Turnover fell by more than €800 million during 2020, (-65.1 percent) as a result of falls in demand from the main external markets, (-75.1 percent), while the domestic market, despite increased demand in the summer months, ended the year with 1.1 million fewer overnight stays and 335,000 guests, (-21.2 percent).
According to data provided by AHETA (the Algarve hotel association), the average overall occupancy rate reached 27.7 percent in 2020, corresponding to 8.7 million overnight stays, the worst record ever. It should be remembered that in 2019 the Algarve had an average occupancy rate of 63.2 percent, or over 24 million overnight stays.
Total overnight stays fell by 15.3 million (-63.6 percent), including 14.2 million foreign tourists (-75.1 percent), particularly in the United Kingdom (-83.2 percent), which recorded a fall of 6 million overnight stays and 1.1 million guests in this period. All markets recorded very sharp falls.
Germany fell by 68.8 percent to 1.65 million fewer overnight stays and 270,000 guests, while the Netherlands fell by 54.7 percent (800,000 overnight stays and 102,000 guests) and Ireland fell by 90 percent to 1.3 million fewer overnight stays and 227,000 guests, to name but the most important external markets.
In these terms, it is estimated that the tradable goods generated by tourism in the Algarve have decreased by more than €5 billion this year. In addition, the travel and tourism group of the Banco de Portugal (BdP) shows a reduction in the order of €10 billion of tradable goods in 2020.
The economic and social impact of these developments on regional hotel and tourism businesses is reflected in high decapitalisation and an unprecedented cash crisis, both aggravated by the worsening of the pandemic crisis throughout the world, particularly in countries relying on tourists, as well as the lack of consistent support for the tourism economy and its main players - businesses.
According to AHETA, in this context, the survival of hotel and tourism businesses in the Algarve will depend fundamentally on the fiscal and financial conditions created by the government, with a view to maintaining competitive levels in the recovery phase, with a view to preventing the collapse of the tourism sector in the Algarve.
“Without consistent support,the economic recovery of tourism and of the Algarve is compromised, insofar as it calls into question the most valuable assets of regional tourism business, namely the know how accumulated over decades, embodied in management skills, in addition to the need to maintain and preserve quality human resources, knowledge of the channels of marketing and distribution of holidays, as well as the whole circuit involving the tourism business, etc”, said a statement from AHETA.
“To respond effectively to competitive challenges in the recovery phase, we need healthy, competent and solid hotel and tourism companies. Weak and fragile companies will not be competitive, especially as tourism is the most globalised economic sector in the world and therefore also the most competitive”.
AHETA reiterates that if the situation and the effects and or impact of the pandemic continue, “we will see the collapse of many tourism businesses in the Algarve” so it is essential that new support measures are reviewed and taken “immediately and urgently” to prevent this from happening.
“We expect that the recovery, although gradual and very long lasting, may already occur from the next tourist season onwards, although the main factors of uncertainty that have been plaguing the recovery of business remain, especially with regard to the behaviour of air transport, marketing and distribution channels, operators associated with intermediation and, above all, the evolution of the pandemic and the restrictions imposed by the countries of origin of tourists”, concludes AHETA.