The Algarve residential market will gradually recover from the Covid-19 crisis with the region expected to remain as popular as ever. However, technology and client-centric products and services will be the rule rather than the exception in the post-Covid world, according to sector pundits who took part in a webinar titled ‘The Algarve Property Market – Overcoming C-19’, organised by the Algarve Resident in association with the British-Portuguese Chamber of Commerce.
How the current Covid-19 pandemic is affecting the Portuguese economy, the tourism sector and businesses has been thoroughly debated in recent weeks. What has been less discussed is its impact on the Algarve’s residential, resorts and second-home markets, begging the question, what factors will motivate buyers in this sector post-pandemic?
Miguel Palmeiro, Commercial Director of Vilamoura World, is reassuring when he states what has become a reliable mantra of truisms for many in Portugal for years: that the Algarve region has the best to offer when it comes to relocation – good weather, excellent infrastructure including a refurbished airport, state-of-the-art health facilities, fine food and wine, and wonderful beaches, all of which mean it scores top of the list when it comes to that well-worn cliché ‘location, location, location’.
The Algarve also has the second highest GDP in Portugal and the second highest property values per square metre after Lisbon.
The holiday region, he says, is a consolidated destination in terms of real estate, where you can find a wide range of investment opportunities, from apartments and homes in resorts to guaranteed income-generating investment properties.
“Buyers will discover that being in the south of Portugal, away from concentrated conurbations, will no longer be a competitive disadvantage in a post-Covid world, but rather an advantage as social distancing becomes a premium and the Algarve has one of the lowest population densities in Portugal. It also has the country’s largest foreign community, which brings a dynamic of its own in terms of the real estate sector with a balanced, quality stock and no over-supply,” says Miguel Palmeiro.
But if the Algarve has it all, UK buyers should not be blind to the potential threats arising from Brexit and should use the current lockdown period and the Brexit transition period to December wisely.
Gavin Scott, Senior Partner of financial advisers Blevins Franks, flags up a number of threats which need to be planned for in the transition period. Top of the list is the impact on sterling pensions.
Pensioners used to get €1.50 per £1 but are now very close to Euro parity, with relative net worth falling 35%. There could also be a 25% overseas transfer charge on pensions once the transition period ends, so he stresses that people have a short window of opportunity now to move.
Scott says there are also other tax incentives like the Portuguese government’s non-habitual resident (NHR) scheme, which is “unlikely to change”. He advises potential movers to use the furlough time to “make those plans now rather than later” and adds that, so far, the response from potential buyers has been encouraging.
On April 1, there was a change in Portugal’s pensions tax whereby pensions from overseas which had been subject to zero tax will now face a 10% tax from the UK. However, tax-free dividends from overseas, with no capital gains tax to pay, remain unchanged in Portugal on property sales in the UK. “Brexit will not affect any of these benefits since agreements were already in place before,” he says.
“Movers need to match their Euro liabilities, take adequate tax planning steps, think about when to capitalise on ISAs, offset UK allowances against tax so that these remain the same regardless of Covid-19 and Brexit, and focus on pensions and maximising the opportunities to come,” Scott advises.
Tiago Chaves, Senior Property Consultant at Fine & Country Algarve, said they had used the lockdown to maximise digital technology with online marketing, creating new ways of increasing exposure of their properties through videos, slideshows, virtual tours and improving property listings.
“An increase in home working will likely have an impact on the residential market, with higher demand for combined home-offices with good Wi-Fi a priority,” he says.
“We were very busy up until the Covid crisis, but enquiries tailed off slightly giving us more time to concentrate on existing clients. In the past few weeks, however, enquiries have been increasing again.”
Prices remain stable
Regarding prices and whether the Covid-19 crisis and ensuing recession were likely to drive prices down, Miguel Palmeiro says that, since the last crisis, prices have risen by 20% on average and are back at 2007 prices.
“I think we have to establish a differentiation on pricing depending on second-hand or new-build properties. Regarding second-hand, it depends on the need for individuals to sell. The demand is there and yet there is not an oversupply,” he says adding that the timeframe to sale may be longer. These will come into the market fast and sell at lower prices.
However, he says in the case of new build, there is a totally different market structure regarding developers.
“Today we don’t have an over-financed market and, at the same time, we don’t have an oversupply of stock. In our case in Vilamoura, which is still under construction, we have over 50% sold. We don’t have any reason to lower prices. We have to look at the market over time and calmly see how it will react,” he adds.
In Portugal, he says there was a 1.2% increase in January and 1.4% in February while in March there was an increase of 0.4%, meaning that for now there are no conditions to warrant cutting prices for new build.
Tiago Chaves agrees with the forecast and states there is still demand backed up by supply. “The interest is still there, and I don’t see prices dropping unless private individuals find the need to sell.
“Yes, we are seeing some vultures circling around looking for opportunities, but I don’t see such opportunities happening in the short term, if ever,” he said.
Miguel Palmeiro says that Vilamoura World has had to adapt very quickly, with Artificial Intelligence (AI) and digital technology coming into the business fast as a result of Covid-19, with online viewings, webinars and virtual launches, while construction has continued as normal.
“Our clients are the most important aspect for us, and we’ve been giving them updates and news about the new online tools that we have developed.”
Palmeiro does not think prices will drop dramatically, if at all, because there is no market oversurplus. “Real estate has a long-term cycle and we don’t make snap decisions over an event like Covid-19. We have to see how this evolves over time, but we have made a leap with technology which will make us more efficient with clients and partners.”
Bounce back in demand?
While it is difficult to predict what will happen post Covid-19, Fine & Country’s Tiago Chaves sees the recovery being more of a U-shape rather than a sharp V-shape with “clients gaining confidence gradually”.
