Portugal hotels face high demand after UK changes quarantine

Portugal hotels face high demand after UK changes quarantine

Beachgoers sunbathe and swim at a beach in Portimao, Algarve region, Portugal.

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LONDON — The tables have turned for the Portuguese hotel industry on one announcement. 

The U.K. government said on Friday that from May 17 travelers from England will not need to quarantine when returning from Portugal. They will have to take a Covid PCR test within two days of their arrival in the U.K.— but this is a much simpler process compared to the rules applied to other destinations. 

Though rules might change depending on how the epidemiological situation develops, U.K. tourists were quick to jump on the opportunity to book a vacation abroad.

It’s been “absolute madness in terms of (booking) requests,” Katya Bauval, executive director of sales at the Vila Vita Parc hotel in the Algarve, south of Portugal, told CNBC over the phone.

She said that “bookings literally tripled in demand since Friday.”

Portugal’s largest hotel chain, Pestana, has experienced a similar rush for reservations. “There’s been a very substantial increase in bookings,” Jose Theotonio, CEO of Pestana Hotel Group, told CNBC on Wednesday.

Pestana said demand jumped 250% since Friday and rose by 475% in external booking operators. Consumers are mainly opting for places in the Algarve and Porto Santo, a small island in the archipelago of Madeira.

The preference of consumers is “clearly sunny destinations,” Theotonio said.

This signal from the British government has motivated other bookings.

Jose Theotonio

CEO of Pestana Hotel Group

Portugal also appeared to benefit from the inclusion of relatively few other popular European vacation destinations on the U.K.’s least restricted “green list.”

Spain, Italy and Greece — just to name some of the other competing destinations in the south of Europe — have not yet been added to the U.K.’s top traffic light list. Instead, these countries have been left on the U.K.’s “amber” list, meaning that if U.K. tourists travel to Spain, Italy or Greece they will then be required to self-isolate for 10 days on returning home.

“It was to Portugal’s advantage that Greece, Spain aren’t on the list,” Bauval said.

‘Motivated other bookings’

Portugal has become a hotspot for international visitors in recent years. In 2019, the country welcomed 24.6 million visitors — a 7.9% growth from the previous year, according to the country’s national statistics office.

The U.K. represented the biggest market for tourist stays in Portugal, accounting for 18.8% of the total number of nights in the country. This was followed by Germany, which was 12.3% of the total stays, and Spain, which accounted for 11%.

A woman sunbathes at a beach in Sagres, Algarve region, Portugal on July 29, 2020. Portuguese President Marcelo Rebelo de Sousa has promised to visit the Algarve every week this summer to help the regions struggling tourism sector overcome the effects of the Covid-19 pandemic and the UK governments decision to include mainland Portugal in its travel blacklist. (Photo by Pedro Fiúza/NurPhoto via Getty Images)

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But the country’s tourism industry came to a complete halt in the wake of the coronavirus. The summer season experienced a later start in 2020 and continued at a much slower pace compared to previous years. Portugal was also forced to introduce a second lockdown at the start of 2021 due to a sharp increase in the number of Covid infections, but the strict measures have now been eased.

“This signal from the British government has motivated other bookings,” Theotonio also said, noting that the recent surge in demand has also come from tourists in Germany, Spain and the domestic market too.

U.S. tourists will take longer to come back

There’s also a common feature in recent hotel bookings: its immediacy. Visitors have mainly been booking a stay for May and June.

This type of booking is “even more important,” according to Theotonio as it reduces the likelihood that people will need to cancel their plans.

Portugal has also attracted many non-EU visitors in recent years. In 2019, there was a jump of 21.3% in the number of stays from American tourists; a 16.8% increase from China; and a rise of 14.9% from Brazil.

But this demand will take longer to come back.

“We feel it will take some time,” Bauval said, explaining how Vila Vita Parc had to shift its focus in the wake of the coronavirus pandemic to attract more Europeans. 

This is despite the announcement from European Commission President Ursula von der Leyen that vaccinated Americans will be able to visit Europe this summer.

“We don’t have illusions,” Theotonio said, expecting only a “gradual” return to pre-pandemic activity levels.

Tourists pull luggage as they walk towards a hotel at Villamoura beach in Villamoura, Algarve region, Portugal.

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