The clouds in the economy are already in the sky, but tourism continues to resist the impact of the inflation scenario. The year remains a record year for the sector and the full hotels leave no doubt. Prices increased on average by 10% compared to last year in the hotels surveyed by DN/Dinheiro Vivo, guaranteeing that higher rates have not alienated guests. Still, the portfolio of the Portuguese is starting to lighten and the strategy to continue the path of growth is based on foreigners.

“In the summer period, we saw a 12% contraction in the national market, with a higher incidence in hotels in the Algarve. Customers are more price sensitive and their consumption patterns are changing. A good example is that given the reservations we have for September, the withdrawal in the national market for the summer period drops to 5% later,” explains the commercial director of Amazing Evolution, Pedro Dias de Sousa. The hotel management group, whose portfolio more than 20 units highlights the increase in foreign tourists, particularly North Americans who weighed over 54% in the operation this year, the UK grew 6% and the Spanish market 9%. German tourists choose less to spend their holidays in Portugal, which meant a 25% drop in the group’s activities in this market.

Partly in view of the cooling of the internal market, it is necessary to sharpen the needles and look for issuers who are willing to spend money in the country. “The difference in purchasing power of the Portuguese compared to countries in Northern Europe or the United States is already large and will become even worse in times of economic crisis and high inflation. a substitution effect,” says the person in charge. Also in the north, the hotel manager of Yotel Porto believes that the lurking “is a slowdown in demand, mainly due to the increase in average prices and the lower purchasing capacity of the Portuguese”, and agrees that the attraction of foreign tourists will allow the company to grow.

“We believe that if the sector adapts to the price level, demand will not undergo drastic fluctuations. The foreign market is essential for the development of tourism. With the opening of new air routes to the city of Porto, we will see an increase in enabling the demand. It is expected that in this way the US market will continue to grow and the Asian market will grow again in view of the relaxation of the restrictions that existed until then,” estimates Manuel Carneiro.

The same scenario is shared by the Director of Business Development Portugal and Head of Resorts for Southern Europe at Minor Hotels. Hélder Marcelino hopes that demand from the Portuguese will remain stable, although he admits that “corrective adjustments” may be made. But the chips must be placed on the chips that come from the outside. “The international market remains essential, countries such as the United Kingdom, the United States, Brazil and other close markets in Europe will be decisive in continuing the good performance and growth trend for the destination Portugal,” said the group’s spokesperson. Tivoli Hotels owns.

With more than a dozen hotels from north to south of the country, Stay Hotels also counts on foreigners as key players in bookings. “Inflation inevitably erodes purchasing power and we know it could crowd out the national market. Foreign tourists occupy the highest percentage of our guests in the summer months, so if in a normal scenario their importance is already high, in this scenario it is even more important. We continue to register high demand from guests from the international market and it is during this summer period that there is a higher demand for our hotels from the foreign public from countries such as Spain, France and Brazil.”

At the Hyatt Regency Lisboa, which opened in September 2022, the majority of customers come from other countries and should remain so. “Because we are part of an international chain, we are slowly entering the national market. The international market continues to grow, despite the significant increase in airfares, the limitation of flights, the rise in the cost of accommodation and other leisure activities. The international market is our main source of income and the decline in the domestic market will not have a drastic impact on us,” said General Manager Javier Soler Muñoz.

Looking at the islands, the stories in the Azores are no different. “There is a great desire in general to discover the Azores and that is why we have not yet felt a significant drop in Portuguese purchases due to the rise in interest rates,” said Bensaude Turismo’s executive director. “In the high season, the international outbound markets are the markets with the highest percentage of overnight stays, as opposed to the low season, when the domestic market dominates. The United States, Germany, Canada, Great Britain, Spain and France are the main international outbound markets Due to improved air connections with the United States, this market has shown significant growth, and Germany has also gradually recovered,” adds Jorge Aguiar. “It is absolutely critical to continue and consolidate the work done on this matter due to the importance and criticality of air connectivity, preferably point-to-point, and progressively extending connections to the mid and low season,” he defends.

record earnings

Despite the stated challenges, the indicators point to another historic year in the coffers of national tourism companies. Demand has not diminished due to rising prices and revenues continue to rise. Amazing Evolution assumes a cumulative growth in turnover of 22% compared to 2022 thanks to more tourists (+17%) and the increase in average prices (+10%). Looking at the period before the pandemic, the group is already registering a 50% increase in turnover. “The Algarve stands out as the best performing region, with a remarkable 14% increase in demand.

This indicates the growing popularity of the Algarve as a sun and sea destination, which travelers prefer. The Alentejo also closely follows this trend and shows a 13% increase in demand. Lisbon also experienced positive growth, albeit slightly lower, at 10%. Despite all the uncertainty about the new airport and the saturation of the existing one, the capital managed to show interesting growth figures this year. In the islands, both the Azores and Madeira recorded moderate growth in demand, around 6%,” says Pedro Dias de Sousa.

As in 2022, hotels expect an extension of the high season and are optimistic about bookings for the months of September and October. Even after the summer, tourists continue to pour into the country in large numbers and business tourism is also picking up again, the hotel manager of the Sheraton Cascais Resort assures. “The business/group segment has a high occupancy rate in September, October and November. We also see an increase in demand for long stays, both for the hotel and for our residences,” says Tânia Rodrigues.

Rute Simão is a journalist for Dinheiro Vivo