By: CHRIS GRAEME
IN THE 1970s and 1980s, tourism in Portugal was cheap, cheerful and aimed at the masses – the package tour crowd. And for a while, packing them in by the thousand in quickly thrown up hotels in the Algarve worked, and the money rolled in with healthy year-on-year growth rates of between seven and 10 per cent.
Not that there’s anything wrong with package tours, it’s just that the rest of the developing world has discovered them too and is capitalising on them fast.
Then suddenly, the British, French and Germans, not to mention the Dutch and Irish, discovered cheaper deals to be had further a field, in up and coming new tourist destinations such as Croatia, Turkey, Bulgaria, Romania and Mexico.
Of course, last year, Portugal enjoyed impressive growth rates of around 17 per cent on 2005 in terms of hotel occupancy, while charter flights were packed to capacity. But the wider choice and greater competition, and the slow down in the Portuguese construction sector have caused both the government and tourism investors and developers to take stock and think again – the answer was New Tourism.
So what is New Tourism? And who is it aimed at? In short, New Tourism is aimed at affluent, although not mega rich, middle class Portuguese and Western Europeans, particularly the English and Irish, with money to spend on a property investment which is not only a holiday home, but a growing concern, managed and serviced in its entirety by hospitality and leisure professionals in the know.
Addressing the Swedish, Swiss, Finnish and Luxemburg Chambers of Commerce last week in Lisbon, Dr. Carlos Vasconcellos Cruz, Executive Vice-Chairman of Orizon SA, a style and real estate group which is the leading exponent of New Tourism, explained how it worked.
Orizon SA is already poised to become Portugal’s leading resort developer within the next few years and its unique selling point and product package is the emerging residential resort market with a solid reputation for quality and value – based on a sustainable business model that can be easily rolled out in any region, run by a strong management team with expert understanding of land entitlement in Portugal.
“Westin Campo Real Golf & Spa Resort is the first of a number of pioneering developments that we have planned for Portugal, and it’s already a huge success with 98 per cent of properties sold and an appreciation of 7.5 per cent on apartments, 14 per cent on villas and 17.8 per cent on select townhouses between 2004 and 2007,” says Dr. Carlos Vasconcellos Cruz.
The government and tourist associations alike recognise that tourism is vital for the Portuguese economy and, as such, is a national priority for Portuguese National Interest projects (PINs) as well as the strategic national plan for tourism (PENT), but to stay ahead of the game, it is recognised that tourism must evolve to cater for new niche markets.
Residential tourism is different from golf, hotel, sea and sun holidays, although, of course, it does incorporate these traditional staples. It creates well defined rules and is well planned in a sustainable and ecological way with legal restrictions that safeguard quality.
The New Tourism aims to have a focal point, a potential for development, liquidity and an investment value. Above all, it aims to develop and sustain a long term business and maintain the value of the investment.
The business model has clear economic, social and environmental dimensions supported by rigid legislation that does not allow chaotic development. “It’s a long process and it’s not perfect yet, but we’re getting there,” explains Dr. Carlos Vasconcellos Cruz.
The priority for both the government and developers alike is the so-called under-explored Silver Coast (Costa de Prata) which is an easy 30 minutes drive on the motorway from Lisbon.
Located on the coast between Lisbon and Oporto, and intersected by the A1 motorway, its white sandy beaches are framed between Aveiro to the north and Peniche and Nazaré to the south with charming historic market towns such as Óbidos, Caldas da Rainha, Batalha, Marinha Grande and Figueira da Foz dotted along the coast and the cities of Leiria and Coimbra to the east.
The recipe for its success lies in the fact that the Silver Coast and Westin Campo Real Golf & Spa Resort are in an ideal location, a stone throw from Lisbon and its airport, have solid tourist infrastructure and an excellent package of services and leisure activities from health spas to horse riding.
“Services and maintenance are vital otherwise the property suffers a decrease in value. Swimming pools need cleaning, lawns need cutting, and so on. Once the property is bought, the investment is managed as a growing concern and asset by sub-renting or renting while the owner is in their country of origin. It is not timeshare however, as the owner is the sole proprietor and capitalises on the investment and can eventually retire to it,” says Carlos Vasconcellos Cruz.
Unlike a fractional timeshare, the property is bought under a contract of five years through a hotel and leisure group like Starwood (Sheraton Hotels among others) which exploit it while the owner is away, for mutual economic benefit. “We don’t have a future in the low quality market; there simply isn’t a sustainable market in the low end.
“Instead, we’re aiming at affluent people who like to enjoy life and want to make a logical investment,” he concludes.
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