Portuguese Hotel CEO Blames Weak Pound for Drop in U.K. Visitors
Portuguese Hotel CEO Blames Weak Pound for Drop in U.K. Visitors
(Bloomberg) --
In 2017, then-U.K. Foreign Secretary Boris Johnson said his country would never turn its back on Portugal, one of its oldest allies. Some of his countrymen are doing otherwise.
While the pound has strengthened against the euro in the last three months, it’s still weaker than before the 2016 Brexit referendum. That’s prompting some British travelers to search for cheaper destinations outside the euro region, according to Jose Theotonio, chief executive officer of the Pestana Hotel Group. In 2018, the number of overnight stays by British tourists fell 5.4% from a year earlier, according to Portugal’s National Statistics Institute.
“It has to do with a range of factors, including Brexit and a weaker pound versus the euro,” Theotonio said in a telephone interview. The collapse of tour operators like Thomas Cook earlier this year also had an impact on the flow of British holidaymakers to resorts in the Algarve in southern Portugal and on the island of Madeira, Theotonio said. For Pestana, Portugal’s biggest hotel operator, the British market fell 7% in the 2017-2018 season and about 3% in 2018-2019, he said.
Sun, sand and golf have made Portugal a favorite destination for British nationals, who account for about a fifth of all overnight stays by foreigners. As Britain prepares to vote in an election that will decide its relationship with the rest of Europe, Theotonio is hoping that after the ballot there may be more British tourists coming to the southern European country again.
“While we’ve gotten used to living with the delays and uncertainties surrounding Brexit, the outcome of the vote should help overcome some of the recent hiccups in our relationship with the U.K.,” the CEO said.
The number of guests staying at hotels and other accommodation in Portugal increased 6.9% in the first nine months of the year to a record 21.1 million, with overnight stays by British holidaymakers increasing just 0.8%, according to the statistics institute. The country has managed to attract a growing number of visitors from North America, France, Spain and Brazil, said Theotonio.
That doesn’t mean Portugal can afford to live with a lower number of British tourists, Theotonio said. Pestana has more than 90 hotels around the world, including one in London. The company expects revenue will reach around 450 million euros ($496 million) this year, about the same as in 2018, with British guests accounting for about a fifth of sales.
“It’s easier to maintain our existing markets than to look for new markets for tourists,” said Theotonio. “Our greatest challenge right now is to continue to have a privileged relationship with the British market.”
To contact the reporter on this story: Henrique Almeida in Lisbon at halmeida5@bloomberg.net
To contact the editors responsible for this story: Joao Lima at jlima1@bloomberg.net, Jerrold Colten
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