In our previous article about real estate on Ibiza we’ve seen that tourism is one of the main drivers for the economy on Ibiza. As the number of tourists increase, more people are likely to be investing in Ibiza. This could be for second home purposes, interesting capital gains on real estate on Ibiza or attractive rental yields. An increasing chunk is even interested to emigrate from their home country to live here for an indefinite period. The popularity of Ibiza is tremendously important for the island’s economy. In this article we will investigate if the current developments are just a hype or a reliable trend.
The term “Ibiza” is not limited to its geographical borders
The term ‘Ibiza’ is not always directly related to the geographical location. In the northern European countries people also use it to express fashion styles and interior styles. The bright, cheerful and bohemian styles remind people of summer, drinks, freedom and relaxation; in one word: Ibiza.
100, uhh 130 golden days
The island was speaking about the 100 golden days, until a few years ago. In these golden days, the majority of the hotels were fully booked and you couldn’t enter any restaurant or beach club without a reservation. Since a few years, these 100 days have extended to about 150 days which has a nice bottom line effect on businesses P&L’s. Clubs open their doors 2 weeks earlier than a few years ago and they close down about 2 weeks later. It seems there is still demand once the school/study holidays are over and the weather is still good.
Next to people who have to stick to the traditional school holiday periods there is another trend that helps people coming to the island. The social environments on the world are changing. People tend to go more often abroad for a quick getaway. The ability to work from abroad and cheaper flights are also contributing to more potential visitors to Ibiza. As a result of this changing environment and the enormous buzz around Ibiza, people tend to come more often the island. Even if it’s just for 2 or 3 days. The accessibility gives a quick hit of summer, freedom, relaxation and much diversity.
Let us make a little benchmark of comparable places in Europa and their social media reach/activity. I’ve selected the competing places based on the existence of gastronomy, sports, beaches and a party industry.
We take out of consideration that not just tourists are posting but also locals. Moreover, some types of customer groups are more likely to post on social media than others. But in fact, that is not what matters. When we are looking at free publicity for a specific location the total amount of posts exposed to other is what interest us. The result of this simplistic benchmark shows the enormous popularity of Ibiza. People are spreading the ‘news’.
Celebrities pushing island marketing
Next to tourists posting to social media, Ibiza has been benefiting from the huge stream of celebrities. It’s their party capital and many of them have bought a second house on the island. The paparazzi go where the celebrities go and the rich and famous’ holiday peeks are being spread over the internet, magazines and newspapers. As a result, Ibiza became more popular as a go-to holiday spot.
Location marketing by the Local Government
The current marketing machine is being led by free publicity of all its stakeholders. The island is mainly known as a party island and a place to relax. The local government is working on marketing the island in another way, to do more promotion for the gastronomic and sports side of the island. Moreover, they are looking at target groups in emerging countries who’s wealth is growing. Also the winter-season is part of the marketing plan to increase awareness and popularity of Ibiza. A few years ago, Ibiza was still a ghost town in winter, nowadays more shops and restaurants stay open to cater the cosy winter crowd.
Is the popularity of Ibiza a fad or a trend?
In conclusion, is the popularity of Ibiza a fad or a trend? Based on what is happening in the world and Europe, there are still many potential untapped markets. These could be leveraged to keep tourism numbers growing every year. Ibiza is unique. One can’t find a place in Europe that offers such a wide range of possibilities on such a small surface. People love Ibiza which reflects in the amount of social posts. Big companies would die for so much free publicity. Nevertheless, the island’s clients keep on posting and tempting their network which results in more and more visitors each year. Most likely the numbers could only stop growing when the government becomes even more strict towards business licenses.
When investing in Ibiza, it’s important to look at a broad range of factors to limit the risk. There are investing possibilities for all kinds of target groups and for all kinds of budgets. Let us know in case you have any specific questions regarding (non-)economic factors that could influence your investment.
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