According to a report by Dinheiro Vivo, the fall in the demand for winter stays will lead to many hotels in the Algarve closing to try and save money through the low season.
The low season for holiday makers in the Algarve who are looking for traditional “bucket and spade” holidays is normally the high season for golfers who come to the region to make the most of the mild weather and to play on some of the best courses in Europe.
However, the rise in taxes paid by golf courses to 23% has seen prices rise on many courses and the number of people heading out to the greens and fairways falling as a result.
Elidérico Viegas, the head of the association of Algarve hotels and tourism (AHETA), told Dinherio Vivo: “This winter will be painful in the Algarve and will be more or less the same as last year except there could be more hotels and businesses closing in the region.
“It is difficult to put a figure on the number of hotels that will be closed over the winter as many people do not communicate this but there will also be some businesses that will be working through the low season.”
He added: “there will also be many apartments that are not rented out through the winter months because there is simply no profitability for owners and all of the closing businesses will result in rising levels of unemployment in the Algarve.”
He put the problem of closing businesses in the winter down not only to a fall in the number of visitors to the Algarve during the winter months but also down to the increase of IVA to 23% within the industry.
“It is no longer enough for us to try and shorten the winter season, or to occupy more than one hundred thousand beds, the problem lies in the increase in IVA to 23% and the coming months will be of great concern to every Algarve business in the region.”
Joel Pais from the Grupo Solverde which has several hotel units including the Hotel Algarve in Praia da Rocha said that he believes that hotels with four and five stars will not suffer as much this winter with the seasonality especially as they attract an international type of client.
However for hotels and apartments that rely on Portuguese and Spanish tourists the winter could be very tough as the numbers of these visitors to the Algarve has taken a nose dive with many businesses now relying heavily on foreign visitors to make up the shortfall in revenue.
The president of the Algarve tourism board António Pina reiterated the concerns of others about the upcoming winter season. he said: “I expect a difficult winter and that with the golf tourism industry finding it difficult to grow with the 23% IVA I fear that many small and family businesses may be forced to close this winter in the Algarve.”