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Over 24,000 New Local Accommodations Opened Last Year
1 July 2018
Most of the new accommodations were registered in Lisbon, leading the Algarve to lose its relative participation in the total number of units existing in the country today.
The number of local accommodation units (AL) in the country took a significant leap upwards between 2016 and 2017. According to the Deloitte Consulting Hotel Atlas, at the end of last year, there were 51,014 AL sites in Portugal with a total of 205,261 beds, a growth of, respectively, 95% and 102% over 2016. In other words, the sector gained more 24,863 units of AL with 103,420 new beds in just one year.
“The growth results from the impact of increased registrations. As of July 2017, the amendments to the Legal Regime of the Installation, Operation and Functioning of Tourist Enterprises (RJET) came into force, which prohibits the operation of any local accommodations on the online platforms (such as Airbnb or Booking), that are not registered with the National Tourism Registry (RNT). Failure to do so can lead to heavy fines,” Jorge Marrão, a partner at Deloitte, told Expresso.
According to the study, most of these new units are in the region of Lisbon. In fact, the growth was so formidable that the number of units of this kind in the area is very close to the existing spaces in the Algarve, the region where the AL started and where it has always been more representative.
According to data from the Hotel Atlas, in 2016, Lisbon had only 4% of the total number of AL units in the country (and 5% of beds), but in 2017 that rose to 29% (and 28% of beds). The Algarve had 63% of the AL units in 2016 and 58% of the beds, and in 2017, it only had 38% of the total units in the country and 36% of the number of beds (see infographics).
“In Lisbon, most of the local housing hadn’t been registered with RNT. With the increase in the number of registrations, we saw a higher level of regional distribution, and the Algarve lost representativeness,” Mr Marrão added.
These were, in fact, the two regions where there were major changes in the supply of AL. In the rest of the country, this type of tourist accommodation is still not very expressive. In the Azores, for example, no AL enterprise have been registered, in Madeira, it is only 5% of the total and in Alentejo only 3% (see graphs).
Supply Grows for Every Type of Unit
LA was not the only type of tourist unit to grow in 2017. Hotels, apartments, rural hotels, tourist villages, tourist apartments and inns also grew last year, due to new businesses coming online. In AL, most of the growth is due to the registration of existing businesses.
According to the study, last year, 48 new tourist developments and 3,350 new units (rooms and apartments) opened. The total for each in Portugal has now reached 1,993 enterprises and 143,089 units.
“The greatest increase in tourism enterprises (hotels and the like) was registered in Lisbon, which had 292 in 2016 and 319 in 2017 (an increase of 27 projects),” says Mr Marrão. However, “in terms of accommodation units, the biggest increase was in the Alentejo and Algarve, which means that they open fewer, but larger, tourist ventures,” he added.
Nevertheless, the Algarve national participation fell, which Mr Marrão believes is due to the “high seasonality” and the lack of “a strategy to reduce its impact.” Also, he says, “it has been difficult to attract airlines to the Algarve, and Monarch’s insolvency has created an additional problem.” Since it was a pioneering tourist area, it is also “the most consolidated one in Portugal” and, for that reason, “the quality level of the supply is not high, except in certain areas such as the well-known Golden Triangle [Quinta do Lago, Vale do Lobo and Vilamoura].”
Lisbon, on the other hand, “is increasingly becoming a city break destination and the value of real estate has been generating greater returns for investors, which leads to a higher preference for hotel investments in this region,” Mr Marrão reasoned.
The study also revealed a change in the type of hotels being built in the country, in this case not from year to year, but in the last ten years, between 2007 and 2017. In this period, three-star enterprises and inns have largely disappeared, giving rise to more 4- and 5-star hotels. Two-star hotels have also been growing, competing with the AL.
“We went from a market where we bet on enterprises that served all types of tourists to more targeted ones that adjusted to increasingly demanding and segmented clientele, forcing the industry to adapt. The major international chains did it through the creation of sub-brands, a strategy that has also been implemented by Portuguese brands,” Jorge Marrão concluded.
Original Story: Jornal Expresso – Ana Baptista
Photo: Ana Baião
Translation: Richard Turner