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Brexit Woes Cause Revenues in the Algarve Drop by €85 Million
11 February 2018
Visitors from German, Dutch and Irish markets compensated for the drop in British arrivals. Increased prices drove hotel revenues up to €1 billion, an increase of 9.4%.
Never has so little English been heard in the Algarve. After Brexit, the British have tightened their belts and stopped travelling, worried about the impact of the exit from the European Union’s on its economy and jobs, especially as they now have fewer euros in their pockets – the British pound lost almost 15% of its value in the last year and a half.
“Beginning in June [when Article 50 was invoked, beginning the two-year process of Britain’s exit from the EU], the British market declined significantly, with values below the average of the previous five years. In cumulative terms, there has been an 8.5% drop in occupancy compared to 2016,” said Elidérico Viegas, president of the Association of Hotels and Tourist Enterprises of the Algarve (AHETA), in statements to DN/Dinheiro Vivo. Just in January of this year, arrivals of British tourists fell by 19.4%.
Brexit has subsequently led to a reduction of between 6% and 8% in the revenues of hotels and tourist enterprises in the region. Portugal’s national accounts suffered a loss of €85 million, £76 million. Total revenues only avoided a decrease due to the higher prices being charged at hotels in the region and the influx of tourists from other countries that offset the decline in the number of UK arrivals.
“The markets that compensated for the decline in the UK market were the German, Dutch, Irish, and other small markets with lesser relevance in the total number of overnight stays. In addition to the domestic market, which also rose by 1.2%,” Elidérico Viegas explained to the DN/Dinheiro Vivo. “The smaller markets together already represent more than the German market,” he said.
Total hotel revenues in the Algarve, which is divided between accommodation and food expenses for tourists, totalled 1.025 billion euros at the end of the year, up 9.4% over the previous year, while occupancy increased by 1.9%. The data points a recovery in the prices charged in the region, which had suffered in the aftermath of the financial crisis of 2008,” the president of AHETA noted.
The trend in the recovery of average prices has been observed nationally. This Wednesday, the INE will announce the data concerning tourist activity in December, which should confirm growth to historic highs in income, overnight stays and number of tourists last year. Through November, Portugal saw the arrival of 19,462 guests, 62.1% of whom were foreigners, and recorded 54.8 million overnight stays. The Algarve ranked first in the national ranking in the number of overnight stays, with 14.7 million.
“The region leads the country in terms of the number of arrivals of foreigners (37% of the country’s total),” stated a report by Tourism BI, a statistical tool managed by Turismo de Portugal, which continues to rank the British as the principal visitors to the area. But their participation in the total is declining: the British accounted for 37.2% of the total number of foreign guests who visited the Algarve region during this period, in 2013 they were worth more than 40%.
Original Story: Diário de Notícias – Ana Margarida Pinheiro
Photo: Paulo Spranger / Global Imagens
Translation: Richard Turner