Special Incentives for Rehabilitation of Tourism Destinations to Improve the Profitability of Accommodations: The Case of the Canary Islands

Abstract

Public administrations' commitment to improving tourist destinations has contributed to a consensus in the Canary Islands, particularly with the private sector, about regulations for urban development and the necessary financing alternatives for the rehabilitation of lodgings. The objective of the study is to demonstrate their favorable impact on companies' profitability, a significant variable to consider in the decision-making process of managers. The analysis of incentives as well as urban planning and financing requirements, comparing some of them to other regions, is carried out. The study concludes that the more ambitious the project is in terms of the increase in the number of beds and the category, the better the company's position will be, because the revenues increase without a proportional growth in costs.