Elasticity Data From 2015 to 2024 Shows Demand Rising Despite 85% Price Increase
Madeira’s tourism industry has not yet reached its limits, according to Eduardo Jesus, the regional secretary for Tourism, Environment and Culture. In a recorded message for the XVII Annual Tourism Conference, he pointed to data on elasticity, a key economic concept, to explain why the region continues to attract visitors despite higher costs.
Between 2015 and 2024, the average price per room in Madeira rose by 85% while overnight stays increased by 67%.
If we were at the limit of elasticity, the rise in prices would have caused a drop in overnight stays. But that is not what happened
Eduardo Jesus, Diário de Notícias Madeira
“Based on these indicators, he concluded that Madeira has room for improvement”, says Diário de Notícias Madeira. Eduardo Jesus argued that strong demand has been sustained thanks to Madeira’s reputation as a reliable and attractive destination.
He makes these statements despite the tourism-related challenges regarding extreme traffic, substantial pressure on landscapes like Fanal, and a housing crisis affecting residents.
Increased Prices Have Not Discouraged Travelers From Visiting Madeira
Mr. Jesus underlined that tourism demand and supply can be understood through three forms of elasticity:
price elasticity of demand
income elasticity of demand
supply elasticity.
Each, he said, helps explain how visitors and providers respond to changing conditions. He emphasized that Madeira’s experience in the past decade shows how price increases have not discouraged travelers. Instead, demand has followed the price adjustments, which he described as a sign of confidence in the island’s value as a destination.
New Tourism Strategy Planned for 2026–2027 Alongside Updated Planning Framework
Looking ahead, the regional government plans to present a new tourism strategy in 2026 and 2027. At the same time, it will update the current Tourism Planning Framework, a tool used to guide the development of the sector. The secretary said these steps will be essential to prepare the island for the future.
Measures Already Underway to Spread Visitor Flows and Improve Site Management
Current measures include efforts to reduce pressure on the most visited attractions by spreading visitor flows more evenly across the island. Authorities are also working on improving access management, with technology expected to play a central role. These initiatives are designed to address challenges linked to high visitor numbers, while protecting both the natural environment and the quality of the tourist experience.
Source: Diário de Notícias Madeira
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