Essential Business

Portugal and Ireland: Europe’s sustainable tourism destinations

 In Events, IPBN, News, Tourism

INCREASED TOURISM DEMAND IS ALREADY PUSHING PORTUGAL’S INADEQUATE TRAVEL INFRASTRUCTURE BEYOND CURRENT CAPABILITIES. IMPROVING ACCESS BY AIR, SEA AND RAIL WILL BE A CHALLENGE FOR THE GOVERNMENT AND THE TOURISM SECTOR

The Portuguese Government is nothing if ambitious in its targets for tourism for the next five years to 2027.

Marketing Portugal as an environmentally sustainable destination, with a diverse quality offering that leans away from solely sun, beach and sea package holidays, its tourism strategy has been well designed by the consultants and strategists who advise its tourism office, Turismo de Portugal.

It hopes to attract more than the 27 million it achieved in the record year of 2019, and the signs were encouraging this year with the total number of foreign visitors in Portugal in the first seven months of 2022 at 8.1 million — but a million short of the same period in pre-pandemic levels, but with July numbers already exceeding 2019 levels.

Portugal’s tourism sector accounted for almost 15% of GDP before the pandemic. Despite July’s strong figures, the cumulative number of foreign visitors in the first seven months of this year, at 8.1 million, remains about a million short of the same period in 2019.

Visitors from Spain accounted for the largest share of Portugal’s total arrivals in July with 285,900, followed by Britain and the United States, which has recently grown as a source of tourism.
Travel to the area has been recovering not least thanks to Portugal’s location on Europe’s southwest tip far from the war ravaging Ukraine, and people’s general perception of it as a safe place.

Portugal has a lot to learn too from how other countries of a similar size and population market themselves as a ‘must-visit’ destination. Ireland is certainly a case study, while its citizens have long had a soft spot for Portugal’s sun-drenched Algarve beaches and top-quality golf courses.

“Ireland is Portugal’s 6th most important tourist market, corresponding to 299,000 trips (3.4% market share), 1.5 million overnight stays (3.6%) and revenues of €308,400 thousand. (2.7%) with the Algarve most sought after (81.6%), followed by Lisbon (11.4%) and Madeira (2.8%)”. That was according to Turismo de Portugal’s statistics in 2017, even before the 2019 record year, although Ireland did slip down to 11th place as a tourist supply market last year.

It was against the overall backdrop of a significant rebound in tourist numbers — both Irish and international — to Portugal that the Irish-Portuguese Business Network (IPBN) held its ‘Tourism Conference’ on September 29 in Lisbon.

IPBN Chairman Geoffrey Graham pointed out that the conference was timely because on 27 September it had been World Tourism Day and World Maritime Day on the actual day of the conference. (29 September)

“We are experiencing ‘revenge tourism’ after three difficult years, whereby some entities, including airlines, are able to say: ‘this is the best year ever’ in terms of results. What better time to focus on tourism and see what we have learned from the pandemic and how we have accelerated into a post-pandemic boom”, he said.

In September the FT put Portugal as one of the ‘seven economic wonders in a worried world’.

The value of the tourism trade between Ireland and Portugal is €1.2Bn out of a total trade of €2.7Bn — an important and hefty slice of the pie.

Sustainability at the heart of recovery

In his opening speech at the conference at Universidade Europeia, the Ambassador of Ireland in Portugal, Ralph Victory said: “After 2019 recorded its best year ever in terms of tourism to Ireland, with more than 11 million international visitors, Ireland is working on a new National Tourism Policy to ensure that sustainability is at the heart of the recovery sector.”

In light of The Sustainable Tourism Working Group’s recently published series of actions to develop sustainable tourism practices that can “be implemented immediately” even before the approval of Ireland’s new general tourism policy, the Ambassador told attendees that the pandemic was an “opportunity to rethink and re-evaluate Ireland’s tourism offer and begin to address the sustainable development of tourism in a more significant way during the recovery and reconstruction phase that followed this crisis.

It became clear that the traditional model of tourism was changing and a new national policy was needed, in line with the United Nations Agenda for Sustainable Development and also to reflect the commitments contained in the Government of Ireland’s 2020 Program. Ralph Victory went on to say that these actions “represent Ireland’s first steps in this area. We realise that we will need to do more”.

