"Without access to credit and with seasonality, tourism has to reduce costs" according to the view of Elidérico Viegas, the president of the Association of Algarve Tourism Hotels (AHETA).
Viegas says that the tax burden on his members is too high and it affects the sector's competitiveness:
"Without access to credit and with seasonality, tourism is forced to reduce costs"
There has been a fall in employment numbers in the sector and Viegas says the statistics produced by the National Institute of Statistics (INE) showing record tourism levels are suspect as the INE changed its methodology and ‘local accommodation’ figures have been added in for the first time.
Regardless, the number of tourists in the Algarve’s mainstream hotels this year were better than last year but Viegas points out that, "We have a tax burden far above the average of our competitors," with VAT at 23%.
"Taxation is one of the factors that contribute most to the low competitiveness of the Algarve tourism offer and the low profitability of companies," according to the trademark shroud of gloom of Viegas' assessments.
"Then there are energy costs and, above all, municipal taxes which are very high and hit companies badly. This is true especially in the Algarve which is faced with seasonality.
"This creates a situation of increasing difficulty, coupled with the fact that banks fail in their mission to support the economy.
"With poor access to credit and a seasonal activity, the industry is forced to reduce costs and in a service industry the cost of labor is the major one. "
The Viegas solution, hardly rocket science, is to sell more bed spaces in the months before and after the summer high season. "Only then can we increase employment."
The labour supply is another problem because it is needed in large quantities in the summer and not in the winter. "This used to be provided by immigrant workers but many of these now have returned to their home countries or have gone to another country where they can work year-round."
Viegas has a long history of moaning and his current attitude, after possibly the best season ever recorded for Algarve tourism, is standard.
Labour always has been an issue in any seasonal business; The AHETA members know this, as do they know that Algarve tourism is by its nature highly seasonal - yet they still run hotels and make a profit, some of them make very good profits indeed.
Viegas also fails to mention the concession by the Socialist Party administration which will redcue VAT from 23% to 12% on January 1st, 2016, a measure which is hard won and long overdue. This will have a marked affect on the Algarve's hotel sector's profitability and flexibilty to discount rates in the off season.
The Viegas side-swipe at the Alojamento Local figures being added to those of his member hotels is interesting as Viegas has been lobbying hard for the local lettings sector to be closed down or regulated out of existence.
This has backfired dramatically as the new AL regulations are being widely ignored and, in Viegas' view, the sector continues to draw money away from the Algarve's hotels.
