After the storm comes calm. And after two years of pandemic comes the best summer ever for the Algarve in terms of revenue, worth 1.35 billion euros at the end of the year. At the end of the first half of 2022, the National Institute of Statistics (INE) reported an increase in total revenues from tourism developments of more than EUR 42 million compared to that recorded at the same time, in the record year 2019. On the other hand cumulative overnight stays were 12% below that period. Conclusion? “The Algarve tourism activity is growing much more in value than in volume,” explains João Fernandes, President of the Algarve Tourism Region, to Dinheiro Vivo.
The increase in revenues is mainly due to the “brutal increase in costs, which exceeded all expectations and which will lead to companies reaching the end of the year with higher turnover, but with much less profit,” said Hélder Martins, chairman of the Association of Hotels and Tourism Enterprises of the Algarve (AHETA).
“We have all predicted, in the best of expectations, that we would be at the level of 2019 by 2023,” emphasizes the director of the RTA.
The course was different and the thirst to return to normalcy made the recovery faster than expected. In July, the occupancy rate/room even surpassed 4.3% in the same period of the best year, with a 17.2% increase in sales volume, according to data from AHETA. In terms of aviation, despite still being below 2019 levels, the number of air connections has increased compared to the previous year. Of the nine airlines currently operating at Faro airport, Ryanair, easyJet and Jet2 remain on the podium in passenger transport.
In short, positive indicators that support good omens for the coming months. “In August the feedback is in line with the path of progressive recovery in demand, we should have been close to 2019 values, but with more gains,” continues João Fernandes.
By the end of the year, it is predicted that the pace will hold, with golf – whose rounds have increased by 8% to a record 1.4 million in the first six months of the year -, nature tourism, business , the nautical sector and sport to contribute to the reserves in the portfolio. Other niche segments, such as weddings, have favored tourism in the region.
The forecast is revealed: “Keeping the conditions we have in perspective, we will end the year with a turnover between 5 and 10% higher than in 2019”, when Algarve tourism reached an income of 1, reached 23 billion euros. Taking this number into account, the region’s tourism activity could reach historical results in 2022 of between 1.29 and 1.35 billion euros.
optimistic hoteliers
Hotel groups are optimistic in their assessment of the summer of 2022. “A summer of recovery with excellent results, occupancy rates slightly higher than in 2019 and an increase in the average price,” summarizes Jorge Beldade, regional director of operations of the group. Tivoli, to DV, cited “higher demand and greater willingness to consume” on the part of customers. The occupancy rate is progressive, depending on the summer months, with August already at 90%.
Heading to Vilamoura, Hilton’s sales & marketing director, João Rosado, refers to “average rate growth” across the hotel industry. The hotel reveals an “operation marked by high demand, but with a massive shortage of staff, limiting the opening of more spaces in the resort”. Rising energy costs are also a concern for the brand, which predicts a “very vibrant” Fall/Winter.
Rita Pereira, responsible for the strategy and business development of Amazing Evolution, also says that the demand for hotels in the chain “has surpassed all records of previous years”, underlining the importance of the national market, which is “always one of the most important emitters in the Algarve at the moment”. The outlook remains positive until the end of the year.
european racket
The turnaround in tourism in the Algarve was largely explained by the president of the RTA, prompted by a phenomenon occurring on a European scale. We’re talking about the consumption of rebellion. After two years of being devastated by the restrictions imposed by the Covid-19 pandemic, when family savings increased significantly, there was a greater propensity among Europeans to travel and consume. Preference was given to Southern Europe.
Despite financial availability, “the conflict in the east also drove people further away.” Added to the list are the restrictions at European airports. In the words of João Fernandes, the country and the region have done an excellent job during the pandemic and have not lost its reputation as tourist destinations. The combination of factors, he says, has led to us now taking advantage of such demand.
In the same sense, the Portuguese account for the highest number of overnight stays in the southern region. Foreign guests, on the other hand, recorded a decrease compared to previous years, standing 7.2% in June below the value recorded in the same month in 2019. While the German market was down, the North American market added points, says Hélder Martins.
On the other hand, the number of people choosing to live in the Algarve, “which is a source of support for off-season demand”, has risen from 71 thousand in 2008 to 105 thousand in 2021, according to Pordata statistics.
This winter, with rising energy prices, doors will open for new polluters. “Many countries in Northern Europe will be tempted to holiday further south, eventually combining the opportunity to reduce costs, such as that of this asset, which is under pressure,” the official added. and says the Algarve wants to generate a stream of visitors at that time.
clouds on the way
Bookings in the portfolio and the prospect of air capacity on offer are encouraging. However, it is necessary to take into account the many clouds that are in the way – starting with the confidence of the Eurozone, which recorded the lowest value in a series, as well as the United Kingdom, which saw its lowest value since 1974.” We are talking about one of our main issuance markets, whose central bank has announced an expected inflation of 13%,” the leader warns. Demand from this market is expected to decline in the coming months. The same is expected to happen with German and Dutch.
The spirit of seasonality continues to haunt the region, which is doing everything it can to get rid of it. “It exists, it remains very expressive and the fight against this problem is a common goal,” said Hélder Martins, president of AHETA.
On the other hand, João Fernandes is pleased with its existence, saying that “it is a phenomenon common to all destinations in southern Europe that respond to availability and weather conditions that allow travel in a certain period”. Efforts are being made to “find markets that tend to travel out of season” and to “generate visit motivations, develop new products”, assuring those responsible.
Resilient and backed by the government, there are not many companies left in the Algarve, says RTA’s chairman. However, the vast majority have responded to the recovery with a lack of human resources, a reality that is expected to change in 2023 with the use of immigration, namely through the new Aliens Act and the agreements with the CPLP for mobility. “We see Cape Verde and Brazil as great opportunities to address needs that are currently embarrassing,” reveals the leader.
TAP is not excluded from this equation. The national airline did not regain air connections to the region, having lost a 6 to 3% share, according to data from the National Civil Aviation Agency (ANAC). Both representatives said it was “unfortunate” that the national airline “does not provide a good service to tourism and the main tourist region of the country”. “It is inconceivable that TAP has no connections through which the Algarve, which also constantly contributes to its rescue, can at least benefit from the hub & spoke model,” says his revolt João Fernandes, who says it is necessary to strengthen Lisbon-Faro.
Most of the restrictions, says the Algarve Tourism Region director, are due to the fact that tourism activity has recovered beyond expectations and faster than its competitors. Looking at the whole scenario, it’s “growing pains,” he says. “And on the one hand, I’m glad we had them because if we didn’t, it would be a sign that we weren’t adults.”
(Remark: The news was changed at 9.15 am and corrected the figures for the income that Algarve tourism achieved in 2019, namely 1.23 billion euros instead of 18.4 billion – a value that is taken into account in the perspective of growth for 20.3 billion, as indicated in the title and text – as it was originally written, the latter amount corresponding to the total tourism revenue in Portugal in the same year. That is why the values of 5 to 10% predictably reached this year have also been corrected to between 1.29 and 1.35 billion euros. Our apologies to the readers.)
Dinheiro Vivo journalist
Source: DN
