Portugal could lose €60B, up to 600K jobs from slowdown in tourism
According to a report carried out by consultancy McKinsey, in global terms, it is estimated that, "between 2020 and 2023, Portugal could lose €60bn of GDP."
Portugal may have accumulated losses €60 billion and up to 600,000 jobs may have been eliminated in tourism by the time the sector recovers from the effects of the pandemic, a McKinsey study revealed on Monday.
According to a report on tourism in Portugal carried out by consultancy McKinsey, in global terms, it is estimated that, “between 2020 and 2023, Portugal could lose €60bn of GDP (equivalent to 26% of GDP levels in 2019), considering both direct and indirect and induced effects.”
“Additionally, at the peak of the crisis, the sector could lose up to 600,000 jobs, some of which may not be recovered in the future,” the report also states.
The study highlights the importance of tourism to the Portuguese economy, as it accounts for 18.6 per cent of total jobs in the country, if direct, indirect and induced effects are taken into account, and in places such as the Algarve, Madeira and the Azores, the sector represents more than 20 per cent of GDP and local jobs.
The consultancy also highlights the impact that the crisis in tourism has on other sectors of the economy, “which depend on this traffic to stay afloat, such as shopping centres, restaurants and retailers.”
The report predicts that domestic tourism in Portugal may not return to pre-pandemic levels until 2023, and the same will be true for international tourism, which is about four times larger than domestic tourism, by 2024.
“While it is impossible to predict when the sector might show signs of recovery, there are many measures that the sector’s ‘players’ could be developing in the immediate term,” says the consultancy, indicating three priorities “for a faster and more sustainable recovery”: increasing the competitiveness of companies through digitalisation, collaborative models within the sector and “creating a new paradigm” for the tourism of the future.
Mckinsey’s analysis suggests that event tourism (meetings, incentives, conferences and exhibitions), group travel, cruises, individual travel and urban tourism will be the most affected by the pandemic and will take longer to recover, while, on the other hand, second-home tourism, ecotourism and religious, sports and cultural tourism will be less affected and should recover more quickly.
Finally, the report points out five key factors that will determine how quickly the national tourism sector can recover: the attractiveness of the main destinations, the availability of air capacity, the capacity and quality of healthcare, the weight of business travel and the importance of sustainability.