In the first quarter of the year there were positive signs for the hospitality sector, where the number of new businesses increased by 16% compared to the same period last year. Through March, 204 more new businesses were created than in 2022, out of a total of 1,503, according to data collected by Informa D&B for DN/Dinheiro Vivo. In the first three months of the year, the number of closures decreased by 3.2% to 329 and the number of bankruptcies – 62 started up to March – remained almost in line with last year, with a slight increase of 1.6%.
Looking at the national map, Alentejo was the region that gained the most momentum with a 40% growth in new businesses, followed by the center where new registrations increased by 37%. On the other hand, the Azores were the only region to experience a decrease, with registrations down 22% compared to the first quarter of 2022.
In a more refined reading, the consultant indicates that the “short-term accommodation” segment was the segment that registered the largest growth in the first quarter (33%) with 290 registrations. This is followed by “cafés and patisseries” with 212 new registrations (+19%) and “restaurants” with 772 new establishments (+13%). Less attractive were the fringe businesses “beverages” and “hotel and rural tourism”, which not only recorded the lowest growth (1.2% and 5.1% respectively), but also saw an increase in the number of closures (19% and 16% respectively). % ).
Informa D&B is also updating the collected data for 2022, which also shows a 21% recovery from 2021, with 4617 new businesses. However, business confidence did not match pre-pandemic levels and new registrations were 11% lower than in 2019 (5167 new businesses).
The “short-term accommodation” and “drinks” subsectors were the top bets of business people last year, leading to 40% growth in each subsector. After counting, 872 new companies for “short stays” and 280 for “drinks” were created. Overall, “hotels and rural tourism” was the only segment to decline this year, with 480 new registrations, down 2% from 2021.
The strong recovery in tourism in the country has not only stimulated the creation of new businesses, but also reduced the number of bankruptcies (-23%). Still, 1,599 businesses closed their doors, up 5.6% over the same period, a reading that may also be related to the end of pandemic support.
Pandemic and inflation are weighing on businesses
Promoting and Innovating Rural Restoration (PRO.VAR) looks at these data with the necessary caution. “There are companies that have managed to keep growing and even opening new ones, especially in tourist areas. However, it is important to note that the opening of new fast food restaurants is happening at a very fast pace as we witness the closure of traditional Portuguese restaurants”, details President Daniel Serra. The head of the association representing the country’s restaurants is concerned about traditional businesses, which are being strangled by inflation and the losses caused by the pandemic, saying it is “important that support measures are put in place to ensure the survival and to ensure the growth of businesses as well as the preservation of Portuguese gastronomic culture and tradition”. Daniel Serra recalls that “the sector has been suffering from rising costs, in particular the increase in raw material and labor costs, which has had a negative impact on companies’ profit margins”.
“Most companies in the hospitality industry were over-indebted during the pandemic period, had to resort to borrowing to cover losses, and often did so by making “irresponsible” and risky management decisions, but they did so by expressly telling the government, who had promised that once the pandemic was overcome, they would make good the damage suffered”. “If this does not happen, the financial health of many companies will remain very weak and economic recovery will take even longer. “, he warns.
Daniel Serra assumes that the extension of moratorium requests under the Treasury Support Line for micro and small tourism businesses – Covid-19 will help companies “delay the problem and mitigate financial problems”, but guarantees that the socialist executive will continue have to go. “The moratoria may even help mitigate the negative impact on the financial health of companies, but it is important that the government delivers on what it has promised to restore entrepreneurs during the pandemic period.”
With the high season just around the corner and the arrival of tourists in the country, it is expected that the seats in the restaurants will be occupied again. But Daniel Serra reminds that “being a restaurant full isn’t necessarily synonymous with big profits,” as treasury management gymnastics and the rise in commodity prices are still the dish of the day for restaurateurs. For the responsible person, the constant increases in raw materials have put pressure on the gross margin of the companies, hampering profitability. “The outlook for this summer is bleak, with many entrepreneurs waiting for better days to recoup their investment and get the results they want,” he insists, admitting that “the sector’s turnover will be higher this year, partly due to price inflation”, but, he adds, “in terms of net results, the outlook is not so optimistic”.
With regard to IVA Zero, the president of Pro.Var guarantees that “many hospitality entrepreneurs have noticed a rise in prices, creating suspicion about a possible use of the situation”. “The situation may be related to abuse by some suppliers, who end up transferring the amount referring to the VAT reduction, previously owed to the state, to the price of raw materials.
Faced with this situation, it is up to entrepreneurs to be vigilant and choose suppliers who are ethical and honest in their commercial activities,” he warns, reiterating the urgency of reducing the VAT rate from the current 13% to 6%. %, which “could improve the quality of service and gastronomy”.
Rute Simão is a journalist for Dinheiro Vivo
Source: DN