The estate agent believes Portugal will be able to take advantage of all the good press and international awards it has won over the past few years, and more recently the international praise it has garnered for the way it has handled the crisis, particularly the latest accolade from Forbes magazine which trumpeted Portugal as the ‘Best place to live and retire post Covid-19’.
Moderator Andrew Coutts of the ILM Group, a sustainable property and resorts development consultant, says it is important to remember that the Algarve residential property market is now “very balanced in terms of supply and demand”, which is a positive post-financial crisis legacy as investors are careful not to overdevelop.
Tiago Chaves thinks that for those looking for a holiday property, there would not be significant changes in their requirements for a low-maintenance, easy lock-up-and-go property, with pool and beach proximity and amenities, as well as investment-return potential.
There may be, he says, a change in demand in the residential market with ‘relocators’ who will be more specific and selective in their requirements for good-quality homes with more space, high specification standards, including insulation and energy efficiency, and good internet connection. And these will not necessarily be looking for properties in resorts, but increasingly in the community.
Miguel Palmeiro says that the biggest shift for resorts will be for more human-centric developments where people will become the protagonists when buying property. There will be more remote working and meetings and, therefore, an adaptation to a hybridisation of home space, with properties serving multiple functions as home, office and holiday retreat.
“We will see more cost-effective, technology-driven construction, the industrialisation of the manufacture of concrete and other materials with prefabricated modules and units being put into place,” he says.
“We will also be using 3-D technology and, in terms of customer relationships, we will also see the importance of ‘gamification’ where screen-by-screen with the client we can decorate the entire home so that when they arrive, they will be able to immediately close the deal,” Miguel Palmeiro concludes.
By Chris Graeme
Colt Technology and Services • Conrad Algarve • DLA Piper • Edge International Lawyers • EY • Fine & Country Central Algarve
InterContinental Cascais-Estoril • InterContinental Lisbon • JLL • Joyn Group • Millennium bcp • Moneris
The oil industry has been particularly hard hit by the Covid-19 pandemic as a result of falling demand provoking a record low in international crude prices, huge market volatility and a glut in stocks. The CEO of BP Portugal Pedro Oliveira discusses ‘Oil Price Volatility and its Impact on the Energy Market’ with the British Portuguese Chamber of Commerce (BPCC) in a webcast moderated by António Comprido, General Secretary of APETRO, the association which represents energy, oil and gas companies operating in Portugal.
British Petroleum (BP), like all oil producers worldwide, has suffered from effects of the international economic shutdown caused by the current Covid-19 pandemic as demand has fallen across the board from all sectors at a time when there was already a surplus on the market.
This has been greatly aggravated by a falloff in China’s industrial production levels and, as a consequence, its oil importing requirements, not to mention the grounding of airline fleets around the world.
The actual and expected collapse in demand from China and the rest of the world as the economic impacts of Covid-19 hit home has sent crude prices to their lowest levels in more than a year.
But to what extent is the collapse in prices circumstantial and structural and what will be the recovery rates for a product which is still of prime importance for both economies and society?
BP Portugal boss says that “there is not a single oil producing company in the world with a balanced cash-flow since the price of crude fell to below US$35 per barrel. All of these companies, without exception, are in difficulties, particularly when they have to meet their shareholder commitments. Both BP and Shell are responsible for 30% of the dividends distributed on the FTSE 100.
Price volatility was the least volatile in the period between 1900 and 1970 and until the first oil crisis in the early 1970s.
Before the beginning of March 2020 the price of crude had been stable at between US$45 and $US65 or “within the comfort price zone” known as a ‘fair price’ for crude. This is a price band within which oil companies can distribute promised dividends to shareholders, in which they don’t strangle demand, make enough profit to invest in and explore renewable energy alternatives, and can maintain some semblance of balance in an overall unstable and volatile panorama.
“If prices go over $US75 demand is stifled and the economy is impacted, and if it falls below US$45 the financial viability of these companies is put at serious risk in terms of making enough money to invest and pay out dividends to shareholders” explains the BP Portugal CEO.
“From March demand fell 30% below the expected price, while there was a lot more offer in the market than demand warranted. But what is subjacent to this volatility? We have a relatively simple model, but we have never been able to predict or influence the price, and those factors we thought could condition the price is now no longer valid” he says.
Investors and traders, he says, who bought long (i.e., on future projected expectations) now find that if they try to sell the oil they purchased they will face huge losses.
But even before that, the model for market behaviour and the factors which conditioned prices which had been relatively stable until the late 1990s, had no longer held true for 20 years, so this phenomena didn’t just happen with the pandemic from March.
In February OPEC producers tried to negotiate a production cut amid concerns that Covid-19 could impact demand — which is exactly what transpired from March. Russia walked out on the negotiations and Saudi Arabia responded by undercutting oil prices by US$6-8 per barrel before, on 8 April, Russia and Saudi finally arrived at an agreement to slash oil production by 10%.
But by then it was too late. Prices had already fallen by up to 60% from February highs and prices sank to below zero with May futures for WTI oil closing at -US$37.63 on 20 April. For the first time in history producers were willing to pay traders to take oil off their hands.
In the past oil reserves had been relatively scarce. Over the past 20 years, not so much through exploration but rather improved technology, we have discovered two barrels of petroleum for every barrel consumed. We have gone from talking about peak of production to peak of consumption by 2040.
Automation has taken centre stage in recent years, which for the oil industry was a matter of necessity. When oil prices fell 75% over 20 months in 2014, the industry was forced to modernise.
By 2018 prices had recovered, hitting record levels in the United States as technology has reduced operating and maintenance costs and increased efficiency in marketing and distribution.
The second point is that 20 years ago OPEC was responsible for two-thirds of oil production worldwide. Today it is only worth one-third and no longer has the capacity to influence the price of oil in a structural manner, although it can still substantially act as an arbitrator over the oil price.
