Back in 2017, then-U.K. Foreign Secretary Boris Johnson emphasised that his country would never turn its back on Portugal, one of its closest allies since 1386. Some of his fellow brits are doing otherwise.
While the pound has strengthened against the euro in the last three months, it’s still weaker than before the Brexit referendum in 2016. This is prompting British travellers to search for cheaper destinations outside the euro region, according to Jose Theotonio, chief executive officer of the Pestana Hotel Group. In 2018, the number of overnight stays from British tourists fell 5.4% from a year earlier, according to data from the National Statistics Institute.
“It has to do with a range of factors, including Brexit and a weaker pound versus the euro,” Mr. Theotonio claims. The collapse of tour operators such as Thomas Cook earlier this year also has also had an impact on the flow of British holidaymakers to hotels in the Algarve, he said. For Pestana, Portugal’s biggest hotel operator, the British market fell 7% in the 2017-2018 season and about 3% in 2018-2019, he said.
Sun, sand and golf have made Portugal a favourite destination for British nationals, who make up for approximately a fifth of all overnight stays by foreigners. As Britain prepares to vote in an election that will dictate its relationship with the rest of Europe, Mr. Theotonio is hopeful that after the vote there may be more British tourists returning to the region.
“While we’ve gotten used to living with the delays and uncertainties surrounding Brexit, the outcome of the vote should help overcome some of the recent hiccups in our relationship with the U.K.,” the CEO revealed.
The number of guests staying at hotels and other accommodation in Portugal increased 6.9% in the first nine months of the year to a record 21.1 million, with overnight stays by British holidaymakers increasing just 0.8%, according to the statistics institute. The country has managed to attract a far more quickly growing number of visitors from North America, France, Spain and Brazil, said Theotonio.
That doesn’t mean Portugal can afford to live with a lower number of British tourists though. Pestana has more than 90 hotels around the world, including one in London. The company expects revenue will reach around 450 million euros this year, about the same as in 2018, with British guests accounting for about a fifth of sales.
“It’s easier to maintain our existing markets than to look for new markets for tourists,” concluded Mr. Theotonio. “Our greatest challenge right now is to continue to have a privileged relationship with the British market.”
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