While Ireland’s new National Tourism Policy will set the path to ensure that sustainability is at the heart of the sector’s recovery, the policy is open to the support of a capital investment program.

According to an article in TNews, “In 2022, the Irish Government allocated a further €67.6 million to tourism funds, which meant an increase of 31% compared to 2019.”

To this end, the Irish Ambassador to Portugal stated, “This increase in funding is helping vulnerable tourism businesses to survive until international tourism recovers, and also to support the expansion of Tourism Marketing activity.

Learning from each other

As announced in September in Ireland’s 2023 State Budget, a further €15 million has also been secured for the marketing abroad of Ireland as a holiday destination and another €15 million funding amount for measures to support domestic tourism.

In another recent interview with TNews, the Irish ambassador in Portugal noted the potential for learning between Portugal and Ireland, which is a way of benefiting “mutually, specifically in the area of sustainable tourism.”It’s no surprise that Portugal can learn from Ireland in that the country hosts 11 million international visitors, which generated revenue of over €5.9Bn, 100,000 of which came from Portugal.

Turismo de Portugal President Luís Araújo followed the Ambassador’s presentation with his own, opening with several figures to set the tone: “Despite representing only 3% of tourism revenues in Portugal, Ireland is one of the fastest-growing tourist markets in our country this year, compared to 2019…Tourism in Portugal is back in 2022!

From January to July, we are 5% above overnight stays, compared to the same period in 2019. The good news is that when we talk about revenues, we are 12% above 2019 (€10.8Bn). This is an incredible result, because we only expected these numbers next year. It has a lot to do with connectivity, we worked on recovering many of the connections and operations that we had,” he said.

TNews reported that, according to Luís Araújo, one of the most important factors for “this rapid recovery” was the “recognition of the Portugal brand internationally”, giving the example of the UK market. “Why is Portugal so valued by the British? Because it is considered a trendy destination, along with other attributes: it is traditional, friendly, fun, authentic, original, charming, sociable”, said the official, citing a study on the perception of the Portugal brand carried out in 2019.

A sustainable offer

Luís Araújo also cited the main goal of Tourism in Portugal: to reach €27Bn in revenue in 2027. He said, “Right now, we are above forecasts, this year we are going to hit a record revenue. Even the Bank of Portugal predicts better results than those we expect in 2027”.

To achieve the goal of Portugal being perceived as a sustainable destination, Luís remembered the 2021 launch of the “Reactivate Tourism | Construir o Futuro” Plan that came with an endowment of €6Bn until 2027, focused on four pillars: gaining trust, generating business, building a better future, supporting companies.

Only one-third of these funds are active in the field at present. He explained, “It’s not just about using sustainability as a marketing campaign and saying we’re sustainable, it’s about changing the entire value chain, from supply to demand. Yes, we want to attract tourists who are concerned with sustainability, but we are also very concerned about transforming our offer in a sustainable way.”

Luís Araújo explained how Turismo de Portugal decided to change its focus on marketing tourism as a sustainable destination. “The perception of sustainability has to be at the very centre of what we do. We put this in our strategy in 2017 and most of the campaigns and publicity we developed are focused on this sustainability component.”

Portuguese music festivals, wine tourism and Portuguese waves (surfing) are just three of the core pillars to this policy. “We want people to visit every year and, most important, stay longer in our country.”

Portugal – providing the macroeconomic situation does not deteriorate — can achieve this because it has become “an experience economy” over the past 10 years.

The Chairman of Azores airline SATA Air Açores, Luís Rodrigues explained: “All of us have been to places with nice beaches, but we have worked to create an experience tourism economy. You have to come here to appreciate the environment, the safety, the food, the weather, and the people. Holidaymakers go home and tell their friends and suggest they visit Portugal”.

Luís Araújo pointed out that ‘Surfing Portuguese Waves’ is one such product. “We are the most googled destination in Europe and third in the world in terms of surfing, with even more searches than France,” he said, adding that by 2027 they wanted all the surfboards made and sold in Portugal to be made from recyclable products or with no plastic whatsoever.

Cruising to success

Portugal’s popularity as a cruise ship destination has also risen over the past decade. The Regional Government of the Azores alone estimates that the 52,000 passengers (217 stopovers) recently recorded will exceed record numbers from 2017, while Lisbon picked up the award for ‘Europe’s Leading Cruise Destination’ at the World Travel Awards 2022.