Also, the past decade has seen a significant impact from shale oil (10% of world production) particularly in the United States. The International Energy Agency had suggested the US could well overtake Saudi Arabia and Russia to become the world’s biggest oil producer this year and energy self-sufficient by 2030.
However, while US shale oil production will probably have a positive impact on US domestic oil production and reduce its level of oil imports, most analysts suggest it will not affect the global oil supply and in reality the US will never be able to become self-sufficient or overtake Saudi and Russia, let alone have the power to deny OPEC the power to set international oil prices.
“Shale oil production, because its output can be activated and deactivated relatively easily, unlike conventional crude oil extraction, has softened the volatility curve in times when there have not been the sharp external shocks that we are seeing now” says the BP Portugal CEO.
“The oil market is very good at reacting in terms of operations to an increase in demand, but is not so effective in dealing with falls in demand and the very aggressive falls in price when demand slacks” he adds.
Under normal circumstances, the high level of efficiency in the industry means output production is exploited to the maximum. However, the unstable imbalance currently being seen, with an intensity in volatility, the production of shale oil because its production can be activated and deactivated relatively easily has softened the curve when there have not been such sharp external shocks as we are seeing now.
“These exceptional circumstances have ‘only’ led to an aggravation of a volatility that had already been in the market for some time” says Pedro Oliveira.
Stuck with a glut
Oliveira says that before the pandemic the world consumed around 100 million barrels of oil per day, but with the fall in consumption now, which implies a fall in consumption of 25-30%, “we are currently consuming around 70-75 million barrels per day”.
All those who bought under the positions three or four months ago in the futures markets, means they are stuck with 25 million currently unwanted barrels of oil which are costing a fortune to sit around in storage, hence the current desire to offload it despite making a loss.
The rising stockpiles of crude is now overwhelming storage facilities and has forced producers to actually pay buyers to take the barrels they cannot store — that’s 65 million barrels of oil in storage for each two days of consumption.
In fact, by the 20 April a record 160 million barrels of oil was being stored in supergiant oil tankers outside the world’s largest shipping ports, including the US Gulf. The last time floating storage reached levels even close to this was in 2009 when traders stored more than 100 million barrels at sea until it was able to offload stocks when the economy began to recover.
The effects on BP
So where does this leave BP which as seen its profits plummet 66% as the coronavirus hit oil demand?
BP says that underlying replacement cost profit, its definition of net income, was US$800M in the first quarter of 2020 – down from US$2.4Bn like-for-like in 2019.
However, its chief executive Bernard Looney says the company will continue to pay shareholders a dividend. “Our industry has been hit by supply and demand shocks never seen before, but that is no excuse to turn inward,” he said.
But low oil prices can leave BP with a problem. If it wants to fulfil its target of going green and being carbon neutral by 2050 it needs higher oil prices to make the investment needed to do so.
“We are trying to protect our financial derivates as far as possible to get through this very complicated period, we are looking at this crisis as a company with over 100 years of experience that has suffered losses and faced crises before” says Oliveira.
BP is going through the largest reorganisation in its history with an ambition to become a net zero company by 2050 or sooner through a five-target plan which includes a 50% cut in the carbon intensity of products it sells by 2050 and installation of methane measurement at all BP’s major oil and gas processing sites by 2023 and slash methane intensity of operations by 50%.
It also aims to increase the proportion of investment into oil and non-oil and gas businesses over time.
“This crisis has taught us a series of lessons and we want to accelerate our reorganisation and strategy going forward because in 10 years we want to be a different company”. And he concludes that yes, the world will continue to need oil for some decades. When demand begins to pick up, and we are going to continue to need oil-driven energy for the foreseeable future, prices will rise again aggressively,” he concludes, even though analysts say the price of a barrel of oil will remain below US$50 for the foreseeable near future.
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Venture capitalist Tim Vieira, CEO of Special Edition (Africa) and Bravegeneration (Europe) is a well-known TV personality who appeared on the first series of Shark Tank Portugal tells members of the British-Portuguese Chamber of Commerce that in a post-Covid-19 world “everything has changed and everything is new”.
Before the advent of coronavirus, successful international businessman Tim Vieira felt pretty good about life. His venture capital business was going well and he was finally in a position to really enjoy life and too his family on his dream holiday; a trip around the world.
“My life before the coronavirus wasn’t bad at all, it was starting to master my work-life balance, travelling extensively for work and pleasure. We were consolidating our mature operations with exits in sight with startups on the up and close to becoming real businesses and some major businesses that were looking very interesting,” says Tim Vieira.
Then came Covid-19. The world went into lockdown and he realised that many of the businesses he had invested in might not survive, or at least not be as successful as he had thought. It was time to take stock and have a rethink about business and what is important in life.
“Focus on your dreams because the nightmare scenarios are beyond your control” he says adding that the pre-Corona world was made up of “running around”. “We’ve been forced to stop and take a break to understand that the future is not within our control” he says.
Life will be different
“The good news is that we are all in the same boat” says Tim Vieira. The one constant upon which most business associates he knows agree, is that life post-Corona will be different.
The positive, he says, is that scientists find a working vaccine quickly. The negative is that they don’t and the virus bounces back again in the winter because governments around the world simply will not be able to afford shutting down the economy and society a second time. In his opinion, leaders have not done well in handling this disastrous crisis. The USA, China, EU and WHO have proved disappointing and have offered little in the way of effective leadership.
Vieira points to the projections that every week in lockdown represents a loss of between 0.5% to 1% in GDP with forecasts of GDP down anywhere between 7-15% by the end.
