Introduction
At Hola! Hosts, we excel at two key things. Our primary focus is assisting existing owners of holiday homes in the Canary Islands to elevate their vacation rental management to a higher level of income. Additionally, we specialize in aiding individuals and investors in identifying properties in the market that have significant potential for high returns in vacation rentals. How do we achieve this? We have revolutionized our service, unlike any other company on the island, by incorporating local vacation rental data into our decision-making process. This approach offers two advantages. Firstly, it reduces the risk of investing in a property that fails to meet expected returns. Secondly, it helps uncover opportunities in less competitive areas of the islands. Our objective is not only to help find a profitable and low-risk investment but also to find one that aligns with the buyer's financial, location, and property preferences.
Approach to Results
Averages Provide Limited Insights
While revenue levels per municipality shed some light on the most profitable municipalities for investment, the figures presented below are averages. These averages encompass the income generated across all property segments within each municipality, ranging from the most affordable to the most expensive. Furthermore, within these municipalities, there are areas that are more or less profitable. Therefore, for a realistic analysis, each case must be evaluated individually.
Income Doesn't Guarantee Returns
Averages alone do not provide the complete picture. The other crucial aspect is property prices, as they dictate the investment levels. Even if a municipality has a high average income, the return on investment may be merely average if property prices are also high. Conversely, a municipality with a moderate average income could be a more favorable choice if holiday home prices are low. Each case must be examined on its own merits, and that's precisely what our sister company, Canary Home Invest, does for individuals and investors interested in investing in holiday homes in the Canary Islands.
Data Sources and Reliability
We rely on data from AirDNA.co, a leading industry expert in vacation rental analysis. This data is sourced from the top three platforms in Europe, namely Airbnb, VRBO, and Booking.com. The data used is from April 2023. Although the data may fluctuate as new information becomes available, these fluctuations are not significant. As a result, the data can be considered reliable for at least the next 12 months.
Terminology rental revenue of holiday homes in the Canary Islands
Below, in the results section, we are using acronyms for three types of measurements. These are: rental revenue of holiday homes in Canary Islands
ADR: average daily rate, or the average price per night
OCC: average occupation rate expressed as a yearly % of 365 days
ARE: average yearly revenue calculated by turning OCC % into days, and multiplying it against the average daily rate.
Results by Island
La Palma
Santa Cruz: ADR €71, OCC 79%, ARE €1105
Fuencaliente: ADR €64, OCC 70%, ARE €868
El Paso: ADR €79, OCC 74%, ARE €1126
Tijarafe: ADR €93, OCC 78%, ARE €1314
Puntagorda: ADR €90, OCC 82%, ARE €1474
Tenerife
Adeje: ADR €107, OCC 79%, ARE €1447
Arona: ADR €91, OCC 79%, ARE €1235
Granadilla de Abona: ADR €83, OCC 77%, ARE €1056
San Miguel de Abona: ADR €98, OCC 74%, ARE €1277
Puerto de La Cruz: ADR €67, OCC 77%, ARE €899
La Orotava: ADR €97, OCC 77%, ARE €1395
Santa Cruz: ADR €78, OCC 81%, ARE €1223
Gran Canaria
San Bartolome de Tirajana: ADR €105, OCC 71%, ARE €1391
Mogan: ADR €103, OCC 68%, ARE €1247
Las Palmas: ADR €82, OCC 79%, ARE €1119
Agaete: ADR €95, OCC 74%, ARE €1394
Valleseco: ADR €110, OCC 53%, ARE €1507
Santa Brigida: ADR €118, OCC 67%, ARE €1558
Fuerteventura
La Oliva: ADR €87, OCC 79%, ARE €1284
Antigua: ADR €82, OCC 75%, ARE €1138
Tuineje: ADR €71, OCC 70%, ARE €1033
Pajara: ADR €85, OCC 76%, ARE €1188
Lanzarote
Yaiza: ADR €149, OCC 82%, ARE €2125
Tias: ADR €91, OCC 86%, ARE €1549
Teguise: ADR €85, OCC 83%, ARE €1394
Haria: ADR €84, OCC 77%, ARE €1332
Top Municipalities per Island
La Palma: Puntagorda: ADR €90, OCC 82%, ARE €1474
Tenerife: Adeje: ADR €107, OCC 79%, ARE €1447
Gran Canaria: Santa Brigida: ADR €118, OCC 67%, ARE €1558
Fuertenventura: La Oliva: ADR €87, OCC 79%, ARE €1284
Lanzarote: Yaiza: ADR €149, OCC 82%, ARE €2125
Top 5 Municipalities
Lanzarote - Yaiza: ADR €149, OCC 82%, ARE €2125
Gran Canaria - Santa Brigida: ADR €118, OCC 67%, ARE €1558
Lanzarote - Tias: ADR €91, OCC 86%, ARE €1549
La Palma: Puntagorda: ADR €90, OCC 82%, ARE €1474
Tenerife: Adeje: ADR €107, OCC 79%, ARE €1447
Analysis of Results
Results by Island
La Palma
The results are mostly what was expected but Puntagorda, coming in 1st, was a surprise, especially having the highest occupancy rate in the whole island.
Tenerife
In Tenerife, it was no surprise to see the top touristic municipalities. The surprise came in number two, with la Orotava, a not typical tourist destination. This municipality though has some of the best views, food, and nearby wild beaches in Tenerife.
Gran Canaria
The results follow the trend in Tenerife but go even further, with three non-typical tourism destinations (Agaete, Valleseco, Santa Brigida), two of them mostly rural, generating higher AREs than the touristy counterparts.
Fuerteventura
Here there are no surprises. The ranking follows the order of most to less touristy municipalities within Fuerteventura.
Lanzarote
Lanzarote is by far the most profitable island for investing in a holiday home for vacation rentals and the municipality of Yaiza beats by far any other in the Canary Islands. Here there were no surprises in the ranking.
Top Municipalities per Island
When it comes to which municipality tops each island, again, there were no surprises, apart from Gran Canaria, where the real municipality of Santa Brigida beat all tourism destinations on the island. Definitely, an area to keep the attention on and promote to new investors.
Top 5 Municipalities
When it comes to the top five independently of the island, it was no surprise that Lanzarote would have two in the first five. The surprises came in 2nd place, with Santa Brigida being the most profitable area for vacation rentals and short lets in Gran Canaria, and with the exceptionally high OCC of Puntagorda in La Palma, making it to 4th place.
Conclusion
Despite the results just being averages of the different towns within a municipality, they still provide useful insights for the foreign investor coming to invest in a holiday home for vacation rentals in the Canary Islands. For those interested to look in closer, we have the tools to do so and we will personalize the results based on your preferences regarding investment level, location, and property type. That type of analysis, supported by in-depth return scenarios, will be the perfect combo to support investors in making the best investment decision based on the results they want to obtain.
-------------------------------------------- Are you considering investing in a holiday home in the Canary Islands? Contact Canary Home Invest and we will help you make a proper evaluation based on your property preferences, and return on investment expectations.
Wondering how's the purchase process, and the costs and taxes related to buying a property in Spain? Check out our guide for buying real estate in the Canary Islands. Why Canary Islands, Spain, and not investing in foreign property elsewhere? Here are nine sound business reasons why it is not only a safe choice but also a rewarding one. #vacationrental #holidayhome #shortlet #rentalrevenue #canaryislands #incomeby municipality #realestateyield #foreinghome #buytolet #foreingrealestate #foreignproperty #grancanaria #tenerife #fuerteventura #lanzarote #sijoitus #asunnot #kanariansaarilla