1. INTA 35 World Urban Development Congress – 6-10 Novembre 2011 – Lyon et Grenoble Carlos M. Santos Full Professor in Economics at the University of the Azores (Portugal) President of the Azores Tourism Observatory (OTA) November 8th, 2011 Nautical Tourism: A Successful Cluster in the Azores Islands

2. Growth Constraints Fragile emerging alternative tourism islands destinations face several severe growth constraints such as: Lack of accessibilities; Small territories Small and fragmented domestic markets; Lack of economies of scale; High Seasonality, Few backward and forward sectorial linkages; Lack of human capital; Depletion of exhaustible natural capital; Difficulties in the diffusion of technological innovation; Small and undeveloped capital markets; Few networking among the different tourism players; No territorial clustering; 2 Nautical Tourism: A Successful Cluster in the Azores

3. Importance of Tourism Clusters Tourism clusters are very important to face the growth constraints mentioned in the previous slide by promoting a sustainable and competitive tourism island destination, namely a clustered tourism destination. A tourism cluster is associated with a tourism product and a tourism destination. Nautical Tourism An important international tourism product is nautical tourism. The available statistics show that nautical tourism Nautical Tourism represents 2,8 million trips/year in Europe and is expected to rise to 6,6 million trips in 2015, equivalent to annual growth of 9%. In Portugal, Nautical Tourism represents 1.2% of tourists' motivations. The regions where this product is most important are the Azores (6.2%),Madeira (5.8%) and the Algarve (3.1%). The Azores have a few comparative advantages in nautical tourism and therefore they have the potential to develop a successful nautical tourism cluster. 3 Nautical Tourism: A Successful Cluster in the Azores Source: Turismo de Portugal (2007)

4. The Sea: A new territory to explore and a new centrality In small islands sea tourism clusters are very important to face the growth constraints placed by small land territories with competing uses. The maritime territory of the Azores: a source of sustainable growth EEZ Area (200 Miles): ~1,7 million km 2 (~19 x!) – Azores: ~1 million km 2 The 3 rd biggest EEZ of EU and 11º worldwide. 4 Nautical Tourism: A Successful Cluster in the Azores Source: Turismo de Portugal (2007)

5. A Successful Cluster in the Azores 5 SeaClusterSeaCluster Cruises Diving Big Game Fishing Scientific Tourism Scientific Tourism Source : adapted from 2008-2010 Strategic Marketing Plan for the Azores. www.visitazores.com Nautical Tourism Sailing championship Sailing championship Nautical Sports Nautical Sports Health & Wellness Health & Wellness Spa Scientific Research Scientific Research Other marine resources Other marine resources Thalassotherapy Pharmaceutical Surf and Windsurf Gastronomy Construction Body board Commercial Fishing Commercial Fishing Yachting Nautical Tourism Nautical Tourism Nautical Tourism Events Nautical Tourism Events Whale Watching Whale Watching

6. 6 Nautical Tourism: A Successful Cluster in the Azores Whales and Dolphins Watching Source: www.visitazores.com www.visitazores.com www.portosdosacores.pt The archipelago is a superb location for whale-watching with 24 different species of whales and dolphins searching out its waters to feed and reproduce or simply passing through on their migration route.

7. An Example of Success in the Whale Watching Business: the “Picos de Aventura” Whale Watching Company 7 Sources : www.picosdeaventura.com www.picosdeaventura.com Jornal Diário March 11, 2011 Açoriano Oriental October 31, 2011 Picos de Aventura is a tourism animation company, created in 2003 in the island of São Miguel, offering several sea and land activities, mainly whale watching. It has obtained the Certification Quality Management APCER and IQNet. The firm is aware of the biodiversity that characterizes the Azores and this way it promotes an interaction with nature, always reminding their customers about the need to respect and to preserve the environment. In March, 2011 it has received the award of “Best Company of Active Tourism” by the Portuguese tourism journal Publituris. In order to expand the company, its owner has decided to develop it’s whale watching activity not only in the Azores but also in the archipelago of Cabo Verde (Cape Vert). The Cape Vert commercial operation is expected to begin in January, 2012. Nautical Tourism: A Successful Cluster in the Azores

8. 8 Sources: www.picosdeaventura.com;www.picosdeaventura.com José Poças Esteves (Sociedade de Avaliação Estratégica e Risco, Lda.) An Example of Success: The “Picos de Aventura” Company “The Sea in the Azores economy” “ The Azores in the sea economy” Nautical Tourism

9. Scientific Tourism 9 Source : João M. Gonçalves (University of the Azores); Department of Oceanography and Fisheries (University of the Azores); http://www.horta.uac.pt/ Nautical Tourism: A Successful Cluster in the Azores Major fields of research: Marine Ecology and Biodiversity Physical and Biological Oceanography Marine Biology, Ecology and Assessment of Pelagic, Demersal and Deep-Sea Fisheries Resources

10. Scientific Research – A Tourism Example 10 MONICET is a research project aimed at developing the methodologies and the infrastructure to build a long term database of cetacean sightings from commercial operations in the Azores. It is based on a consortium of 2 companies and one research center, and supported by the Azores Government through the Regional Directorate for Science, Technology and Communications and the Regional Fund for Science and Technology The collected information will be stored in custom-built databases, easy to manage but powerful enough to hold the long term data series required for the nautical tourism industry needs, for : Monitoring the marine environment, Maximizing the quality of the client’s experience, Promoting the reputation of the Azores as a premier whale watching location. Source : www.monicet.netwww.monicet.net Nautical Tourism: A Successful Cluster in the Azores MONICET- The whale watching private companies and the public entities at the service of the knowledge and conservation of the Azores cetaceans Cetaceans Sightings in the Azores (2011)

11. 11 Nautical Tourism: A Successful Cluster in the Azores Diving Source: www.visitazores.com www.visitazores.com The potential of the Azores is almost endless in terms of diving spots and types of diving.

12. 12 Nautical Tourism: A Successful Cluster in the Azores Cruises Marina of Ponta Delgada Source: www.portasdomar.pt www.portasdomar.pt www.portosdosacores.pt The Azores has three islands capable of servicing cruise ships and delivering matchless experiences ashore for passengers: São Miguel, Terceira and Faial. Yachts

13. 13 Nautical Tourism: A Successful Cluster in the Azores Yachting Source: Castro, Armando (Department Supervisor at Portos dos Açores) Due to its geostrategic location, the Azores are a stopping point for yachts in the North Atlantic April-June November-Februar y

14. 14 Nautical Tourism: A Successful Cluster in the Azores Yachting The Horta marina is the main yacht’s harbor of the Azores and it is the fourth most visited marina in the world Source: www.marinasazores.com www.marinasazores.com Source: Castro, Armando (Department Supervisor at Portos dos Açores)

15. 15 Nautical Tourism: A Successful Cluster in the Azores To Conclude: The Importance of Nautical Tourism in the Azores Sustainable development of the Region Source of innovation Creation of Interpretation Centers and Museums Promotion of the socio-cultural values Development of infra-structures National and International Events Promotion of scientific research Sources: Gonçalves, Jõao M. (University of the Azores) Castro, Armando (Portos dos Açores) www.cnhorta.org Marinas and Harbors

16. Thank You for Your Attention! Carlos M. Santos Full Professor in Economics at the University of the Azores (Portugal) President of the Azores Tourism Observatory November 8th, 2011