ECONOMY-PORTUGAL: Soaring Eurocup Prices Could Hurt Tourism Industry

By Mario de Queiroz Reprint | | Print |

Mario de Queiroz

LISBON, May 28 2004 (IPS) - Perusing a multilingual menu in a restaurant in downtown Lisbon, IPS found that prices were significantly lower in the Portuguese section than in the pages printed in German, Spanish, French, English and Italian.

The owner offered the following explanation: ”Foreigners eat more than the Portuguese.”

Whatever the excuse given, the disproportionate price hikes by hotels and restaurants in Portugal as the European football championship, Eurocup 2004, approaches could deal a severe blow to the economy’s goose with the golden eggs – the annual invasion of tourists from the rest of Europe who flock to this country’s sunny beaches.

The tourism industry simply ignored the government when it began to warn late last year that it could be fatal for the economy if Portugal begins to gain a reputation as an expensive vacationing spot.

Studies have found that the average European largely bases his or her vacation plans on recommendations from friends, workmates and neighbours.

Former luxury hotel executive and tourism expert Luis da Ponte told IPS that ”it would be a tragedy for Portugal if half a million visitors, the number expected for the Eurocup (in June), were to return home saying our country is very expensive.”

The latest Portuguese Institute of Foreign Trade (ICEP) statistics show that in 2002, tourism accounted for 4.8 billion dollars of Portugal’s Gross Domestic Product (GDP) of 160 billion.

And the year before, the tourism industry produced almost 7.6 billion dollars in revenues for the economy.

Portugal largely escaped the global tourism crisis triggered by the delay in the recovery of the European economy and by the lingering fears generated by the Sep. 11, 2001 terrorist attacks on New York and Washington, which involved commercial airliners.

In fact, this southern European country’s share of global tourism flows grew from 1.5. to 1.7 percent between 2001 and 2002.

But tourism operators have turned a deaf ear to ICEP recommendations to keep prices within reasonable limits.

Instead they have staked their bets on the short period of windfall profits during the Eurocup 2004, when 16 national football teams will compete from Jun. 12 to Jul. 4 in 10 stadiums around Portugal, and have scoffed at the spectre of empty beaches raised by those who warn that visitors could be scared away in the future by today’s high prices.

During the three-week football championship, rental prices for modest units will run as high as the cost of five star hotels during normal tourism seasons.

In fact it is already virtually impossible to find a room during those three weeks, especially in Oporto, Braga and Guimaraes, the three northernmost towns where matches will be played, because many owners of pensions and other lodgings are not taking reservations, with the hope of further inflating prices as the championship gets under way.

The cost of a double room in a three star hotel in Braga will soar from the usual 47 dollars to 223 dollars a night during the Eurocup – a 473 percent increase. And a room in a five star hotel in Lisbon will cost a whopping 544 dollars a night, up from the usual average of 223 dollars.

The Spanish province of Galicia, which borders Portugal to the north and is no more than two hours by bus from the stadiums of Oporto, Braga and Guimaraes, does not plan to let the business opportunity pass.

The province is offering, at low season prices, lodging for thousands of Europeans who can no longer find a room in northern Portugal or who are indignant at the soaring Portuguese prices.

With devastating irony, analyst Joaquim Fidalgo criticised what he called the ”gorging on profits”, in his Wednesday column in the Lisbon daily newspaper Publico.

”We Portuguese are so clever. In terms of tourism and prices, there was already a low season and a high season, and even a kind of ‘super-high’ season during periods like New Year’s, the three days of Carnaval, Holy Week and the first half of August, when prices rise between 50 and 100 percent,” wrote Fidalgo.

But now, ”some of our hoteliers have invented the ‘sky-high season’, when prices rise fivefold,” he added.

If the hotels and restaurants would set more reasonable prices, said Fidalgo, many of next month’s ”football tourists” might return to Portugal on vacation in the future.

But, he complained, the tourism industry’s slogan is ”come now, pay, don’t protest, and of course if you don’t want to, don’t come back, because we like to earn everything in one sitting, and if possible, right now.”

Analysts like da Ponte say such behaviour could hurt the tourism industry, which is a key sector of the Portuguese economy not only due to the revenues it generates, but also because of the direct and indirect employment it provides in this country of 10.2 million, which ranks 17th on the global list of tourism destinations.

ICEP statistics show that 27.2 million people visited Portugal in 2002, including 11.6 million who stayed overnight in the country, and thus were classified as tourists.

Over half of the visitors came across the border from Spain, but only a small part were counted as tourists, because due to the geographic proximity, many of them had no need to stay overnight.

In terms of hotel occupancy, the largest group of tourists (31.2 percent) came from Britain, followed by Germany (19.6 percent), Spain (7.8 percent), the Netherlands (7.3 percent), France (4.3 percent), Ireland and Italy (3.4 percent each), and Sweden (3.1 percent).

Da Ponte pointed out in his interview with IPS that with the exception of Ireland, the national teams of the countries that send the greatest number of tourists to Portugal ”are participating in the Eurocup.”

That means that ”what their fans and the more than 8,000 accredited journalists say about us when they return home is extremely important for the national tourism industry’s development strategy,” he underlined.