Low prices attract high occupancy

By PAULO SILVESTRE [email protected]

Occupancy rates in the Algarve so far this month are holding up well as the hotel industry charges lower prices in response to the economic crisis in the country.

According to the region’s hotel and tourism association (AHETA), the occupancy rate of hotel units in the region is above 90 per cent.

However, AHETA president Elidérico Viegas told the Algarve Resident this week: “The final result for the month of August will not save the tourist year in the region because one month alone is not enough and businesses have, in fact, lowered prices on their products.”

July saw a rise in hotel occupancy of 5.8 per cent over the same period in 2009 and Elidérico Viegas does believe that results for August will be “positive” due to the cheaper prices but the differences from last year “will not be very significant”.

Archie Miller, a regular visitor to Carvoeiro, told the Algarve Resident: “I have always found Carvoeiro to be quite expensive but this year I have noticed that prices have either remained the same or, in some places, even dropped. I went to one restaurant in Carvoeiro where a bottle of house wine is now a Euro less than it was last year.”

He added: “It is great to see local businesses reacting to the crisis in a way that helps customers, and the places where prices have fallen are definitely busier now than last year.”

Smarter marketing

According to Elidérico Viegas, the first three weeks of August generate the most income for the tourism sector in the Algarve, but the final revenue depends on the prices of products.

“The relationship between supply and demand will determine the figures that will be achieved,” he added.

Elidérico Viegas believes that 2010 will be worse than 2009: “Last year was the worst  year for 15 years in terms of tourism revenues and I think this year will be even worse.”

He said that for the tourism sector to grow in the future, tourism-related businesses must work together to build a better plan and improve strategies for the market.

“In the future, there must be a larger and smarter promotion of the products that the Algarve has to offer. This marketing has to be done in an intelligent way, always considering the supply and demand relationship. The export of goods and services can also be important to generate more revenue to the region.”

Do you have a view on this story? Please email Editor Inês Lopes at [email protected]