“Working capital is the most vital aspect for any company now, preserve it by negotiating payments with creditors, reducing costs as much as possible, renegotiating contracts with suppliers and employees and finding securement in order to survive during and grow after the crisis. The longer you can survive this crisis the better shape you will be in as competitors fall out of the marketplace” the investor says. “Don’t survive at any cost, because if you do get into debt that will be another problem to deal with” he advises.
The Shark Tank celebrity does not believe there will be a V shaped recovery, rather more of a U shape one to the economy. Public debt, he says, will be huge and taxes are on the way. Countries will become more nationalistic and less China focused.
There will he says, be more demands from citizens from their governments in terms of security and health. Governments will be forced to introduce higher taxes for the rich while technological companies working remotely will do well.
The forecast economic depression could provoke higher inflation or even deflation. The only way to get out of the crisis will be to grow economies, build infrastructure and invest in promising future businesses, and attract investors and residents which is particularly important for Portugal with its low population rate and reliance on tourism.
Tim Vieira says people will suffer more from depression due to uncertainty. There will be more requirements on being allowed to travel and less planes to travel on as airlines go bankrupt.
“If the virus returns I believe we won’t be able to lockdown for a second time, we’ll have to live with it and work around it, because a second lockdown could cause more economic problems and social unrest” he warns.
What are the options?
So what are the options? Can we snap back to how it was before the pandemic? Vieira believes it will be difficult as the world is now a different place. “I am confident and optimistic in looking forward to a better post-Corona-world, but we must be realistic because it will get worse before it gets better. It will probably take longer than we expect,” he warns.
“Some will close their businesses, others will lose their jobs. We will have to ask ourselves, does this business need to exist and does my job make me happy? The businesses that are going to close are the ones that weren’t profitable before Corona or won’t be relevant in a post-Corona world. Life is too short and precious to simply get by. We need to do more than get by, we need to flourish. We need to provide services that people need and want. To be the best at what we do, you have to love what you do and more emphasis will be on that,” he believes.
“Priorities will change. Some may want to spend more time with families, scale down and accept living with less to enjoy life more, others may want to work from home. Only after helping yourself will you be able to help others,” he muses.
Where are the opportunities?
The entrepreneur thinks that food businesses must now have online and delivery options. “Now you know how to, you do it. Make videos of your chefs coking, publicise your restaurant hygiene and product selection, interact with your clients and build on client relationships and grow your reach,” he advises.
“You’ve got to adapt to people not being able to sit close to each other for a while. If you’re having to work from home, this might change and increase your delivery demands. Work both offline and online,” he suggests.
Tourism holidays might be less frequent but longer. Business travel will be under pressure with more meetings online as travel becomes more difficult. Experience travel with beautiful locations will become more sought after. Friendly countries will attract more tourism and longer stays and travel will become the ultimate luxury as people have to think carefully about where they want to visit.
Working while travelling will become an option so hotels will have to incorporate this option in their stays. Smaller and boutique hotels will charge premium rates as people choose to stay at a distance from each other, so adapting to new social norms and health requirements will be an advantage to attract more tourists. “The good news is that we’ve still got our beaches and mountains, we’ll still have wonderful people and great wines,” he says.
Education online, online courses with the benefits of reduced costs, medical services, doctors, coaches, fitness in all areas that can move online to expand the reach they had before should now do so. “You can adapt your business by improving your online presence,” he says.
“If you are a professional and have know-how to share, you could build a successful business online. It will probably become a big part of your business,” says the entrepreneur. Tim Vieira says small businesses can prosper by providing unique products and local business may be better for many going forward.
“Countries will start looking inward in terms of manufacturing and jobs as they prepare for the next crisis. Already companies are returning from Japan and China. China will be seen in negative terms because it was the origin of the crisis, is not environmentally friendly, and is perceived in its own right as anti-foreign,” he opines.
However, although China will not be the flavour of the month, retailers and consumers still look for the best deals and China can’t easily be substituted. “We are still consumers so there will continue to be space for China”.
Robots and Surveillance
The Shark Tank investor says that many mundane jobs will be automated in Europe so that companies can compete with China and robots take over more vital jobs generally and will be needed in crisis periods.
“The robot tax could and should become a reality. Companies will have to pay a social security on robots to help pay for retraining and job losses. It’s a win-win all around because robots when they get old don’t go into retirement”.
Surveillance, he says, will become more widespread, in the name of security and future crisis prevention. Events will be subject to new entry conditions aimed at reducing exposure.
The Job Market
Vieira believes that more value will be given to jobs that kept us going during the crisis. Both society and governments will value workers involved in primary needs and the better and more qualified the people in these jobs are, the better we’ll be able to cope with the next pandemic.
Tech companies will be in the best position to offer the highest salaries, less prone to the downturn and will aggressively expand and keep employing people and paying the best salaries.
Job sharing might become a new way of working.
“Make sure you embrace the new reality and go on to the offensive rather than the defensive sooner than later, and above all, if you are worried about your assets, even though the banks are in a better position than they were, make sure you diversify your asset portfolio,” he advises.
“The world is more unpredictable, so all the future plans you had, forget them and make new ones. Now is the perfect time to change your life. Don’t be anxious about the new world, just get involved, learn fast and you will be fine,” concludes Tim Vieira.
By Chris Graeme
Colt Technology and Services • Conrad Algarve • DLA Piper • Edge International Lawyers • EY • Fine & Country Central Algarve
InterContinental Cascais-Estoril • InterContinental Lisbon • JLL • Joyn Group • Millennium bcp • Moneris
Pedro Oliveira, CEO da BP Portugal: “Na linha da frente das operações tomámos todas as decisões possíveis”
A BP Portugal encerrou todas as lojas e passou a operar os postos de abastecimento através do ponto de pagamento noturno. Numa rede com quase 1300 postos, cerca de 7500 operadores de caixa e 300 mil transações por dia, as situações complexas sucedem-se de minuto a minuto.
