Brexit – will it impact residential tourism?

With a potential two weeks to go until the United Kingdom crashes out of the European Union, the impact that Brexit could have on Portugal’s residential tourism market was debated by industry leaders last week at SIL 2019.
António Ramalho, the President of Novo Bank who was a keynote speaker on the panel warned of the need for Portugal to have a competitive and stable tax regime in order for the country to remain attractive for overseas investment, particularly the UK market which represents one of the most important markets for residential tourism when it comes to buying a second or retirement home in Portugal.
The banker was speaking at Portugal’s Property Fair Salão do Imobiliária during the conference ‘Brexit: Will there be an Impact on Residential Tourism?’ which ran at the city’s trade fair centre Feira Internacional de Lisboa (FIL).
António Ramalho said that the United Kingdom was a lot more aggressive at attracting investment from rich overseas residents and much more aggressive than Portugal In selling products such as the Golden Visa regime which offers residency permits and the chance to citizenship through property investment with á la carte programmes.
The banker who has had the unenviable challenge of building reputation in a new national bank from the ruins of former Banco Espírito Santo (BES) which collapsed in 2015, said that Portugal did not yet have such a raft of regimes to bring in investment and added that a programmes that had attracted €4Bn to state coffers since 2012 should be widened to also include companies.
João Fernandes, President of the Algarve region’s tourist office (Região de Turismo do Algarve) stressed that Portugal is prepared for Brexit and remembered that Portugal was the first country to introduce a unilateral contingency plan with a raft of measures which included the British living in Portugal and the UK.
“All measures were met. The fact that we were the first to do so has been an advantage. The Portuguese and Algarve tourist offices had encouraged more air links, namely to the Algarve region with links to 25 airports in the UK secured by over 10 companies,” he said.
João Fernandes added that they would continue to work on promoting the Algarve as a destination. “We had always borne in mind less favourable expectations. We haven’t got a crystal ball but we should continue to market our international schools and broadcast the fact that we have the Portugal Health Passport and these are positive signs.”
Bernardo Trindade, the CEO of Portugal In was also at the conference. Portugal In was created followed the decision of the United Kingdom to leave the European Union in the referendum of June 2016 to address specific challenges which need to be addressed by the remaining member states in the EU.
A temporary task force, Portugal IN aims to attract more foreign direct investment (FDI), in the uncertainty of Brexit with the following purposes:
Portugal IN has the following purposes: Working with industries across the country on how to attract FDI; Promoting and boosting the unique selling points of Portugal and Europe and selling them as competitive elements to attract FDI; Identifying and monitoring FDI opportunities together with different government bodies already operating in Portugal in this field; Identifying the barriers and constraints that are facing key FDI projects in Portugal; Presenting to the Government the necessary legislation or procedures required to overcome identified constraints; and constructing integrated solutions in a “one stop shop” model for foreign investors who wish to remain in the EU after Brexit.
“There are areas which have public-private responsibilities and for which it is absolutely essential to continue presenting proposals so as to ensure fundamental issues such as health and education” he said, highlighting the importance of a stable and welcoming tax regime.
Rui Meneses Ferreira, President of the Portuguese Association of Resorts (APR) warned that the industry would have to prepare itself for some uncertainty and said that some slowdown had been noticed from UK house buyers in the Algarve region, particularly in the Albufeira-Loulé corridor with a reduction of 50%.
“Nevertheless, prices today are 10% more than when Brexit referendum was announced. This means that we should be optimistic. We should not just be limited to the competitiveness of the Euro against Sterling” he said agreeing with António Ramalho that “our competitiveness also lies in urban and tourism planning which enables us to meet the interests of the British community.”