Semi-deserted beaches, empty restaurants, unoccupied hotels and apartments. This is the picture currently in many resorts in the Algarve. And this is in July, a month that should be one of the busiest in the region.
The football championship, which affected tourism in the region drastically, is over and residents are now looking to the summer for a return of the high level of tourists that the Algarve usually enjoys. But, according to predictions from a recent tourism conference in Barcelona, a return to normal numbers is unlikely.
Algarve tourism is currently in a very critical situation with an average drop in tourist numbers of between 10 and 13 per cent from last year. In some areas, notably Praia da Rocha and Alvor, the situation is even worse, with figures pointing to a reduction of around 35 per cent. Business people in the region are now very concerned because significant improvements are not forecast for the rest of the year.
Cabrita Neto, president of HOTREC (The European Confederation of Hotels and Restaurants), speaking in Barcelona, commented that, “falls were in the region of 10 per cent”. Neto said: “There have been some small signs of recovery this month, but still far below expectations. July should normally be a very full month in the Algarve, but this is not happening and the outlook for August is not good either.”
Elidérico Viegas, president of AHETA (The Association of Hotels and Tourist Developments in the Algarve), claims he has repeatedly warned about the downturn. “When we forecast that this was going to be a poor year for tourism, even compared to last year which was very bad, nobody believed us. But now the numbers leave no room for doubt.” Viegas says that the national recession has hit families hard. “Portuguese tourism to the Algarve fell by 30 per cent in June and, in July, this will probably not change significantly. People are staying at home because of economic difficulties – it is a critical situation.”
Cabrito Neto confirms the collapse of the internal market: “Portuguese tourists, a very important market for the Algarve, are not coming in the same numbers as in previous years. On the other hand, there has also been a sharp drop in the foreign market of between 40 and 50 per cent. The German market is down, as are the Belgian and French markets. Only Britain maintains visitor numbers comparable to previous years. Although there are variations from zone to zone and from region to region, the current month will see falls similar to June.”
A prominent businessman in the region presented a gloomy picture: “We find ourselves in a situation which we have to manage on a day by day basis. It is complicated because, in contrast to last year, we don’t know what we can count on. This time last year, I already had clients assured for the whole summer and, as things stand now, I don’t even have half the apartments rented out,” he revealed.
Greed undermines sector
Opinions vary about the reasons for the ongoing slump, but many point to unrealistically high prices, particularly at the time of the Euro football championship. “We have to put our hand on our hearts,” says Carlos Tuta, president of Monchique Câmara. He says that, in Spanish resorts near the Guadiana frontier, he had met many Spanish tourists who had decided not to visit the Algarve because of the high prices.
Apparently, Spaniards were complaining that too many proprietors in the Algarve were demanding that visitors stay for at least seven days when they only wanted to stay for three days. Cabrita Neto also blames those involved in the Euro 2004 for conveying the false impression that the Algarve was full. “This dissuaded many people from coming, who would usually want to come at this time of year,” he said.
Many hotels are now offering last-minute promotions to try and combat the lack of reservations, a strategy criticised by Neto who regards this as a poor substitution for proper and sensible marketing. “The Algarve has always had the idea that it doesn’t have to sell itself but, given this state of affairs, it has to drag itself out of the chair and go into battle,” he says.
Algarve must “think hard”
Helder Martins, the president of the RTA, spoke to The Resident reporter Gabriel Hershman about the tourist slump. “We have to think really hard about what we have to do here in the Algarve. Maybe the way we are selling the Algarve is not right. We need to examine the quality of our hotels and our infrastructure and accept that clients have new motivations when they take holidays.”
Martins points out increased competition from other areas. “New destinations are flourishing every year – Tunisia, Turkey and Croatia. Some people, particularly Germans, find it easier to access these locations by car. Also some of these places are exceptionally cheap. We cannot hope to offer lower prices than those areas, because the price for hiring workers in the Algarve is always going to be higher. But what we do need is high quality to match our prices. It is not only Portugal – Spain is 25 per cent down as well.”