The islands of the Canary archipelago are experiencing a sharp rise in the cost of living, particularly in food prices and within the tourism sector. Tenerife, too, faces substantial cost increases that affect not only residents but also tourists. Fresh food and services in hotels, cafés, and restaurants have become significantly more expensive, with percentage increases that rank as the highest in Spain.
Inflation on the rise
This development raises questions about the accessibility of basic provisions and the affordability of life on an island globally renowned for its hospitality and tourism. While Tenerife’s appeal continues to grow, the strain on cost structures presents new challenges for both residents and the tourism ecosystem.
Annual inflation in November 2024 rose to 2.2%, which is 0.7 percentage points higher than in October 2024, though still below the national average of 2.4%. Since November 2021, price increases on Tenerife and the Canary Islands have been the highest in Spain, particularly for fresh food (+33%) and services offered by hotels, cafés, and restaurants (+22%).
Inflation rate
According to the Instituto Nacional de Estadística (INE), prices in the Canary Islands rose significantly again in November. The Índice de Precios al Consumo (IPC) – the consumer price index – for this period climbed to 2.2%, representing an increase of 0.7 percentage points compared to the 1.5% recorded in October 2024.
Despite this increase, the Canary Islands remain below the national average of 2.4%, ranking third, alongside four other regions, with the lowest inflation levels among autonomous communities. Only Castilla-La Mancha (2%) and Navarra (2.1%) recorded lower rates.
The annual CPI rise in the Canary Islands is partly explained by a monthly increase of 0.4% in November compared to October. Nationally, the CPI rose in November to 2.4%, half a percentage point higher than the previous month’s figure of 1.8%.
Sharp price increases in food and tourism
According to INE data, the Canary Islands continue to lead the list of autonomous communities where the prices of food and non-alcoholic beverages have risen the most. Since November 2021, these prices have increased by an average of 33%, which is above the national average of 30%.
Prices increases in Tenerife and this rise means that food items that cost €10 three years ago now cost €13.30. Households with lower incomes are particularly affected by these increases.
Additionally, prices in the tourism sector, a vital part of the islands’ economy, have risen sharply. Since mid-2022, the costs of hotels, cafés, and restaurants have been on a continuous upward trend. These prices have increased by 22% on the Canary Islands since November 2021, compared to a 20% national rise.
Sectors
The monthly rise of 0.4% in November was mainly driven by price increases in the following sectors: clothing and footwear: +1.7% – housing: +1.5% – alcoholic beverages: +0.8%.
The most significant price decrease in November was noted in the leisure and culture sector, with a decline of 1.7%.
Over the past twelve months, the Canary Islands have seen the most considerable price increases in: housing: +6.6% – alcoholic beverages and tobacco: +4.7% – hotels, cafés, and restaurants: +4.2%.
In the first eleven months of 2024, housing (+5.7%) and alcoholic beverages and tobacco (+4.5%) showed the steepest price increases. On the other hand, prices in the leisure and culture sector fell by 1.1%.
Developments across Spain
Annual inflation for November in Spain stood at 2.4%, six-tenths higher than in October. Core inflation, excluding fresh produce and energy, dropped from 2.5% to 2.4%. The monthly general CPI rose by 0.2%.
Key factors contributing to the rise in annual CPI in Spain were:
- Housing: Inflation in this sector rose to 7.4%, 3.2 percentage points higher than the previous month. This increase was driven by rising electricity prices, in contrast to the decline noted in November 2023.
- Transport: Annual inflation in this sector rose by two points to -1%, mainly due to rising fuel and lubricant prices for vehicles.
Conclusion
The Canary Islands remain one of the regions with the highest price increases in food and tourism. While the islands’ annual inflation rate is below the national average, the rising cost of living and tourism remains a challenge for many residents and visitors alike.
Guy Devos © Photography
Prices increases in Tenerife ©
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