New life in the luxury segment propels the recovery of the hospitality industry in Portugal


Improving performance trends, along with a slate of luxury hotel openings in the country, have given tourism officials in Portugal confidence that travel and hospitality revenues will rebound to expected levels. before the pandemic by 2023.

In a sign that demand for hotels is growing, new luxury hotels that had been delayed due to the pandemic are finally starting to welcome guests this year.

Discovery Hotel Management, which has a portfolio of 18 hotels spread across Portugal, opened two new properties in 2021: Évora Farm Hotel & Spa in the Alentejo region and Patio Suite Hotel in the Algarve.

The company is also in the final stages of defining a new hotel concept that it plans to launch in the Colares region of Portugal.

One of Lisbon’s most anticipated hotel openings in 2021 was The Ivens, a luxury property themed around famous Portuguese explorers.

The upscale Lumen Hotel, which features a nighttime video-mapping light show, also debuted in summer 2021.

“We opened our doors on July 21, right in the middle of the pandemic, which has been a very troubled and difficult time,” said Sérgio Bernardo, General Manager of Hotel Lumen. “Nevertheless, expectations were far exceeded, once the hotel’s occupancy rate exceeded even the most optimistic pre-opening forecasts.”

The first W hotel in Portugal will open in the Algarve this spring, along with the first luxury hotel in Ericeira, a fishing town 30 miles northeast of Lisbon that is best known for its surf scene.

The CEO of Discovery Hotel Management, Luís Mexia Alves, said he was optimistic about the hotel sector in Portugal, mainly in the luxury segment.

“We are just as realistic and sometimes still remain uncertain. However, the last two years have pushed us to adapt and become flexible compared to the way we operated before the pandemic,” he said.

Data from STR, CoStar’s hotel analytics company, and Turismo de Portugal show positive trends in hotel performance across Portugal. Tourism in Portugal has suffered significantly during the pandemic from travel restrictions in the UK, its biggest food market.

In the first nine months of 2021, tourist accommodation revenues in Portugal exceeded the total for the year 2020, although they were still half the value of the same period in 2019. The overnight stays in October and of November exceeded the figures for June and July.

Since August, hotel revenue has topped 2019 levels in Madeira, which comprises four islands off the northwest coast of Africa and is one of Portugal’s two autonomous regions.

Room sales increased 7% in August, 4.2% in September and 11.9% in October.

Chitra Stern, owner of Martinhal Hotels & Resorts, said the company was happy to reach 60% of room revenue from 2019 in 2021. Martinhal operates properties in the Algarve, Cascais, Lisbon and Sagres.

She said the company’s hotels also had their best ever October in 2021 with over 90% occupancy, and hit the same high occupancy levels in the days leading up to New Year’s Eve.

“It’s promising for the year ahead,” Stern said.

STR research showed 2020 occupancy up 46.4% from 2020 and average daily rate up 19.5%, pushing the latter above 2019 levels. increased in 2021 by 74.9% compared to 2020 figures.

Online searches for travel to Portugal also increased, which is another indicator of the positive direction of the recovery. Turismo de Portugal officials said consumers were again optimistic about booking travel, and tourism and hospitality performance should reach pre-pandemic levels by 2023.

Much of the recovery of the tourism industry in Portugal has been made possible by government support at financial and operational levels.

Programs include the government-funded Revive program, launched in 2016 to restore vacant public properties of architectural, historical or cultural value through private investment, including hotels and restaurants. To date, it has supported nearly 70,000 companies.

The Nest program, also known as the Tourism Innovation Center, supports the development of new business ideas in the digital economy, while the BEST program is a free online training academy promoting the development of management skills in tourism , which has already involved 170,000 people. The Call Fit program invests in tourism projects in the pre-development phase.

The programs are part of the Portuguese government’s efforts to exceed 27 billion euros ($31 billion) in annual tourism revenue by 2027, while accelerating sustainability plans.

“The tourism board has continued to engage in public relations and marketing activities throughout the pandemic, which has been crucial in keeping Portugal in people’s minds,” Stern said of Martinhal Hotels & Resorts. “We couldn’t have done it alone. Government efforts on various fronts have helped us get more business than we otherwise would. »

Many hoteliers have taken advantage of the pandemic-forced pause to focus on digitalization – investing in technology and growing online platforms.

Martinhal has improved its check-in procedures and invested in a central reservations system that facilitates customer feedback and enables its sales teams to tailor offers to different market segments.

At Discovery Hotel Management, the focus has been on upgrading meeting technology. DHM created a “What’s Up Concierge” program to expedite response to guest requests, installed digital signage in all of its hotels, and made food and beverage menus accessible on mobile devices via QR codes.

“We have acquired [IT equipment] to enable higher quality hybrid meetings, in particular by increasing our Internet network. We also now allow electronic check-in to improve and streamline the check-in process, primarily in the [meetings, incentive travel, conferences and exhibitions] segment,” said Mexia Alves.

It said its city hotels and major resorts were down 30% on average from 2019 in terms of occupancy, due to a reduction in meetings and events.

But the investment has started to pay off for the company. Within its upscale and luxury properties, DHM topped 2019 performance with 60% occupancy and a 10% increase in average daily rate, Mexia Alves said.

The normalization of remote working and the attractiveness of Portugal as a destination from which to do so has led to growing demand for longer hotel stays and better Wi-Fi, and not just for conference guests. .

Martinhal has set up long-stay offers to accommodate these customers and now offers specific Wi-Fi services for families who need to both work remotely and send their children to school online.

“We’ve even dealt with families from other time zones who needed access to conference rooms or the main lobby so they could work quietly while the rest of their family slept,” Stern said.

Mark McSorley, managing director of Quinta do Lago, a resort offering both hotel rooms and private residences located in the popular Algarve region, said demand had increased for rental homes with offices in residence.

“We’ve noticed a huge shift in residents spending the majority of their time in their second home,” he said.

Mexia Alves said many reservations at DHM hotels turned into extended stays.

“We are prepared for this with dedicated spaces in each of our room categories where guests can work comfortably and relaxation areas where guests are welcome to work,” he said.

This trend towards remote working has been very noticeable in Madeira, where the government has partnered with Startup Madeira to launch a 2021 pilot project aimed at attracting digital nomads.

Nuno Vale, executive director of the Madeira Promotion Office, said the rapid recovery of tourism on the island, particularly in late summer 2021, has been a double-edged sword.

“This has led to a lack of human resources in the hospitality sector,” he said, adding that the diversification of tourism target groups is having a positive impact on the sector.

He added that his office was supporting hoteliers by waiving membership fees and increasing payment flexibility.

“Madeira tourism is becoming more resilient, diverse and less vulnerable to economic prospects,” he said. “We hope to reach the global figures of 2019 already by the end of 2022.”

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