Portugal encontra-se em estado de alerta como resposta à emergência de saúde pública que o país atravessa, resultante da situação epidemiológica do novo Coronavírus. E se é verdade que nas simulações de business continuity plan, a BP Portugal já tinha simulado esta situação, a realidade é sempre diferente.
“Nada se lhe compara, mas as simulações ajudam a enfrentar estes eventos com mais confiança. (…) Estamos a gerir com a confiança de um passado que fala por nós, mas com a humildade de quem nunca viveu algo parecido”, conta Pedro Oliveira, CEO da BP Portugal.
O compromisso da BP Portugal mantém-se: continuar a disponibilizar um bem essencial e de primeira necessidade ao funcionamento da sociedade neste contexto. Embora a prioridade agora seja proteger as pessoas, os clientes e a sociedade em geral.
Em entrevista à Líder, Pedro Oliveira partilha a lógica de consciência social da BP e a nova atuação das operações ao nível da sede e na linha da frente, de forma a minimizar contactos e interações diretas entre clientes finais e pontos de venda avançados.
O que é mais assustador nesta crise de saúde pública mundial?
A aparente inevitabilidade de nos termos que deparar com o dilema ético que implicará escolher quem tem acesso a equipamentos médicos que poderão fazer a diferença entre viver ou morrer.
Quais as medidas implementadas para assegurar a saúde dos vossos colaboradores?
Ao nível da sede, desde a primeira hora e com a antecedência necessária, passámos a trabalhar todos desde casa e temos neste momento as operações bastante estabilizadas a esse nível. Na linha da frente das operações tomámos todas as decisões possíveis para minimizar contactos e interações diretas entre clientes finais e pontos de venda avançados. Por exemplo, encerrámos as lojas e passámos a operar os postos de abastecimento através do ponto de pagamento noturno.
Quais os impactos no negócio?
Será certamente muito material, mas neste momento é a nossa última preocupação. Neste momento a nossa prioridade é proteger as nossas pessoas, os nossos clientes e a sociedade em geral numa lógica de consciência social.
É possível já começar a desenhar algumas medidas a esse nível?
Neste momento, concentramos todas as nossas energias em proteger as pessoas e em certa medida garantir que conseguimos continuar a disponibilizar um bem essencial e de primeira necessidade ao funcionamento possível da nossa sociedade neste contexto.
Situação complexas em concreto que enfrentam e como pensam atuar?
Numa rede com quase 1300 postos, cerca de 7500 operadores de caixa e 300 mil transacções por dia, como deve imaginar, as situações sucedem-se de minuto a minuto. Estamos a gerir com a confiança de um passado que fala por nós, mas com a humildade de quem nunca viveu algo parecido. É verdade que na dinâmica normal que temos de simulações de business continuity plan já tínhamos simulado esta situação, mas a realidade é sempre a realidade… nada se lhe compara, mas as simulações ajudam a enfrentar estes eventos com mais confiança.
Qual o papel que o Estado deve assumir perante as empresas?
Não é o Estado, somos todos nós, o Estado será apenas um elo de transmissão e redistribuição. Este é um custo social que todos teremos de suportar à razão das possibilidades de cada um. No entanto, e para já, a grande prioridade do Estado será fazer chegar rapidamente rendimento a todos os que se estão a ver realmente privados deste (empresas e colaboradores), de modo a manter uma rede mínima a funcionar. Depois, as contas do “deve e haver” deverão ser feitas mais à frente.
Conselhos que deixa aos portugueses que lideram outras empresas ou organizações?
Não sou ninguém para dar conselhos, mas não resisto a pedir que nos concentremos no essencial que é a proteção das pessoas. Para além do mais, este é o momento de ouvir bem, de ler bem a realidade e de antecipar necessidades e atuar.
E aos portugueses em geral?
Aos portugueses aconselho o mesmo que a mim próprio. Com resiliência, respeito pela ordem e pelo próximo, tudo se resolve. Este é o tempo de todos e não de alguns. Nós temos uma grande vantagem sobre este nosso inimigo, nós pensamos, e se pensarmos bem em conjunto somos uma espécie com uma capacidade de superação sem igual. É nessa dimensão que temos de apostar tudo para vencer esta adversidade como tantas outras.
Texto e Foto:
Duarte Libano Monteiro –
Country Manager, Ebury Portugal
Como é que a Ebury, enquanto organização, está a reagir aos desafios deste surto epidemiológico?
A Ebury Portugal, face à atual crise do Covid-19, e em prol da segurança dos seus colaboradores e dos demais, está desde o dia 13 de Março a 100% em teletrabalho assegurando todos os seus serviços, com a devida normalidade. Como organização baseada na Cloud, a Ebury sempre esteve muito bem posicionada para operar a partir de qualquer lugar. Isso foi fundamental para apoiar o rápido crescimento dos últimos 10 anos. Com este recurso essencial é possível continuar a fornecer todos os serviços aos clientes neste momento crítico.
Todos os serviços da Ebury continuam totalmente operacionais. A tecnologia utilizada pela Ebury permite que os pagamentos e transações internacionais sejam processados normalmente através do gestor de conta ou do Ebury Online (uma plataforma da Ebury), disponível 24 horas por dia, 7 dias por semana.
Com 1000 colaboradores em 21 países, esta digitalização facilita todas as operações mundiais, que, na verdade, eram já uma constante no nosso dia-a-dia.
Qual a importância de um plano de continuidade de negócio na v/ actividade atendendo à ameaça global que atravessamos com o Covid-19?
