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Study shows hoteliers have reasons to feel confident

by PAULO SILVESTRE

[email protected]

Occupancy rates at four and five star hotels in the Algarve have increased, according to a study by ILM Advisory, a company specialising in the sustainable development of tourism and hotel sectors in Portugal.

The data, collected from 26 four and five star hotels, showed that hotels increased both their occupancy rates and revenue per available room (RevPar).

From January to September this year, occupancy in five-star establishments increased by 45%, compared with 42.6% in the same period last year, although the average price per room achieved fell by around €6 to €150 due to competition in the sector, leading to a lowering of prices in five of the 11 five star hotels reviewed. However, the RevPAR increased from €55 to €58 in 2010 – “and the year isn’t over yet”, said ILM.

The survey revealed that German tourists choose the most expensive hotels, with an average price per room per night of €200, while the Portuguese market, representing one third of the total demand during this period, was the main factor in mitigating the fall in demand for five star accommodation.

The study confirmed the decline in the importance of the classic tour operator in terms of tourist demand and the increase of last minute and online reservations.

Revenue generated from golf has also suffered a decrease, which means more people are seeking the region for its sun and sea winning formula.

Meanwhile, four star hotels saw their occupancy rates rise from 56% to 58% during the same period, with an increase of €5 in the average price per room achieved (€67). As a result of the increased occupancy rates, the RevPAR grew to €32.

The Portuguese are the ones who seek four star hotels the most, followed by the British and the German.

According to ILM, tour operators offering five star accommodation have relatively little weight in tourist demand when people are searching for a hotel. Those offering four-star establishments still represent 37% of the total demand, but this too is falling because of online reservations.

ILM’s report emphasised the fact that the summer months were crucial for the sector but added that the data does not include results from the fourth quarter, which traditionally brings the average occupancy rate, price and RevPAR down.

In its forecast for 2011, ILM predicts that five-star hotels will experience a small drop in occupancy compared with 2010, but will maintain the average price. Occupancy rates are expected to average 57% next year, with an average price of €170.

In the four-star market, the 2010 rates in occupancy and RevPAR are expected to be maintained.

Meanwhile, hoteliers’ expectations for the New Year’s Eve in the Algarve are up.

Hotels have launched special programmes, which include two nights’ accommodation and street entertainment sponsored by Câmaras.

Reservations so far led the hotels to expect an increase in occupancy rate in comparison with last year.

Elidérico Viegas, president of the Algarve hotels and resorts association (AHETA), said: “The New Year celebrations will represent a serious test for the country given the bad economic situation it is facing.”

He added that the reduction in market demand from the UK “was offset by an increase in the number of Portuguese tourists visiting the region”.

“Not such a long time ago, the Algarve tourism industry was run almost exclusively around the British visitors, but now it is the Portuguese and Spanish tourists who seek to holiday in the region the most,” he said.

Meanwhile, tourist agency Garvetur in Vilamoura, which works in the residential tourism market, has said the number of bookings it has taken for the New Year is 10% higher than 2009.
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