Is Portugal at a business crossroads?
- Written by Stefan Drew
I’ve just spent a few weeks in Portugal: travelling, networking, meeting clients and creating business plans for the next few years. Since I was last here the recession has bitten harder and there are discernible infrastructure changes with the condition of roads not being what they were and other public services showing the rigours of a slow economy. Portugal is not the only country experiencing this; we have many of the same indicators in the UK.
The Portuguese Business Response
Like the UK, many Portuguese businesses have suffered. Walked down the streets in both countries and you will find many businesses have closed and others are struggling. Portugal is however different in some respects. In historical terms, the expanding economy enjoyed until recently is all post 1974 and has been heavily supported by the EU. Portugal is a country in transition; remnants of its past are still to be seen and many people, but not all, still cling to the past. Horse and carts are still a common sight in rural areas of the Eastern Algarve, and I see prices still quoted in euros and escudo in a significant number of shops.
Future business success is in the hands of businesses based in the country; no one from outside is going to rescue Portugal. Tourism is a potential source of increased revenue as, for foreign travellers; prices are low and the weather desirable. Portugal however has to help itself in finding these travellers and in retaining them. High levels of customer service are essential to obtain repeat business and generate word of mouth. Where it is absent the businesses, and longer term the country, will suffer.
Simple Things
Often it is the simplest things that make a difference. A smile costs nothing and can make a first impression that generates repeat business. Sadly in some businesses it is totally absent, and worse, in some businesses there is a marked show of indifference to the customer (this could also apply to businesses in some other countries). It is not just smiles, another example is free Wifi. It costs very little to supply WiFi to clients and it can attract and retain customers that need to keep in contact with their offices and email, but so many businesses fail to grasp this. It is perhaps not surprising that there is a small café in Sao Bras that gets my regular custom, not just for its excellent cakes but also, for the quality of its free WiFi. Likewise there are similar excellent establishments in other small towns across the Algarve. So why do some hotels think they can charge high prices for WiFi? The two main hotels on the front in Faro charge unless you are resident; the pousada in Estoi only offers 30 mins free Wifi (which I found too complex for me to get online) and all these hotels have lost my business due to it. I often stay in hotels in the region and refuse to stay in those that make my life difficult! A notable exception is the Holiday Inn in Armaçao de Pera, where WiFi is free, doesn’t need complex passwords and has enough bandwidth to do what I need. Clearly the Holiday Inn understands and values its customers.
Public Services
Something else that makes a difference is the ease of using public services. Congratulations must go here to the Correia where the service I have experienced has been incredibly good when I’ve been paying local property taxes (for friends who have moved to New Zealand) and for A22 toll charges.
Now for a “public service” that gets no words of praise from me – the infamous A22 toll charges. I can understand why there is a charge (even though I don’t agree with the rationale), but I fail to understand how it could be so badly implemented. Someone flying into the country and hiring a car is given no indication that charges apply. Drive onto the autoroute and there are small signs that seem to denote radar, or similar, but no other indication that charges apply. Drive a distance along the raod and signboards indicate a charge but there is no indication if this is for the whole length of the journey or part of it …... until you pass signs with other prices! What they actually mean is a mystery to the first time traveller. Complete your journey and leave the autoroute and there is no indication how much you owe or how to pay it. If the aim is to annoy the newly arrived driver this works extremely well. Well done Portugal, this is a really good way to get customers to return!
Of course it could be argued that the car hire companies should be explaining the system to drivers; in my case no mention was made. My car hire company were too busy telling the guy in front of me he should have read the small print and that he shouldn’t blame Portugal as he had rented the car via a UK based company. When the guy to my left was given a similar answer to his comment I knew that this car hire wasn’t going to be easy. One of the problems was the idea you should pay for a full fuel tank, but return the car with an empty tank. As it was explained the cost of fuel included a premium, as the company had to fill the tank and pay the labour for this. When I commented that bringing the car back with a full fuel tank was easier I was told that this was the way all car hire companies do it and .. wait for it .. I should have read the small print! Well a few other car rental companies I spoke to in Faro didn’t expect their hire cars to be returned empty; but I suppose it is because they weren’t as advanced as this newcomer from Spain.
What the car hire company hasn’t grasped is that these practices don’t endear them to customers. I hire a car in Portugal for at least a month each year and they have lost all future bookings from me. In future I will check out the hire company practice by phone before ordering online. This new company might be called Goldcar but they get no Gold Stars from me …. Especially as it took over 40 minutes to return the car at the end of my visit, (Congratualtions to the German couple that refused to hire when they were told they should read the small print).
House Prices
Finally, a word about house prices and real estate agents. Most house prices seem aspirational rather than realistic. Certainly many owners have dropped their price by a few percent but the market is fierce and the few buyers expect a bargain. However many properties would sell for more if real estate people made more effort (apologies to those that do).
What is my evidence for this? Well friends have a property for sale and I went into the agent that is handling it. I was greeted by supreme indifference to the possibility I would buy. Even though I had recently sold a property in the UK and could pay cash for something suitable the member of staff (later I was told she was the owner), pointed to the properties displayed around the room and said there are more properties in the books on the table. With this she left the room to sit at her desk. We weren’t asked what we were interested in … or indeed anything. We found our friends property in the book but, as the owner never bothered to speak to us again, we didn’t ask if we could view the property or if the price was negotiable. Our friends are not happy and are considering their options! I don’t think it will include their current real estate company.
Portugal is a country we love and we will keep doing business here … and look on in interest to see how business fairs in Portugal and the UK.
Stefan Drew
www.StefanDrew.com