O negócio da Ebury está a decorrer normalmente e em pleno funcionamento. Continuamos a apostar, a acreditar e a incentivar a internacionalização das empresas portuguesas, sendo que atuamos como agente facilitador nas várias vertentes desse processo. Um bom plano de continuidade é essencial para o funcionamento de uma empresa, e no caso da Ebury em 48h tínhamos mais de 1000 colaboradores em mais de 20 países a trabalhar em teletrabalho mantendo o mesmo nível de serviço e assegurando os tempos de resposta aos nossos clientes. Pagamentos e recebimentos continuam a efectuar-se em diferentes moedas garantindo assim o rápido pagamento e rápido recebimento dos nossos clientes, ajudando a manter as tesourarias das empresas o mais estáveis possível, e garantindo a saúde dos nossos colaboradores.
Até que ponto a sociedade depende da transição para o digital para a sua sobrevivência, atendendo a que uma boa parte da economia em Portugal ainda é conservadora no capítulo da desmaterialização?
A transformação digital tem sido uma evolução natural para as empresas nos últimos tempos. No caso da Ebury, já iniciámos o percurso nesse sentido há bastante tempo, pelo que a digitalização da nossa actividade sempre foi uma constante. Isso permite agilidade nos processos bem como redução de custos, o que fornece aos nossos 1500 clientes uma resposta mais prática e eficaz para as suas necessidades. Em termos gerais, essa transformação foi acelerada nesta fase, por força das circunstâncias, nas empresas que operam em Portugal. Algumas de forma mais rápida e assertiva, e outras de forma mais complexa, devido aos sectores em que atuam. Mas penso que, em termos gerais, temos visto uma adaptação muito positiva neste sentido, com as empresas a rapidamente se adaptarem às circunstâncias e também a aproveitarem as oportunidades que até aqui não viam como fundamentais. Importante mencionar que em certos sectores, como a indústria, não é tão fácil a digitalização dos seus processos e para certas empresas é essencial que continuem com pessoas a trabalharem no dia a dia, para garantir o funcionamento do país e garantirem os bens e serviços essenciais.
Deixaria algum conselho às empresas do sector fintech no que respeita à definição, por design, deste tipo de planos de contingência enquanto instrumentos fundamentais do negócio?
Sendo as fintechs, por natureza, baseadas no digital, é importante que tirem partido desse seu habitat natural e facilidade de reinvenção em relação à banca e demais entidades do sector financeiro. Assim, devem permitir-se sempre desconstruírem-se e reajustarem-se aos momentos como o actual.
Quais as lições para o futuro que os negócios devem retirar deste tipo de fenómeno?
Fenómenos como este demonstram que os mercados podem ser muito voláteis e que devemos estar capacitados para trabalhar com plataformas digitais e de colaboração bem como contar com equipas transversais bem preparadas, dotadas de capacidade de adaptação e espírito inovador, como é o caso da Ebury. De qualquer forma, gostaria de realçar a adaptabilidade e resiliência das empresas portuguesas num momento como este.
The founder of the modern luxury golf tourism concept André Jordan shared his reminiscences of the past and views on the future at lunch promoted by the British-Portuguese Chamber of Commerce (BPCC) and the French Chamber of Commerce & Industry (CCILF) in Lisbon on 11 December.
An essential and brilliant mind in the tourism and real estate development sectors in Portugal for five decades, the Braziian-Portuguese entrepreneur of Polish-Jewish origins highlighted the wealth and employment created in the Algarve, an area of Portugal which was blighted by poverty and a lack of infrastructure.
In a ‘fireside chat’ approach moderated by Patrícia Liz, Managing Partner of Savills Portugal, André Jordan admitted that the real estate industry was “totally affected and influenced by outside events”
“We are worried by the central banks which are, because of a certain outdated habit, against the property industry whereas before they weren’t because they didn’t want their money standing still and not working for them” he said.
He also said that the world was facing challenges for which there was “no solution” and which are presented not just as a responsibility but as a blame. “All those things, which when I was young, made us proud – the progress, cars, planes, plastic (which his mother thought was a marvel) have now become “all bad” when in fact we aren’t to blame at all because it is all part of development and the great prosperity the world had seen was rooted in these developments.
“We have to see that the great poverty in the world which is much less than compared to what it used to be, particularly in Brazil when a few families dominated the wealth and 90% of her exports came from coffee, came from this progress” he said.
Turning to global warming, André Jordan pointed out that despite the criticisms of teenage environmental campaigner Greta Thunberg, before she came on the scene the world was “blind to the problems” that the world is facing. “Here was this child who saw that these problems would affect her and her generation while adults were happy to worry about it later” he said.
“People are very selfish. There is a lack of system and organisation with clear objectives on how to deal with the consequences of climate change. What is needed is a consensus on a world level to deal with it” he added; a programme similar to that used in companies to deal with this “really serious global threat.”
“We were able to overcome so many problems, from plagues and diseases like polio and we have to work together to solve these environmental problems” he said.
Artificial Intelligence, he explained, would put millions of people out of work, and that with the pace of change, for each 1000 made unemployed only 100 jobs would be created. On this, he felt there needed to be a global agreement that AI would stop at a certain point.
It also made him angry when Donald Trump was flippant about nuclear weapons and Iran. “Whoever used them will suffer the consequences in return. Everyone knows this and won’t use the bomb”.
“We have arrived at the time when all of us have to be great statesman and accept the great threats facing humanity as if they were our own.
André Jordan said he didn’t want to “dampen the mood” but warned that humanity was facing the consequences of a revolution in technology and artificial intelligence and it didn’t really know how to deal with the possible consequences of mass-unemployment as many routine jobs would be undertaken by robots and machines.
Causes for good
“I have always thought it worthwhile to get involved in causes in which there is no personal economic interest and profits. You get a lot more pleasure out of it” he said of the various youth causes he has been attached to over the years.
