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“Lisbon Could Have 5% More Tourists if it Built a New Airport And Conference Centre.”
5 December 2017
António Pereira says that the tourism sector is helping the economy, but needs support to be able to continue to grow.
Counting on more than 40 years of professional activity in the sector and with the group on several continents, António Pereira has run the Lisbon Sheraton, one of the most well-known hotels in the capital, for ten years. In an exclusive interview with the newspaper Jornal Econômico, he took on a tour of the evolution of tourism in Portugal, highlighting Sheraton’s positioning and unhesitatingly points out the failures that are causing a loss of revenues to Portugal, the capital’s economy and the tourism and hotel sector.
With so many years of experience, how do you see the evolution of hotels in the world and Portugal?
Hotels were usually seen as dorms. Today, fortunately, there is still a demand for hotels to sleep, but now, above all, it’s for having new experiences, gastronomic, but not limited to that, for the interactions that people have there, whether just to talk or to exchange reports of experiences about tourism destinations and hotel offerings. In this way, the hotel industry is very different from what it was ten years ago.
What is your impression of the industry’s boom in recent years?
At the moment, the sector is helping the economy in a very significant way. Both the economy of the country and the city of Lisbon. The hotels are and should continue to be in fashion, and are often considered the first option for tourists who visit Portugal and its capital.
In your opinion, what is the cause of this phenomenon? We have always been hospitable, always had good food, good wines, good weather, good scenery…
A few years ago, Portugal was unknown in the furthest markets. For example, in the United States, they thought Portugal was part of Spain. In this aspect, the work carried out by ATL – Turismo de Lisboa and Turismo de Portugal was very meritorious, having launched several promotional campaigns. That is, there has been a continual promotional campaign of Portugal as a tourist destination, but that has been felt more intensely in the last three or four years.
On the other hand, TAP also began to expand to other markets, and the golden visas also had their influence. All this made people who are influenced by the media choose Portugal and Lisbon for their residence.
Thus, the Portuguese market began to be spoken of around the world. There was an “I want to go because I’ve heard so many good things about it.” And that’s what made the tourism sector grow significantly in 2015 and 2016, and also this year, in 2017. Growth in Portugal, in Porto, in Lisbon, in the hotel sector, in Airbnb, which has an offering equal or superior to the hotels, in the end, a generalised growth.
How has Sheraton Lisboa benefited from this growth in tourism?
Of course, the Sheraton Lisboa Hotel, located in a city with this kind of demand, boasting an international brand that owns one of the most influential distribution channels in the sector, with the best hotel loyalty program in the hotel sector, has also grown, to an even higher level.
How so?
I can tell you that the hotel occupancy rates in the city of Lisbon have been between 65% and 66% in the last two or three years, and that the Sheraton has an occupancy rate of 75% at the moment. Our growth rate is above that of the city in general. I can also tell you that in our hotel segment, that of five-star units, we present the best occupancy rates and the best RevPar, that is the rate of revenue per person. The Sheraton Hotel has grown more than 20% a year in the last two or three years in these two indicators, and will grow another 15% this year compared to 2016.
Who are your main foreign customers?
Because of our geographical location, European markets are our main customers. We are talking about people from the UK, Germany and Spain, which is coming back after having declined significantly during the crisis. The Brazilian market is also growing again, and then there is the American market, which is coming back due to the new image of Portugal and the TAP’s efforts. Concerning emerging markets, China begins to appear, and we must also highlight the emergence of a significant market, which is the Arab countries.
And what is the percentage of Portuguese customers at Sheraton Lisboa?
Domestic guests represent 35% of our total customers and have been growing due to the economy heating up, especially in the business and corporate segments, and also in the city-break segment, for seeing events and everything that the city has to offer both culturally and artistically. On a national level, the corporate sector represents 70% of our hotel’s demand. On the international front, the city-break segment is in great demand, with the corporate segment in second, due to the increasing realization of congresses, events and incentive initiatives.
But can you give me any precise economic-financial data on the hotel’s activity?
As an approximate figure, I can tell you that, since the opening of the Sheraton Lisboa, only regarding accommodation, more than 5.8 million have passed through the hotel, accounting for 3.8 million overnight stays, generating a revenue of more than 500 million euros. In this period, we contributed to social actions worth more than one million euros.
In the good moment that we are going through, is there something that worries you regarding the sector’s future?
There are some issues regarding infrastructure in Portugal and in Lisbon that require, fundamentally, some adaptation. We have been concerned that the new Lisbon airport will only become a reality three years from now and that we have to make do until then with the existing infrastructure. There is a need to develop some means of minimizing the problems that we are already dealing with every day to avoid possibly decreasing demand for the city as a destination. Many of our customers arriving on short- and medium-haul flights spend more time in customs than on the flight itself. There needs to be a solution at the level of the Foreigners and Borders Service.
Is the new airport the only problematic point?
Unfortunately, not. The city of Lisbon will also have to adapt to the new tourist demand with the construction of a new congress centre which is modern, comfortable, that responds to the needs and the purposes required for this type of facility. At present, as we lack this kind of facility, we are losing tourists and businesses to competing destinations. And it would not be less important to look at seemingly minor things, such as the process of securing a modern means of transport, given the long-standing problems with taxis. That and the fact that we have the eternal problem of the museums being closed on Mondays as if there were no tourists on that day. And, at the airport, the entire handling operation needs to be modernised. These are the concerns that I have as an hotelier, which would be the same for any investor or shareholder of a company that wanted to invest in the hotel sector in Lisbon. These are the things I understand that we should do to be able to live together for another three or four years, at best, without the new Montijo airport.
And are you comfortable with Montijo’s solution?
As for Montijo, I think it’s still close to Lisbon. In this aspect, I think it could be a differentiating element if we could have a modern form of creating a river connection between the airport and the centre of Lisbon.
In your opinion, what are the losses that tourism in Lisbon and the country are registering due to the lack of a new airport and a conference centre?
In my opinion, if there were a new airport and a new conference centre operating properly in Lisbon, the capital would have at least 5% more tourists than it currently has.
Original Story: Jornal Econômico – Nuno Miguel Silva
Translation: Richard Turner