The normally gloomy head of the Algarve hoteliers’ association, Elidérico Viegas, said with rare enthusiasm that last year’s hotel occupancy growth was double the expected rate.
Despite getting this 2016 estimate wrong by 100%, the association chief says that the prediction for this year is for a 3.1% increase in tourist occupation rates in the Algarve, a 6.1% increase in hotel turnover and a 3% increase in average hotel room rates.
Hoteliers again can expect an average 65% occupancy rate for the current year, with profits back to healthy 2001 levels.
In 2016 the average occupancy was 64.4%, up 7% on the 2015 level, with turnover increasing by an impressive 13.2%.
In a statement, the association said that British tourist numbers in 2016 increased by 14.7%, domestic tourism fell by 9.5% and Spanish tourism fell by 10.4%.
According to the association, in 2016 the Algarve welcomed about 3.9 million tourists in registered hotels, aparthotels and guest houses.
This number shoots up to 6.8 million tourists when you add in the number of tourists using their own holiday homes and staying with family and friends.
Elidérico Viegas commented that, "It is necessary to continue to focus on strategies for promoting tourism that are smarter and more focused on marketing and sales. Our promotion is very institutional in general."
Viegas pointed out the need for public investment in projects including a multi-stage congress center in the Algarve, a central hospital and a sports clinic for high-level athletes who are in training here during the low season.
Elidérico Viegas wants to see more public private partnerships in the sector, more staff training, more availability of finance and more support for the renovation and modernisation of tourist accommodation.
Assuming that the drop in the VAT rate on meals and drinks helped the sector’s 2016 results, Viegas considered that the tax burden continued to affect profitability, especially payments to local councils for waste and water services, as well as the high price of electricity.
The increase in airport charges, the price rise for oil and aviation fuel, the illegal short-term rental of accommodation to tourists and the difficulty that the authorities have in monitoring these cases are seen as big negatives in an otherwise sunny sector.
Regarding the possible introduction of a ‘per night’ tourist tax by certain of the Algarve’s greedier councils, Elidérico Viegas considers that "it does not make sense to penalise the sector with more taxes but it does make sense to create conditions for it to develop.”
New hotels planned
To cope with demand and take full advantage of the boom in tourism, there are 23 new hotels in the pipeline for the Algarve.
Of these 23 hotel projects, 13 are for new buildings and the remainder are for refurbishments.
The projects are mostly for three stars or less, with only six of the 23 planned units having four or more stars.
Of this last classification, two units are located in Lagos and the remaining four are in Lagoa, Loulé, Portimão and Silves.
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