“In this respect I have allied my self to causes linked to art and education, youth and did my part and when I felt I had fulfilled my mission, I moved on,” he explained saying when these associations and entities continued and prospered her felt a certain satisfaction.
He said that despite the problems it had caused, one shouldn’t forget the success of capitalism which had created democracy, progress and had brought the best talents to the business world.
On the development of the Algarve, taking out the success of the Golden Triangle and Quinta do Lago, André Jordan said the region was so much better and more developed when he had arrived in the region 50 years ago when there was scarce a cinema let alone hotels and developments.
“The Algarve was a poor, rural area which was very charming but has nothing there. There were no book shops, shopping centres or galleries, hardly any cinemas let alone a direct motorway and when I bought the land for Quinta do Lago I met a couple there who had never ever even been to Faro!”
He said there were no professionals overall and certainly not in the real estate sector which was restricted to people putting for sale adverts in the newspapers.
There was a certain tradition in terms of hotels, a tradition of great formality, it was treated by the English residents like a small colony, mostly middle class who didn’t have that much money. One English woman said to him “Oh, I hear you’re doing a development near the airport. How convenient for business people!”
“I think the Algarve today is still one of the best preserved tourist areas in the world. I’m not talking about Albufeira or Armação de Pêra but compared to Southern Spain with huge buildings just five metres apart from each other, there has been a lot of concern from the large developers to preserve the locality and build quality developments” he explained.
“It is actually cheaper to do developments which are environmentally sustainable and correct than not in the long run” he said of the various environmental and water management awards the André Jordan Group has won over the years for his flagship developments of Quinta do Lago, Belas Clube do Campo and Vilamoura XXI.
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Portugal’s burgeoning ‘sharing economy’ has unlimited potential to enhance and redefine the lifestyle of future generations – but demands new solutions to promote long-term financial security, according to experts.
A brainstorming ‘think-tank’ hosted by the British-Portuguese Chamber of Commerce (BPCC) brought together international business leaders from the co-living, co-working, construction, property and international investment sectors. It involved delegates from Russia, Australia, Germany, Tunisia, Brazil and Angola alongside British and Portuguese counterparts.
The debate considered the pros and cons of the ‘Sharing Economy’ and short-term usage verses long-term ownership.
The ‘Sharing Economy’ is a term used to describe new methods of distributing goods and services, which differs from traditional models involving corporations hiring employees and selling products to consumers. In the sharing economy, individuals rent or ‘share’ things like cars, homes and personal time to other individuals in a peer-to-peer fashion. Further ‘commercial business models’ see companies providing a mobile app that suppliers and customers use to buy and sell goods or services.
While many positive developments were discussed, experts also cautioned for greater governance and control as the nation adapts to new and emerging trends. Delegates in particular warned that a proliferation of ‘sharing schemes’ could lead to generations of possession-less people lacking long-term financial stability.
Pedro Clarke, Partner at A+Architecture, said a major risk with new movements including co-living and car-share schemes is the creation of life-long ‘service users’ without assets. “The risk is that people are becoming decapitalized because they are renting everything,” he said. “This could lead to issues later in life if they need to retire or raise cash. Traditionally, people have sold or traded their assets, but this will no longer be possible if people are no longer accumulating wealth. There is no doubting the immense benefits of the sharing economy, with 1pc of the global population consuming more than the remaining 99pc. I am supportive of the concept but clearly a balance must be struck. We must carefully consider the long-term effects and implications of future generations potentially having no financial stake in society.”
The sharing economy has disrupted many traditional business models most notably affecting tourism, hospitality, working, living and transport sectors across Portugal.
Event sponsor Luis Silva, founding partner at Pedra Silva Arquitectos Lda, said the new movement is being fuelled by advances in technology along with economic and social change. “In recent years digital and creative start-ups have flourished in Portugal and disrupted the marketplace. They have capitalised on rapid changes in consumer behaviour and created new platforms geared towards greater choice and flexibility through shared assets. Within our industry we have witnessed major change in the way people are using space within the built environment. Co-living and co-working are two prime examples which continue to grow in popularity as people combine resources for greater experiences. Sharing maximises the use of an asset which is better for our planet, but also allows access to assets that otherwise would less accessible if the sharing concepts did not exist. This means the younger generation can kick start their businesses early by having access to shared workspace which can fast track business growth. The sharing economy is a fundamental part of Lisbon’s broader ‘smart city’ strategy to become more sustainable, competitive, participatory, creative, innovative and’ citizen centric’. Lisbon has drafted an urban development strategy for the coming decades committing more than €300million in related projects. Key objectives include attracting more inhabitants by improving the quality of housing, smart living services and smart ageing opportunities. The strategy also aims to drive growth, wealth and job creation by attracting more entrepreneurs and broadening access to higher education. While we already witnessing the positive impact of the sharing economy within this wider plan, it continues to hold huge potential to improve quality of life through increased energy efficiency, mobility, social cohesion, local regeneration and citizen participation.”
Liam O’Donnell from DNN said new generations are crying out for flexible solutions but they will need to be driven and implemented largely by the private sector. “People no longer live or work in one place or one city,” he said. “There is a growing demographic of people who don’t buy their first property until their mid-30s, with others choosing to live with parents until later in life. Given this backdrop people are looking for flexible solutions to live in their own space, without having to worry about long rental contracts. The sharing economy has great potential to provide solutions to these people. However, we need the right sort of investors who can supply capital to support new concepts. We cannot simply rely on government and public sector funding. We need serious players who believe in the concepts and can roll out ideas which have been successful elsewhere around the globe. One of Lisbon’s greatest assets is its growing international expat population bringing high-level skills and services. It’s a special place with all the raw materials to attract the top talent to drive new and emerging trends. The ‘sharing economy’ will play a major role in the future helping elevate and improve the lifestyle of younger generations. It will also play a fundamental role in the business community helping entrepreneurs take necessary risks without incurring huge cost.”
