80% of hotels closed
Portugal’s hotel association AHP says that 80% of the country’s hotels are now closed because of the latest State of Emergency and lack of guests.
In an interview with Jornal Económico, Raul Martins who heads the AHP, warns that the “losses from 2020 and projected losses for 2021 will only be recovered over the next four or five years.”
Portugal’s tourism industry has been facing a wasteland for months, with the country’s hotel industry being described as “all at sea without a sail”.
He told JE, at the moment around 80% of hotels national are shut. Regarding bankruptcies, the hotel sector in terms of size, is more elastic and until the pandemic appeared companies were better capitalised had paid off debts in the good years, and have been fairly solid (to withstand) the crisis.
However, those hotels which opened recently and have already been in a difficult situation will have to find debt rescheduling solutions in order not to run out of cash or close altogether,” says Martins.
The AHP stresses that it has from the very start been monitoring the impact of Covid-19 on the hotel sector, and in March carried out a survey which estimated the sector would lose around 7.3 million beds and €800 million in four months.
In April the association estimated that 85% of staff would have been laid off and by the end of June 11.8 million beds had been lost and €1.2Bn in revenues.
The months went by and the situation got worse. In June a survey revealed that half of Portugal’s hotels were shut in June and around 30% were closed over the summer months (July, August and September).
That said, some regions with open spaces and away from large towns and cities did well, such as those in the Alentejo and Centre.
The impact on tourism revenues has been a disaster compared with 2019, the best year ever in which receipts exceeded €18.4Bn with hotels responsible for 25% of the total or €4.48Bn that year.
That year Portugal’s hotels had 58 million bed take-ups, but all other business segments within the hotel sector, restaurants, drinks (bars), beauty treatments and wellness, events, congresses, meetings, so the actual losses for the hotel sector and those liked to it and depending on it are huge for the economy as a whole, not just the €3.6Bn lost from cancelled bookings or empty rooms.
“The recovery of our sector, given that 90% of our tourism and hotel sector relies on air transport (overseas visitors) will only begin in 2024,” the hotel association head predicted.