Portugal's Travel Agency sector is predicted to invoice at least 7% less this year as slackening demand and strong pressure on prices take their toll.
"The adverse economic situation in recent years has caused sharp falls in revenue for tour operators and travel agencies in Portugal" according to a D&B report released today.
In the case of retail travel agencies the drop in turnover will be 7% this year, down to an income of €1,400 million, while the wholesale travel agency sector will drop 8% to €280 million.
This is another poor performance as last year the travel agency sector saw a drop in sales income of 10%, while the turnover of the wholesale travel sector fell 12%.
According to the report, the basis for this decrease is "rising unemployment and a contraction in household spending" which has prompted a "substantial reduction in travel budgets." No surprises there.
"There has been a growing demand for lower-cost destinations and destinations closer to home, as well as for shorter stays," notes D&B.
The industry also "faces increasing competition from the high percentage of private and business customers directly purchasing tickets, booking hotels and pre-booking other tourist services through the websites of companies that supply these services."
Many businesses have ceased trading and there has been a "significant geographic concentration of activity" with the districts of Lisbon and Oporto home to about half of the remaining retail businesses, followed by Faro with 9% of the country’s total.
