Hospitality in times of pandemic
When the pandemic knocked on our door in March, we were far from imagining what the future would hold.
Much has been said and written about the state of the art of hotel management in Portugal. When the pandemic knocked on our door in March, we were far from imagining what the future would hold.
The AHP – Portuguese Hotels Association was from the beginning monitoring the impact of COVID-19 in the Hotel Industry. Back in March, we made a first survey where we estimated a loss of 7.3 million overnight stays and 800 million euros in four months. We now know more.
At the time, most hoteliers were quite confident about the future, it was thought that it would be 3 or 4 months and then we would return to normal activity. Time went by and the days went by showing that the pace of cancellations, the measures imposed, the evolution of the pandemic led to the management of the units and the options becoming weekly and, in many cases, daily.
In the second survey, we concluded that more than half of the hotels in Portugal were closed in June, and during the summer months (July, August, and September) about 25% to 30% of the hotels were closed.
Despite the high rate of closure in the summer, there was some hope and this period brought a breath of fresh air to some destinations, especially beach destinations and those that were, until now, less sought after, such as Alentejo and Centro. People clearly looked after rural destinations instead of city destinations.
The hotel industry has gone through several crises, but none like this one. We can say that we have experienced the biggest crisis in the sector ever, so if we have always known how to reinvent ourselves, now is the time to show that.
For some time now, AHP has been advocating that hotel rooms could be used for other purposes than just touristic accommodation. To allow a mixed use, such as: maintaining hotel services for both short and long tourist accommodation; accommodation for students during the winter and for tourism during the summer; office areas and accommodation areas; part hostel and part hotel. The goal is to make use of all the available areas of a hotel, and its services, thus reinventing areas. Today this approach makes even more sense, given the current lack of tourist demand.
And how are we doing now?
There is no point in sugar coating: the outlook for at least the first quarter of 2021 is poor. Evidently, the country is not reacting at the same speed.
Cities like Lisbon and Porto were suffering an even greater impact than the rest of the country, with their destination, almost, 100% linked to international broadcasting markets and the business and events segments. The same happens to the Algarve, especially due to the lack of golf events, fundamental in the middle and low seasons.
Meanwhile, the whole country is waiting for airlines to resume their activities.
The latest AHP Survey (November 2020) already showed that in the coming months, 50% of the hotel units in Portugal are closed and around 70% of the hotel beds will not be available.
Now, with the worsening of the pandemic situation and the closure enacted by all countries, the forecasts are even bleaker.
And the question arises: when will the hotels reopen? Under what conditions?
AHP estimates an overwhelming loss for both overnight stays and revenue: in one year alone, 70% loss of the overnight stays (40 million fewer nights) and 80% loss of revenue (3.6 billion fewer euros). Naturally, we are only referring to the hotel business!
Europe needs Tourism, our relationship of mutual dependence is the result of globalisation. The world without tourism is much poorer. At all levels. Much more so than at the economic level. That is why it is essential that Tourism be thought of as an indispensable tool to rebuild our future.