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Increase in Tourism Leading to New Hotels
17 June 2018
More tourists also signify additional jobs. In the first quarter of the year, more than 21,000 new jobs in food service and accommodations were created.
The growth of tourism in Portugal is continuing to lead to the appearance of new hotels while creating new jobs. In all, about a hundred new hotels will begin operating in 2017 and 2018e, most of them in Lisbon and Porto. This year alone, AHP’s estimates point to 61 new hotels and 23 re-openings after renovations, while last year 45 new units were inaugurated. But the truth is that there are always delays in inaugurations, whether due to delays in the approval and licensing of projects, logistical difficulties in complying or changes to investors’ strategies.
As part of an analysis of the real estate pipeline, Confidencial Imobiliário revealed that 80 new hotel projects were licensed last year. Lisbon and Porto continue to be the two municipalities with the greatest number of new projects under development, although adjacent municipalities such as Sintra and Matosinhos have also benefited from an increase in the number of new projects, mainly in 2017, with three new hotels added in each one.
“Over time, investments in hotels have begun to move out of its previous concentration on Lisbon, dispersing geographically and bringing life to less central markets. In fact, 60% of the growth in the number of new portfolio projects in 2017 took place in non-metropolitan regions,” says Ricardo Guimarães, director of Confidencial Imobiliário.
But added to the traditional hotel segment are the local accommodations (LA), which have more than doubled in two years and which, in terms of the number of beds, have already surpassed the hotels.
The numbers are straightforward: the 59,300 local accommodation units in Portugal have a total of offer 229,0000, well above the 181,000 beds offered by the country’s 1,200 hotels.
New Jobs
The increase in the hotel and local accommodation sectors has also contributed to the creation of new jobs. According to the Portuguese Association of Hospitality, Restaurants and Similar Institutions (AHRESP), the sector was responsible for the creation of more than 21,000 new jobs in the first quarter of the year.
“For the first time in 10 years, the start of 2018 saw employment levels register a new high in the first quarter, with a total of 315,500 jobs, and a year-on-year increase of 21,400 new jobs. Restaurants alone created 17,400 new jobs, while housing added another 4,000,” the association announced.
José Manuel Esteves, general director of AHRESP, also guarantees that companies are hiring, even in a low season, “which means that we are on the right track in the fight against seasonality.”
In fact, the fight against seasonality has been a prime mover for the sector. According to the Secretary of State for Tourism, Ana Mendes Godinho, the battle has been won, with tourism growing throughout the year, guaranteeing income even during the low season and generating employment that is not just seasonal.
Other aspects of the industry that must be improved include average stays for tourists and increases to prices. Nevertheless, according to the latest data released by the National Statistical Institute (INE), there was a slowdown in tourist activity in April after a series of record-breaking months. The pattern was broken by two exceptional circumstances: Easter and rain. “The results were influenced by the calendar effect of the Easter period, given that in 2018 the holiday boosted overnight stays in the hotel industry in March and in April there was abnormal levels of rainfall,” the INE reported.
In April, hotels registered 1.8 million guests and 4.7 million overnight stays, down 5.4% and 8.4% (+11.7% and +9.9% in March, respectively). Resident overnight stays decreased by 9.3% while nonresidents decreased by 8%, contrasting with the growth in March (+15.4% and +8%, respectively). Also, the average stay (2.62 nights) fell by3.1% (-2.9% for residents and -3.5% for non-residents). The net bed occupancy rate (49.9%) decreased by 4.7 percentage points.
Also, total revenues slowed to 2% growth (+17.5% in the previous month), reaching 276.7 million euros. Room revenues reached 199.9 million euros and increased 2.1% (+21.2% in March).
Fewer tourists
The thirteen main emitting markets accounted for 82.9% of non-resident overnight stays and showed mostly decreasing results. United Kingdom overnight stays (20.9% of total overnight stays by non-residents) fell by 8.9%, continuing the trend of recent months. In the first four months of the year, this market decreased by 7.0%.
Also, the German market (14.4% of the total) showed a reduction of 9.3% in April. Since the beginning of the year, this market has fallen by 2.3%. The overnight stays of French guests (10.7% of the total) fell by 7.3% in April. Among the five main issuing markets, this market was the only one with growth in the first four months of the year (+2.7%).
The Spanish market (8% of the total), traditionally sensitive to the ‘Easter effect’, showed a 39% reduction. In the first four months of the year, this market registered a slight decrease of 0.7%. The overnight stays of guests from the Netherlands (4.9% of the total) decreased by 13.0% in April. Since the beginning of the year, this market has declined 12.4%.
In April, the growth of the North American (+14.8%) and Brazilian (+10.2%) markets stood out. In the first four months of the year, the highlights were the US (+20.1%), Brazil (+13.5%) and Sweden (+13.4%).
In April, there were reductions of overnight stays in all regions, most notably in Alentejo (-15.4%). The smallest decreases were recorded in the North (-3.1%), the Azores (-4.3%) and Lisbon (-4.9%).
Original Story: Semanário SOL – Sónia Peres Pinto
Translation: Richard Turner