By: ELOISE WALTON
RESIDENTIAL TOURISM in the Algarve is expected to fall for the next two years, before making a slow recovery from 2011, according to a report by the Economics Research Associates (ERA).
As well as the Algarve, Portugal as a whole is expected to be affected by the downturn in residential tourism because of the global economic crisis.
Muriel Muirden, the director of ERA, spoke about this issue in Lisbon on Tuesday, where she identified the opportunities and challenges that Portugal will face until the end of 2010.
The results of a survey on residential tourism market demands, carried out by the International Tourism Advisers ILM – THR, were also revealed earlier this week. This showed that the second highest group of tourist property owners in the Algarve, at 29.5 per cent, are from the UK.
Of all the foreign tourists questioned, more than 45 per cent intend to rent their properties, the majority of which are located in the counties of Loulé, Albufeira, Tavira and Vila Real de Santo António.
Murial Muirden said that the effects of the global economic crisis have significantly affected the UK, the principal second home market buyers in the Algarve, and that falling house prices will only start to recover to the rate they were in 2007 from 2012.
Despite this downturn in the British market, Muriel Muirden believes that Portugal is a destination that will recover in the medium term because of the “tourist developments that are currently underway, which are very interesting”.
New markets
The director of ERA added that Portugal should remain faithful to its traditional market of British, German and Scandinavian tourists, although the growing interest from middle class Russian buyers, who are keen to travel and spend, should also not be ignored.
“Portugal’s appeal will remain with the British market. Portugal should remain faithful to its traditional markets, which have had good results,” she said.
“Golf is also giving good results, but there are challenges to overcome to satisfy environmental criteria and the most demanding tourists. Golf is no longer an ideal anchor for a resort, if it is in an isolated place for example,” she added.
Although the Algarve still has a lot of potential to attract tourism because of its coastline, the Alentejo “needs to market itself in a sexier way”, to highlight its quality wines, food and history, according to the director of ERA.
Murial Muirden added that quality and good pricing is key to remaining a sought after destination because the current economic situation has opened the eyes of many buyers who want a certain quality of life as well as a safe investment.
“We are going to have buyers who are much more attentive and who really evaluate price in relation to quality,” she said.
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