International markets have made up for the shortfall
The Algarve is welcoming fewer Portuguese tourists this summer. The rising cost of living has had an impact on the wallets of the Portuguese who are either opting to stay home or look to cheaper destinations. Tourism officials admit this is the case but are not concerned. The Algarve just registered “record tourism accommodation revenue” and international markets have made up for the shortfall.
This shift in the region’s tourism landscape is hardly surprising. With the cost-of-living crisis, high inflation and rising interest rates, the average Portuguese citizen has seen spending power greatly reduced.
Despite government measures to tackle inflation, the truth is that many Portuguese who would usually save up to enjoy a holiday in the Algarve have this year been unable to.
They have opted to either stay home or looked elsewhere cheaper, even abroad. But tourism officials in the Algarve are not concerned.
New data from the National Statistics Institute (INE) shows that the Algarve’s tourist accommodation revenue reached €570.5 million, a 32.4% increase between January and June this year when compared to the same period in 2019, the sector’s “best year ever”.
The number of guests (2.2 million) and overnight stays (8.5 million) also increased 13.5% and 13.2%, respectively, during that period, while Faro Airport saw a 20.6% increase in passengers.
“The results are very encouraging,” said the region’s new tourism chief André Gomes. “It is clear that the Algarve is growing in value more than in demand.”
Ireland and the USA stand out as the markets that have grown the most at Algarve hotels in the first half of 2023, although Faro Airport is also registering more passengers from France, Netherlands, Belgium, Italy and Denmark when compared to 2019, while the number of British passengers is also very close to pre-pandemic levels.
As André Gomes told CNN last weekend: “The drop in overnight stays by Portuguese tourists (this summer) has been almost completely compensated by other markets.”
Gomes also offered up another factor which may be playing into Portuguese tourism slowdown.
“Last year, Portuguese tourists may not have felt confident to visit other destinations due to the pandemic and, therefore, many opted for safe destinations like the Algarve. This year, with freedom of movement restored, it’s natural that competing destinations will continue to attract Portuguese visitors,” he said.
Hélder Martins, president of the Algarve’s hoteliers’ association AHETA, admits holidaying in the region may be too pricey for some nationals. Speaking to Rádio Renascença this week, he said, however, that the Algarve is presently showing “good momentum with a strong occupancy rate. The Algarve’s loyal customers are here”.
Photo: INÊS LOPES/OPEN MEDIA GROUP
International tourists unaffected
SIC Notícias commentator Luís Marques Mendes has put the matter plainly, explaining that rising prices are “not a problem for foreigners”.
“The Algarve remains relatively competitive for foreigners who have much greater purchasing power than we do. However, for the Portuguese, cheaper alternatives, such as southern Spain, are more affordable.
“On the one hand, there is a social crisis in Portugal due to inflation and rising interest rates. People have less money in their pockets, and if they have less money, it’s natural for them to opt for holidays at home, shorter breaks, or cheaper destinations,” he said.
“But there is another reason which perhaps requires attention from tour operators and entrepreneurs in the Algarve, which is that the Algarve has become expensive, much more than usual, both in terms of restaurants and accommodation – and that also drives some people away.”
Despite these issues, Marques Mendes believes the Algarve will always retain its position as the country’s leading tourism destination.
“The Algarve continues to thrive because it’s a fantastic region. No Portuguese, from north to south, will fail to appreciate it.”
Bruno Contreiras Mateus, editorial director at Dinheiro Vivo and deputy editor at Diário de Notícias, has also penned an opinion article highlighting how rising prices are keeping more Portuguese away from the Algarve.
“Tourism in Portugal has become expensive,” he wrote. “And it’s particularly expensive for the middle and lower-middle classes. August is the month when tourism typically surges, yet the National Road 125, which crosses the Algarve from Vila Real de Santo António to Vila do Bispo, and the A22 motorway – known as the Via do Infante – from Lagos to Castro de Marim, haven’t seen the same increase in traffic as in previous years.”
“It’s the revenue that has been growing and is at record levels. The higher prices compensate for the lower number of tourists. However, the fact remains that these higher prices, for a Portuguese middle class already burdened by rising housing costs and general living expenses, mean a summer away from Algarve beaches. For these individuals, holidaying in the Algarve has become expensive.”
Quality over quantity
Meantime, the Portuguese Hotel Association (AHP) has given these latest developments a positive spin, stressing how they may help the Algarve establish itself as a higher quality holiday destination, which is “only possible with lower occupancy pressure and a more personalised service”.
On the other hand, André Gomes, president of the Algarve Tourism Region (RTA), assures that the Algarve continues to offer “options for every budget” and that the forecasts for the rest of this summer as well as for the usually quieter months after September are looking “very positive”.
The Algarve also continues to receive its usual summer endorsements from its political figures, such as Portuguese President of the Republic, Marcelo Rebelo de Sousa, who has once again chosen the region for a short summer holiday.
Marcelo was seen this week at Monte Gordo beach in Vila Real de Santo António taking ‘selfies’ with beachgoers and enjoying a dip in the sea, while political party PSD held its usual summer event Festa do Pontal in Quarteira on Monday.
Prime minister António Costa is also a regular visitor in August, and usually stays in the Carvoeiro area.
Despite lower numbers from the domestic market, the Algarve still looks to be on track for another successful summer season.
Also read Overnight stays in Portugal surpass pre-pandemic levels
