Hotels in Portugal slash prices as demand falls

Hotels in both mid and upper price range brackets are slashing their prices in order to stave off the effects of the economic recession.

According to national news agency Lusa, some hotel groups in Portugal have cut their room prices by as much as 40 per cent in response to falling demand as many British, Irish, German, Dutch and Spanish tourists stayed at home this summer rather than head for the Algarve.

Statistics for June published last week by the National Statistics Institute relating to tourism activities show that the average price charged for a room nationally plummeted to 31.30 euros per night compared with 34.80 euros for the same period in 2008. The Lisbon area was the area of Portugal which registered the biggest bargains with prices falling to 39.20 euros per person per night – a reduction of 23.7 per cent.

The INE also stated that hotel receipts in Portugal overall had fallen by 115.6 million euros in June.

The Accor Group confirmed that it had shaved up to 40 per cent off its hotel room prices but stressed that its promotions were not necessarily in response to the current economic crisis. The Vila Galé Group has admitted that it has cut its prices in Lisbon and Porto because of the lower prices being practised by competitors in those cities.

The average price for Vila Galé hotels in Lisbon and Porto in July and August fell to 60 and 65 euros per night per person respectively, representing a cut of 10 per cent in Porto and 15 per cent in Lisbon.

While the Tivoli and Sana hotel groups refused to release details on room occupancy rates, many other hotel groups are admitting to having reduced their price rates so their room occupancy rates, which have currently gone down by 2.2 per cent to 43.7 per cent, don’t fall by five per cent pushing towards a 45 per cent room vacancy rate.

Madeira and Lisbon were the two regions most affected by falling occupancy rates at 6.7 and 4.8 percentage points respectively.      

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