Coronavirus outbreak deals massive blow to Algarve
The coronavirus outbreak is posing a major and unprecedented challenge to the Algarve, Portugal’s main tourism destination and with an economy that relies mostly on tourism.
With the number of businesses closing temporarily due to the virus rising every day, the question on everyone’s mind is, how will the Algarve weather this storm? And especially with Easter just around the corner, the unofficial start to the peak season, when businesses would benefit from the influx of visitors, particularly Spanish (borders are now closed to tourism from our neighbouring country).
Most street restaurants and shops in the Algarve have closed, and shopping centres are virtually empty. Events have been cancelled. People are being told to stay home, leaving streets deserted.
Portugal has closed its borders with Spain – only Portuguese citizens and residents and people transporting goods are allowed to enter.
As we were going to press on Wednesday, President Marcelo Rebelo de Sousa was expected to declare a State of Emergency in the country, which would lead to further restrictions and measures in an effort to contain the virus.
It’s a war-like scenario for a region that survives off its huge influx of holidaymakers.
For now, it seems only time will tell how dire the economic impact of this pandemic will be, although Elidérico Viegas from the Algarve hotelier association (AHETA) warns the effects could be unprecedented.
“People are disoriented,” he told Barlavento newspaper.
Around 80% of the association’s members have reported a decrease of around 30% in bookings compared to the same period last year.
In other words, “this doesn’t mean that 60% of bookings have been cancelled” as many reported. Instead, around 80% of hotels and accommodation establishments in the Algarve have had bookings cancelled, while the other 20% are still uncertain as they work with tour operators and have not yet been informed.
These numbers are “just an average”, Viegas pointed out, adding that AHETA is carrying out a weekly survey to better understand the effects of the pandemic on the hotel industry.
But it isn’t just the Algarve’s tourism sector that is being hit.
AHP, the national association of hoteliers, predicts that Portugal’s hotel industry could lose around €800 million and 7.3 million overnight stays in the next three to four months due to cancellations.
Meantime, the World Travel and Tourism Council warns the pandemic could cut 50 million jobs worldwide in the travel and tourism industry.
The Resident tried to obtain comment from the Algarve’s tourism chief João Fernandes but did not receive a response at the time of going to press.
The property sector is also feeling the effects of the pandemic with several deals being postponed or cancelled, particularly by foreign buyers (see story on page 30).
Algarve businesses “won’t give up”
Algarve business association NERA has vowed that businesses “won’t give up” despite the profound economic impact that is expected due to the coronavirus pandemic.
“Nobody knows when and how this crisis will end,” the association said in a statement sent out to newsrooms on Monday, stressing how the country’s situation changed in just a few weeks.
“Our economy is on the verge of a crisis that will evolve unpredictably. We are living a worrying moment of political and economic uncertainty in Europe and across the globe,” NERA said.
While the association’s affiliated businesses acknowledge and agree that the priority for now is “the health and lives of the Portuguese people”, they stress that they also have to prepare for the economic crisis that is on the horizon.
The association applauded the government’s measures so far, which at the time included a €200 million credit line but which has since been bolstered to €3 billion (see other story on this page).
NERA now aims to “clarify the details of the proposals” and “ensure that they can be applied quickly and in a simplified manner”, whilst also helping regional companies benefit from them and pressing the government to implement other measures to help Algarve businesses.
By MICHAEL BRUXO