory in the Azores’ regional election in 2012. In this, his last year in office, he seeks sustainable investment to develop the local economy and to use the archipelago’s geostrategic position for job creation.

What are you doing to combine economic growth with the environmental preservation of the Azores?

the World Heritage brand, like the Pico Island wine.

Regarding the blue economy; the most important use of the sea is Our economy is mainly based on fisheries. However, there are a lot of areas related to the environment. areas that we intend to explore such We cannot enjoy the kind of as how maritime transportation tourism we have without a strong can be used to promote growth in agricultural sector, as it is one of the other areas and blue biotechnology. main caretakers of our landscape We also have to exploit our and environment. geostrategic position to create We have other jobs. We believe projects that are the Azores could based on this balWe have become an interance between the service to exploit our national environment and hub and we are economic develgeostrategic planning to creopment. One is in ate a more favorposition to the forestry secable environment tor, where we have create jobs” for private instrict plans for pubvestment in the lic tender processes maritime services to give licenses to explore this pub- sector. We are willing to explore lic-owned land. The other is to use any project with investors in this our history for economic activities. sector, including public-private We are giving incentives for people partnerships. to recover abandoned areas and There are a lot of services that make them productive again with we can offer vessels crossing the

to

We just launched a major campaign: Azores, certified by nature. It is not only for the tourism sector but also for dairy products, beef, and fish; for every economic sector. It puts

Job creation

is a priority in 2016

50% of

renewables are expected to be in the grid between 2017 and 2020

5-10%

projected growth for the marine biotechnology sector over the coming years

them all under the same umbrella of ‘certified by nature’.

For example, in the dairy sector, we just abolished the milk quotas regime. In other countries, you can improve your income by producing more, but here we have to concentrate on quality.

It is a question of exclusivity and producing somewhere where there is a good balance between nature and economic development.

What is the renewable energy potential of the Azores?

We expect that between 2017 and 2020 there will be more than 50% of renewables in the grid mainly due to geothermal energy. We are building two geothermal stations on two islands and although we have an experimental station on Pico Island for tidal wave energy, our main sources of renewable energy are geothermal, wind and hybrid.

How will the Azores keep up with the marine biotechnology sector which is expected to grow between 5-10% over the coming years?

The Azorean University is very well positioned in deep-sea research.

The main challenge is to continue increasing our knowledge and to transform this into job creation.

That is where private investment comes in. We have to close the gap between the university and commercial exploitation of this kind of knowledge.

What are your priorities in 2016, the last year of your administration?

We still have a lot of work to do in job creation. If you have people working, they spend more so you have more companies producing and selling products.

The Azores: A unique destination for nature lovers Mr. Vítor Fraga, Secretary of Tourism & Transportation of the Azores Diving with sharks has also been introduced over the past three years.

We also have incredible gastronomy. We are competitive because of our environment, culture and heritage. We always strive to create new tourism products, because creativity is fundamental to tourism development.

How are the Azores attracting year-round visitors?

As the only destination awarded with the Quality Coast Platinum Award, the Azores’ natural beauty and hospitality are attracting an ever-increasing number of tourists from the North American and European markets.

What are objectives?

your

tourism

have seen increased tourist arrivals.

Since the beginning of the 2012 Firstly, it is environmental parliamentary term, the US marsustainability. We cherish our ket grew 116% in overnight stays. natural resources, which make us This is a total increase of 43,500 one of the most touristic attractive overnight stays and in 2015 the destinations in the world. The American market alone produced Azores are the only region in the 81,000 overnight stays. world to have been awarded the Our first market is internal visiQuality Coast tors from Portugal, Platinum award. and then our main Our next step is Creativity European market to ensure tourism Due is fundamental isto Germany. development. We the liberalizabelieve that in to tourism tion of air transthe future we will last development” portation have opportunities year, low-cost airto grow the sector’s lines, Easy Jet and revenue. We want quality tourists, Ryanair, added our destination as a tourists who can spend more; we route. As a consequence, U.K. visiare interested in quality not just tors increased by 40%. However, quantity or high volume. not only have we been added as a destination by airlines, but the What are the Azores’ main number of flights from our existing markets? target markets also increased.

The U.S. and Canadian markets are very important to us. Over the What attracts tourists to the past three years, we have invested Azores? in the North American market and We offer a unique destination,

with a product based on nature, and various activities based on our natural resources such as whale watching, scuba diving and diving.

