Algarve heeds Spanish costa chaos warning

By ELOISE WALTON eloise.walton@algarveresident.com

Residential tourism could be the worst affected branch of the tourist industry in the Algarve according to several experts who debated the subject at a conference which was held at the Vale do Lobo resort on Tuesday, February 10.

Residential tourism accounts for a large proportion of visitors who come to the Algarve, with an estimated 120,000 second homes in the region. Around 50 per cent of all visitors to the Algarve are believed to stay in these private second houses or apartments instead of official tourist accommodation such as hotels.

António Pina, president of the regional tourism board, ERTA, said: “In 2006, I would have painted a different picture to what I will in February 2009. The housing market has certainly suffered and residential tourism could be the most affected part of the tourism sector during the current economic crisis.”

According to several speakers throughout the day, the reasons behind this dark picture are the devaluing of the pound sterling as well as the economic situation in the UK and Ireland, the region’s most prolific property buyers.

This has led to a significant reduction in the number of property sales in the region as well as the disappearance of off-plan purchases.

“Portugal was too optimistic, loans and mortgages were being given away too easily and projections for the prices and sales of new developments were completely distorted,” said Diogo Gaspar Ferreira, president of the Vale do Lobo resort.

Although residential tourism is still a grey area for researchers and tourist entities, it is generally described as seasonal home ownership. This, however, can mean home owners who live in the property for several months of the year, those who only come on holiday for a few weeks a year but let it out as well as those who buy property as an investment.

A survey conducted by PHD student Cláudia Almeida, between June and October 2007 in the departure area of Faro airport, revealed that the general profile of second home owners in the region were people aged in their mid fifties from the UK and Ireland. It also revealed a variety of other data such as the main activities that second home owners do while in the region such as walking (56.8 per cent), going to the beach (55.4 per cent) and golfing (36.6 per cent).

During the conference, sociology lecturer, Tomás Mazón from Alicante University in Spain gave dire warning to his Portuguese colleagues, showing the irreversible downfall of residential tourism along the Costa Blanca.

“A stretch of coast 200km long has no land left to build. Every last scrap of it has been used to build homes, the vast majority of which are second homes used just a few weeks each year,” he said.

Tomás Mazón shocked the audience with before and after photographs of the southeast Costa Blanca area of Spain, which has undergone major development of villa and apartment complexes.

“A recent article in a Spanish newspaper pointed to there being 90,000 apartments that are illegally rented each year,” he said.

According to the President of the regional association of Algarve Câmaras (AMAL), Macário Correia, the problems of private properties being rented out illegally has also provided a challenge to the Portuguese government, which has responded by creating a licence for property owners to declare this activity.

“Câmaras have faced new challenges in the last two decades with licensing and providing basic infrastructures for isolated and often ruined homes that have been bought and refurbished by foreigners,” said Macário Correia.

In response to the problems described and warnings of the irreversible damages caused by unplanned residential developments, many speakers also pointed out some key solutions to pull Portugal, and the Algarve region in particular, out of the crisis.

“There is no need to cry over spilt milk. Now is the time to act,” said António Pina. “In Chinese, the word crisis also means opportunity, and so the ERTA will do what it can to promote the residential tourism product.”

António Correia Mendes, Faro airport director said that the facility will be expanded to cater for an extra three million passengers per year as well as having specific services for frequent visitors.

“We predict the airport’s passenger numbers to grow from six million to nine million by 2023,” he said, adding that facilities such as an airport lounge, priority parking and fast track check-in will be created for frequent flyers, most of whom are second home owners in the region.

Diogo Ferreira said that Portugal will be one of the first countries in the EU to recover from the crisis.

“The Algarve has some great advantages over other countries. We are the closest sunny destination from the UK and have excellent accesses,” he said. “We need to promote a ‘buy in Portugal’ campaign alongside traditional tourism promotion.”

According to Diogo Ferreira, a range of measures should be applied to encourage the purchase of second homes in Portugal. These include investing in promotional campaigns targeting buyers from other countries such as Russia and Eastern Europe as well as the usual market, the creation of specific entertainment events in Portugal and an attractive fiscal regime for second home buyers.

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