By 2019-08-08 InAlgarve

Algarve tourism slows down as luxury market booms

After years of “record-breaking” tourism numbers, the Algarve’s tourism sector is slowing down this summer. Hotel and tourism bosses admit ‘numbers are declining’ and the ‘feeling in the air’ is that there are fewer people around and more empty seats at restaurants and cafés compared to previous summers. Whether it is because of Portugal’s cooler weather this year, heat waves that have kept holidaymakers in their own countries or the emergence of rival destinations, the truth is the Algarve is “emptier” than usual. On the other hand, sources tell us the luxury market is ‘booming’.

The story of the Algarve’s tourism slowdown was picked up by national media last week although the warnings had already been made in July.

Algarve tourism boss João Fernandes said last month that bookings were down compared to 2018, mostly due to a “drop in French, German, Dutch and Irish tourists,” although he stressed the same was happening in rival destinations such as the south of Spain and the Canary Islands.

In fact, some hotels, tour operators and airlines were even lowering prices in a bid to attract more people to the Algarve.

Fast forward to August and the forecasts of a slower summer proved to be ‘on point’.

Data from the Algarve hoteliers’ association (AHETA) shows that the number of hotel room bookings fell 3% in July. While not a considerable dip, it’s a sign of a paradigm shift.

AHETA boss Elidérico Viegas explains that the tendency is for “numbers to stabilise or decrease slightly” after several years of increases, particularly between 2014 and 2016.

Speaking to Lusa news agency, João Fernandes justified the slowdown by saying more people are choosing to spend their holiday in the Algarve outside of the peak tourism season instead of only coming here for our sun and beaches.

It is a tendency that he says started in 2017, when around 70% of all overnight stays happened outside of the peak summer season.

In fact, the number of people travelling to and from Faro Airport was higher last October than in August 2015. According to the president of the regional tourism board (RTA), this is something that simply did not use to happen in the Algarve.

Fernandes also said more and more people are booking their holidays ‘at the last minute’.

This may be because of improved weather forecasts, as it is “much easier for holidaymakers to check the temperatures of their home country and of the country they are planning to visit then it was a few years ago”.

The heat waves that most of Europe experienced this summer, and which Portugal oddly dodged, has also affected the Algarve’s tourism numbers as people felt less tempted to leave their own countries where the weather was hot.

But there is also good news. The Algarve continues to welcome an impressive amount of Spanish, British and Portuguese tourists, and there are still hopes that more ‘last-minute reservations’ could help save the region’s summer.

In fact, despite the worries surrounding the British market due to the seemingly never-ending ‘Brexit’ drama, Elidérico Viegas says that the numbers of Brits coming to the Algarve is actually increasing after an 8.5% decrease in 2017 and a 6% drop in 2018.

While Viegas admits there is a “general feeling that there are fewer people in the Algarve this year than last year,” he believes it is because there are fewer people staying at holiday rentals as he says the reduction in hotel bookings has been minimal.

Luxury market booming
Completely different is the situation of the Algarve’s luxury market. Sources have told the Resident that most of the region’s luxury resorts are ‘filled to the brim’, going against the current of what is happening in the ‘middle-market’ segment of the Algarve’s tourism sector.

“Year to date we are above last year and on par with budget figures,” Katya Bauval from Vila Vita Parc in Porches told us, adding that “forecasts until the end of the year are good, showing a strong month of September.”

While some traditional markets have declined, the US continues to grow and is becoming one of Vila Vita’s main markets.

“It is interesting that the US has gained strength over the past year and consolidated itself as the third market in terms of nationality, displacing mature markets such as Switzerland and Belgium. For the first time ever, the US market was the no. 2 nationality in June,” Katya explained.

“However, we have seen a decline in business from certain markets that were stronger in the past, such as Switzerland, France or the Netherlands,” she said, adding that British operators “are already putting in place offers for the autumn and winter, in preparation for a hard-Brexit after October.” But on a general level, Vila Vita believes that things are ‘looking up’ for the Algarve and Portugal as a whole.

“I believe that Portugal in general has seen an increase in tourism, particularly from emerging markets, such as China, India or Brazil and some of it is trickling down to the Algarve too, with travellers looking for an all-round authentic Portugal experience, from city breaks to experiential journeys that include visiting the Alentejo and Algarve,” Katya said.

She added: “However, the Algarve has still a long way to go to compete with other luxury destinations that have been welcoming high-net-worth individuals for decades, for example by attracting large luxury private yachts and offering services to these kinds of clients that would normally go to St.Tropez or Sardinia or Palma de Mallorca”.


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