90%

of visitors from the USA

5

flights

per week from Boston in the summer

40% increase in UK visitors last year

We have great beaches, with sea temperatures averaging 24ºc in the summer. In the fall, the sea temperature is around 19ºc. We also have hot springs.

We want to attract year-round visitors and have experienced our largest increase in our low season, between November and March. To achieve this, we have been promoting activities such as walking, mountain biking and whale watching. We also have great golfing conditions with a total of three golf courses, which are important for the U.S. and Canadian markets.

What is the outlook for investment in tourism?

To investors, we would say that all people are welcome here. Investing is easy, even with our environmental preservation focus, and we offer investment incentives. We are currently looking for investment in boutique and themed hotels that fit with our identity, values and culture. Our internal infrastructure has improved, providing ferries between the islands and the Triangle.

We are in the final planning stage of our Strategic Marketing Plan which will help bring together the marketing of the islands to external markets. The Azores is also a safe and secure destination with a low crime rate.

Please come and enjoy our nature, food, and hospitality!

Oceanography: vital for the archipelago’s future Helda Silva, Director of Department of Oceanography and Fisheries at the University of the Azores and President of IMAR - Institute of Marine Research What is the function of IMR?

IMR has a 20 year history. It started by associating several universities in Portugal that carry out marine science research. For the past few years we have held the presidency.

We are a team of about 18 people, but we are in the top 10 worldwide in research areas like sea mounts and habitat defense systems and others. We are small, but globally relevant.

How is your research innovative and how does the Azores geographical location give you a comparative advantage compared to other institutions?

The Azores’ geographic position in the middle of the Atlantic Ocean and easy access to the deep sea, facilitates important scientific marine research. This gives the islands important insight into biotechnology and the health of the ocean, as well as aiding in vital development of the islands’ “blue economy”.

Can you explain the functions of your department?

What are the benefits of this research for the Azorean Economy?

Oceanography is ocean science, but my main focus has been fishery sci- Fishing science protects our ence since economic interest in the economical and political ocean has increased over the last interests. Fisheries are important few decades. here because We started catches are working on We are small, but not extramarine proordinarily globally relevant” tected areas, large, but are species conimportant servation and corals, which are key for the 250,000 inhabitants. because of their vital role in mainWe also have a small group taining the quality of ecosystems. working in aquaculture. Europe We can understand the origin has had some problems growing of life from studying these sys- in aquaculture, but we have an tems and how species survive in opportunity here because of extremely high-protein environ- the large amount of available ments, which can give us an insight sea. Technology reduces costs, into biotechnology and treatment which is making aquaculture of disease. We started to research attractive. By reducing catches, sea mounts, due to the abundance it also promotes sustainability of in the Azores, to understand the the ocean and is the future as far movement of the species, food as feeding humanity and helping availability, and the ecosystem. reduce the 2050 food gap.

We are using global tools such as global remote sensing. We are in the centre of the Atlantic and here we can study how marine

250,000 local inhabitants for whom fisheries are vital

2050

Aquaculture is the future of feeding humanity and will help reduce the 2050 food gap

20Years IMR was founded in the Azores 20 years ago

organisms assimilate the sewage that flows from the American to the European continent through feeding, and the impact that it has on human health in general.

If other European nations want to study the deep sea, large research facilities are required. We have that capacity here, as we have a boat and easy access to the deep sea. I have been promoting the idea of being a hub for international deep-sea research.

How are you contributing to the “blue economy” of the Azores?

Most of these topics relate to the blue economy, especially aquaculture and biotechnology, which are challenging because of the level of research needed. As aquaculture develops, we want to be at the forefront of research.

Biotechnology has some properties that can be used for medicine and skin rejuvenation. This requires big companies because this area has been developed in only a few areas globally.

There is a risk of polluting the ocean, so a lot of research is still needed. There is some interest in mining the oceans for minerals which are needed for the computer and mobile phone industries, since these minerals are more abundant in the sea than on land. We have been working with international teams to study the impact and costs of this exploration.

How is global warming affecting the Atlantic Ocean?

The deep-sea team assesses changes in temperature affecting coral.

Some species are very sensitive to small temperature and pH changes, which may cause great losses in these ecosystems. Even if we stop pollution immediately, we will still see the effects for many years.