Portugal hotels face high demand after UK changes quarantine

Beach goers sunbathe and swim on a beach in Portimao, Algarve Region, Portugal.

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LONDON – Following an announcement, the tables have turned for the Portuguese hotel industry.

The UK government said on Friday that travelers from England will no longer need quarantine on their return from Portugal from May 17. You must have a Covid PCR test within two days of your arrival in the UK. However, this is a much simpler process than the rules that apply to other destinations.

Although the rules could change depending on the evolution of the epidemiological situation, British tourists quickly took the opportunity to book a vacation abroad.

It was “absolute madness in terms of (booking) inquiries,” said Katya Bauval, sales manager at the Vila Vita Parc hotel in the Algarve in southern Portugal, over the phone to CNBC.

She said “the demand for bookings has literally tripled since Friday”.

Portugal’s largest hotel chain, Pestana, has seen a similar rush for reservations. “Bookings have increased significantly,” Jose Theotonio, CEO of Pestana Hotel Group, told CNBC on Wednesday.

Pestana said demand had increased 250% since Friday and outside booking companies had increased 475%. Consumers mainly choose locations in the Algarve and Porto Santo, a small island in the Madeira archipelago.

Consumer preference is “clearly sunny destinations,” said Theotonio.

This signal from the UK government has motivated other bookings.

Jose Theotonio

CEO of the Pestana Hotel Group

Portugal also appeared to benefit from the inclusion of relatively fewer other popular European holiday destinations on the UK’s least restricted “green list”.

Spain, Italy and Greece – to name just a few of the other competing destinations in southern Europe – have not yet been added to the UK’s top traffic light list. Instead, these countries have been left on the UK’s “amber” list. If British tourists travel to Spain, Italy or Greece, they must self-isolate for 10 days upon their return.

“It was an advantage for Portugal that Greece and Spain are not on the list,” said Bauval.

“Motivated other bookings”

Portugal has become a hotspot for international visitors in recent years. In 2019, the country welcomed 24.6 million visitors – a 7.9% year-over-year increase, according to the country’s national statistics bureau.

The UK was the largest market for tourist stays in Portugal, accounting for 18.8% of the total number of overnight stays in the country. Germany followed with 12.3% of the total stays and Spain with 11%.

A woman sunbathes on a beach in Sagres, Algarve region, Portugal on July 29, 2020. Portuguese President Marcelo Rebelo de Sousa has promised to visit the Algarve every week this summer to help the regions struggling with the tourism sector to overcome the effects of the Covid-19 pandemic and the British government decide to do so to add mainland Portugal to their travel blacklist. (Photo by Pedro Fiúza / NurPhoto via Getty Images)

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But the country’s tourism industry stalled after the coronavirus. The summer season started later in 2020 and was much slower compared to previous years. Portugal was also forced to introduce a second lockdown at the beginning of 2021 as the number of Covid infections had increased sharply. However, the strict measures have now been relaxed.

“This signal from the UK government has motivated other bookings,” Theotonio also said, noting that the recent surge in demand has also come from tourists in Germany, Spain and the domestic market.

US tourists will take longer to get back

There is also a common characteristic in recent hotel bookings: its immediacy. Visitors have mainly booked stays for May and June.

This type of booking is “even more important”, Theotonio says, as it reduces the likelihood that people will have to cancel their plans.

Portugal has also attracted many non-EU visitors in recent years. In 2019, the number of American tourist stays increased by 21.3%. an increase of 16.8% over China; and a 14.9% increase from Brazil.

However, it will take longer for this request to come back.

“We believe it will take some time,” said Bauval, explaining how Vila Vita Parc had to shift its focus to attract more Europeans after the coronavirus pandemic.

This despite the announcement by the President of the European Commission, Ursula von der Leyen, that vaccinated Americans will be able to visit Europe this summer.

“We have no illusions,” Theotonio said, expecting only a “gradual” return to pre-pandemic activities.

Tourists pull their luggage en route to a hotel on Villamoura Beach in Villamoura, Algarve, Portugal.

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