The outbreak of Covid-19 last year has hit tourism like a ton of bricks, with many countries across the globe experiencing a massive slowdown in the industry. For example, Germany’s tourism sector lost an astronomical €161 billion in 2020 alone, states the website http://www.fitformoney.de. Now, Portugal’s tourism industry is bracing for the full impact of the pandemic.
A recent report by the global consultancy McKinsey states that the slowdown in tourism could cost Portugal around €60 billion in GDP by the time the industry is estimated to recover from the impact of Covid-19 in 2023. This is a whopping 26 percent of the country’s GDP in 2019. In addition, up to 600,000 jobs in the sector will be lost. This translates to roughly 600,000 people losing their livelihood. It is also predicted that many of these jobs will not be recovered.
This is a concern since tourism makes up 18.6 percent of Portugal’s total job number. And in areas such as Algarve, Azores and Madeira, this number stands at over 20 percent. But this is not all. The research also looks at more indirect effects of the decline in tourism on other sectors “which depend on this traffic to stay afloat, such as shopping centers, restaurants and retailers.”
“While it is impossible to predict when the sector might show signs of recovery, there are many measures that the sector’s ‘players’ could be developing in the immediate term … for a faster and more sustainable recovery,” states the consultancy. Some of these include digitalization to make companies more competitive and collaboration within the tourism sector.
The report also points to some other important factors that could influence how quickly the country recovers from the slump. Some of these are the appeal of the particular destination in question, quality of healthcare, as well as focus on sustainability and business travel.
In addition, the Mckinsey report highlights that some tourist areas are likely to recover faster than others. These include eco-tourism, cultural tourism, religious tourism and cultural tourism. On the other hand, areas that are likely to take longer to recover include cruise travel, group and solo travel, urban tourism and event tourism, which encompasses meetings, exhibitions and conferences.
Late last year, Portugal’s Tourism Secretary Rita Marques expressed her concern that some regions of the country such as Algarve are overly dependent on tourism – and particularly tourists from the UK – for income. “We need to diversify… but we will work to guarantee the Algarve continues to welcome all British people – no matter what happens with Brexit,” Marques said.