Hotel industry hopeful of €14-15B revenue in 2022, still below 2019

  • Lusa
  • 15 March 2022

The Hotel Industry Association of Portugal (AHP) expects revenues between €14 and €15 billion this year, figures higher than 2021 but sill below 2019.

The president of the Hotel Industry Association of Portugal (AHP) says that, despite the difficulty created by the economic situation, recovery “in earnest” can happen in the summer, expecting revenues between €14 and €15 billion this year, still below 2019.

“It is a fact that the recovery, the upturn, let’s say, started last year, in the summer. First in Madeira, then in the Algarve, then in the cities, with Lisbon and Porto, with the interior always with more affluence and maintaining a good demand”, however, when it was starting to recover came “the fifth wave to make the situation very difficult”, recalls Raul Martins in an interview with Lusa.

This year “December, January and February were bad, very bad because of the pandemic. March is already recovering well and then April will be reasonable and we’ll have a serious recovery, let’s say, from the summer onwards. I think the summer will be in full recovery and then in the second half [of the year] we will continue that recovery,” he said.

With this, AHP says that 2022 will be a year that “is not all of a greater recovery” because there was “a very low start to these first three months, which will influence what will be the second half or the nine months left” to end the year, but that they think will be “very good by virtue of the demand that is intended”.

“Now we have this constraint resulting from the increase in fuel prices in particular, which puts some question marks or some retraction in the situation. And that is a concern”, he says. But not the only one.

“The situation of increased demand with a shortage of labour,” although it is recovering, “aggravated now by the situation of rising energy costs and, consequently, of essential goods, namely food, is creating a new difficulty in the recovery,” he explained.

At the end, questioned about the expected balance in terms of hotel revenues, Raul Martins said that “this year will be €14, €15 billion.”

“The expectation before the war in Ukraine was that we could reach 80% of 2019. Today we won’t be able to say that anymore, but we will walk between 70 and 80% of what 2019 was,” he explains.

In 2019, AHP counted total hotel revenues of €18.3 billion.

In 2020, a year with a strong impact of the Covid-19 pandemic, revenues reached €7.8 billion, down 58% compared to 2019.

In 2021, revenues reached €9.94 billion, 46% less than in 2019, but 29% more than in 2020.

On the expected increase in demand at a time when Omicron – a more contagious variant – still dominates, Raul Martins says that “from the moment you could travel without the need to do the PCR [test], the situation has improved dramatically and that was what made people not travel”.

“In the end it was the PCR situation that had to be done to come here, to go there, the cost of the two PCR tests added together was sometimes more expensive than the air travel itself – that put off the decision to come,” he explained.

Regarding the expectations of the new government, Raul Martins said he hoped that “with an absolute majority, the PS will govern without any constraints, and will be able to focus decisively on the economy, because it is the economy that will generate better living conditions for the Portuguese. If we improve in the economy, the GDP [Gross Domestic Product] grows and it will be better for everyone.”

“The government will look decisively at tourism as an activity that balances the economy and that has profitable labour to be used,” he added.