Francisco Teixeira, CEO and owner of Melair IR (Royal Caribbean Group) pointed out that Portugal as a brand in terms of tourism and as a hospitality-focused country has a “high rate of customer satisfaction at any port-of-call into the country” such as Lisbon, Porto, Funchal (Madeira) and Ponta Delgada (Azores).

Teixeira added Portugal was “on the radar” in terms of cruises out of Portugal, not because the local market could support it, but because of the broader international market benefiting from good air links to the US and Brazil. ( both large markets)

Raising tourism’s professional popularity

A monumental challenge for Portuguese tourism chiefs is attracting professionals to the tourism sector. Ten percent of Portugal’s working population works in tourism, but during the pandemic it lost 50,000 jobs to other sectors. Poor pay and working conditions have been cited as partly to blame. Turismo de Portugal is keenly aware of the problem.

“It is fundamental if we want to grow”, says Luís Araújo. “First, we have to attract people to our business, and we can only attract them back, or for the first time, if we change the perception of the sector. This has to do with the careers, the labels we give to things, the perceptions of young people understanding that this is a valuable carer for a lifetime”.

Luís Araújo pointed out that professionals can grow much more in their careers in the tourism sector than in (almost) any other. Most important, he said, and in terms of entrepreneurship, there are “huge opportunities for building a business, also more than in almost any other sector”. It had, he said, to do with competitiveness and improving salaries and benefits”.

Second, Portugal has to encourage migration and bring people to work in the sector from outside. The Portuguese Government has recently made agreements with the Portuguese-speaking countries (PALOPS) to recruit people and simplify contract and residency procedures, some through bi-lateral agreements with India and Morocco and the first employment fair in Cape Verde in the autumn of 2022.

But it is one thing attracting people; quite another retaining them. This has to do with supporting diversity, win-win training, adding value and stimulating loyalty. “I regret to say that most companies have loyalty programmes for their customers, but they don’t have them for their internal stakeholders”.

On the question of golf tourism, Luís Araújo stressed that with an enormous golfing community of 218,000 registered golfers all over Ireland, the prospects for a high number of Irish visitors to Portugal on golfing holidays is substantial.

John Bergin, Director of Golfbreaks IE on the issue of talent retention in the industry, said that the industry used to be customer-focused but “we’ve come to realise that without loyal, rewarded and talented staff noting is going to change. We reward our staff better, they work less hours, but produce more”.

But while golf tourism is primarily focused in the Algarve, is there any room for further golf exploration elsewhere in Portugal?

John Bergin thinks there is, but that business won’t expand exponentially. “We do a lot of business in the Lisbon area and the along the Silver Coast in Óbidos and Praia D’el Rey, but although the offering in the Lisbon area is really good, the Irish are really sold on the Algarve because the product is just so good”.

While Irish tourism is growing enormously to Portugal (+200% in 2021 on 2020), in terms of second homes and relocators the Irish market is significant too with 14% of the Martinhal Group’s (a luxury living and family resort group) buyers from Ireland.

And there has also been significant interest from the US market in Portugal. SATA airlines Chairman Luís Rodrigues said the US was the biggest market now for the SATA to the Azores, and this despite direct competition from United Airlines.

This was partly because there had been an increased awareness of Portugal as the ‘Florida of Europe’ in the United States and also because of the political climate and increased divisions in the US. “We are not looking at just tourists, but people who come and stay longer and want to settle”, he said.

But all these incentives and sustainability strategies to make Portugal an attractive destination for different segments of tourists — beach, water, radical sports, nature and medical tourism — fall flat if the Portuguese State fails to actually produce the infrastructure to support the continuing demand the country has as a destination.

Here the constant delays, discussions, endless reports and squabbles over locations for a new Lisbon region international airport that is fit-for-purpose to cope with an estimated 1.8Bn international arrivals via all entry routes by 2030 needed to secure around 80 million overnight stays (+4.2%, double from 2015) is not helping.

The Chairman of Azores airline SATA, Luís Rodrigues called on the government to “hurry up and choose a location” for Lisbon’s new international airport. “I don’t care where they put the new airport just so long as they take a decision, wherever it is”.

 

 

 

 

 


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