Tourism – the revival of a key sector of the Portuguese economy

Over the decade, tourism has established itself as one of the most successful sectors of the Portuguese economy. The sector has been hard hit by the Covid-19 pandemic but is slowly resuming operations.

Tourism is essential to the Portuguese economy

It is currently impossible to separate tourism from the Portuguese economy. However, this construction was gradual. In 2008, the world was hit by a great crisis: the crisis substandard, which also greatly influenced Portugal. Nearly two years later, the aftermath of 2008 triggered a new economic crisis affecting mainly southern European countries: the 2010 sovereign debt crisis. Greece, Cyprus, Ireland, Spain, Italy and Portugal were the hardest hit. The economic downturn – unemployment rate over 11% – and the austerity policy imposed on Troikaone until 2011, which marked the Portuguese in many ways, was a very difficult time for the country. It was in these difficult conditions that tourism gradually established itself and in fact became an important engine of growth for the Portuguese economy.

In 2010, the tourism sector accounted for less than 10% of Portugal’s gross domestic product (GDP). 10 years later, in 2020, before the Covid-19 pandemic, it accounted for over 17.8% of Portugal’s GDP.

Tourism Fair 2022 inaugurated by President Marcelo Rebelo de Souza

From March 16 to March 20, 2022, Lisbon hosted a face-to-face tourism fair, which was not held for two years due to the Covid-19 pandemic. The ambition of the Bolsa de Turismo de Lisboa (Lisbon Tourism Stock Exchange) is clear: we must restart tourism activities in Portugal. In confirmation of the importance of the industry, the President of the Republic, Marcelo Rebelo de Sousa, opened the fair, accompanied by the Minister of Economy, Pedro Sisa Vieira, on that day. The latter is optimistic about the revival of tourism activity, saying that the flights and accommodation sectors are seeing a sharp increase in demand.
The 2022 show attracted more exhibitors than the 2019 show, which was a great success with over 70,000 visitors. This is the expression of “the viability of the industry”, according to the minister.

Recovery from the negative effects of the Covid-19 pandemic

This dynamic is part of the recovery from the Covid-19 pandemic. Medical restrictions were the first reason for the fall in tourist activity in Portugal. How to fill all hotel rooms when travelers can no longer enter the country? Whom to visit Lisbon when the borders were almost closed to visitors? On July 2, 2021, the government announced a 23:00 to 05:00 curfew in the country’s major municipalities. A few weeks later, the medical pass became the new rule in the fight against the pandemic. So, in 2021, tourism has again been hit hard by all these negative effects of the Covid-19 pandemic.

However, the trend is gradually changing. According to the Bank of Portugal (BoP), tourism revenues grew by 101% between January 2021 and January 2022. During the year they grew from 356.8 million euros to 718.5 million euros. It is clear that the real dynamics is found. However, it should be borne in mind that this amount remains below the pre-pandemic situation. Tourism receipts in January 2020 were 27.5% higher than in January 2022. Indeed, two years ago these revenues amounted to 991.02 million euros.

The easing of medical restrictions is in the direction of this improvement, allowing tourism to resume its activity, positively affecting the country’s economy.

New requirements from travelers

What we are seeing with the resumption of tourism activity is a change in the expectations of travelers: they have new requirements. If earlier the client was looking for a good bed or a renovated hotel, the field of criteria for choosing an establishment has expanded. In a world that is changing and facing new challenges, such as the climate crisis, consumers are also changing in what tempts them to make choices. From now on, workers in the tourism sector must adapt to the requirement of respect for the environment and specific proposals for the protection of health.

Also, in a pandemic, customers value contact with staff more than before. Silvia Diaz, marketing director for the Savoy Signature hotel chain, told the travel industry magazine: “More than efficiency, [le client] began to value empathy.

So tourism is reviving, but it has to face these new traveler demands and adapt to them from different perspectives.

Tourism in Portugal, which survived the war in Ukraine

With the start of the war in Ukraine on February 24, 2022, the European tourism sector is worried. After all, the war affects him directly, and in particular the countries of Eastern Europe that are close to the conflict. But when the eye turns further to the west, the attraction of tourists increases.

The popularity ratings of Spain and Greece have risen sharply compared to the pre-pandemic period (+17% and +21% respectively, according to Travelsat, a company that measures the satisfaction of tourists with their trips). Portugal shouldn’t be ashamed either: According to Travelsat, the attractiveness the country evokes is 3% higher than it was before the health crisis. This growth is largely due to the interest of the British in the country. A Mabrian Technologies study published by travel magazine Publituris shows that searches for flights from the UK to Portugal have increased by 13.2% since the start of the Russian invasion, making Portugal the most popular destination for Britons, ahead of Spain and Turkey.

Thus, the Portuguese tourism sector can be confident in the near future, although this unprecedented situation remains tragic.

one The European Union, the European Central Bank, the International Monetary Fund and the then-ruling PSD-CDS (Social Democratic Party in alliance with the Christian Democratic and People’s Party) agreed on a loan to Portugal of 78 d. billion euros thanks to a tough austerity policy.

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