The debate led to a closer examination of the precise definition of the ‘Sharing Economy’. There are two main types of sharing economy enterprises. Firstly, ‘commercial business models’ in which a company provides (for a fee) a mobile app that suppliers and customers use to buy and sell goods or services. Secondly, ‘Not-for-profit initiatives’ usually based on the concept of book-lending libraries, in which goods and services are provided for free or for a modest subscription.
Humane City Live Founder Alexander Pichugin said there is a controversial aspect to the sharing economy. “There are certain platforms under the sharing economy umbrella which could be considered exploitation of the poorest segments of society, who essentially cannot afford to buy assets,” he said. “There remain questions surrounding ethics and sustainability as those that do not own assets tend to pay more for the same products over the course of a lifetime.”
Meanwhile, Besma Kraiem of IBK Partners said we are witnessing a paradigm shift within ownership. “Much of the sharing economy appears to involve people acquiring assets or part of the value chain and using them to provide services to other people who can’t afford them,” she said. “This is not the definition of sharing in its truest sense. My understanding of sharing is where people exchange goods or services for little or no cost. What we are discussing here is a completely new form of economy, and one which will require the development of new methods and solutions to protect people potentially without assets in the future. We cannot expect traditional models of wealth generation and security, which have been used to protect people in past, to be applicable in the future. We will need new solutions in response to new forms of economy.”
While cost is recognised as a key driving force powering the ‘Sharing Economy’ delegates also pointed out a series of other ‘lifestyle’ motivations steering new generations to flexible, short-term solutions.
Williams Johnson Mota of B-Hive Living said: “The sharing economy is not only about reducing the burden of cost. We have found that people are making this choice for other reasons including social interaction, to be part of vibrant, international communities. Co-working and co-living spaces for instance attract people from all over the world. The transient nature of the modern working world means people may travel and work for many years before settling down. There is now a population of people who know where they wish to settle down later in life, however they want to work elsewhere perhaps for many years before doing so. They are doing this for life and work experience. These people need flexible living solutions until that time while retaining a sense of community and belonging. While sharing economy has transformed lifestyle options for many people, offering greater choice and flexibility there are still concerns surrounding governance and control. The industry has suffered scandals largely because it is susceptible to issues which do not affect normal business operations. This means there is a constant requirement to review legislation to tighten rules and regulations.”
As Lisbon’s co-living scene continues to boom, delegates agreed that Portugal’s large influx of international expats were making conscious choices to benefit from ‘sharing economy’ services. Many users are making specific ‘lifestyle choices’ based on short-term flexibility, despite having capital to invest in long-term ownership.
The debate was staged shortly after the release of an extensive report from Coliving Insights exploring co-living as an innovative future housing solution. The 72-page study highlighted work involving several delegates. To read more follow the link https://drive.google.com/file/d/1O268kXR_hvT1oUpmvDlQgW02xaVxo30z/view
CoWorkCentral founder Tom Davis said Lisbon’s ‘digital nomad’ scene is showing no sign of slowing down with a thriving start-up scene and expanding tech sector. “Lisbon is adapting rapidly to this changing landscape,” he said. “However, people’s needs and expectations are constantly changing, and the market must respond to that. Digital nomads are continuing to flood in on Schengen Visas for 3 months, briefly leaving and then moving back across. Lisbon is well and truly on the global co-working map and has an excellent reputation for high quality communal workspaces. With added profile from the likes of the annual Web Summit, the market is only likely to expand.”
New enterprise OneSpace – Capsule & Desk was recently set up in Lapa. Investor Helder Hussaine from Capital Holding said the co-work, co-live space was developed due to market demand. “We invest in a broad portfolio of property assets around the world, including Angola, Mozambique and Brazil,” he said. “We were very interested in the Portuguese market but didn’t want to opt for a conventional model. After researching in greater depth and listening to growing demand for co-living and co-working spaces we opened a 62 bedroom ‘Capsule & Desk’ site near the Assembleia da República in Lapa. It’s a vibrant area providing guests with flexibility to live and work on short term contracts.”
BPCC CEO Chris Barton said the debate marked the seventh outing of the BPCC’s ‘think-tank’ series. “The BPCC started these thought-provoking events earlier in 2019 to isolate important topics which affect our members and create space for deep discussion,” he said. “I find it enormously satisfying that we were able to attract such a talented group representing a diverse cross-section of perspectives regarding the ‘Sharing Economy’. As with previous editions we were able to unite large enterprises and key industry players with SMEs and small business owners, in a more intimate environment where they would not ordinarily meet. This creates a fascinating debate where delegates can share their perspectives from across the spectrum. It is also hugely valuable from a networking perspective for our diverse membership base. Due to the positive response we expect to revisit and reassess the ‘sharing economy’ topic again in 2020.”
For more information on the BPCC visit the website www.bpcc.pt phone: (+351) 213 942 020 or Email:
[email protected] New companies which join now will avoid a fee increase coming into effect on 1 January, 2020 and will also benefit from a “free December”.
Text by Sam Pinnington of Pressing PR
On Wednesday, 24th October, another lively ‘think tank’ lunch took place at the Oporto Cricket and Lawn Tennis Club in Porto. Guests from a diverse range of businesses, talent and professions were invited to generate a friendly but meaningful exchange of opinions on the topic of ‘Talent Shortage and Coopetition‘.
Each person had an opportunity to introduce both themselves and their respective professional interest before tucking into the delicious lunch. Business cards were eagerly exchanged and networking exchanges both before and after lunch opened up new possibilities for everyone. Inês Castelo Branco then opened the ensuing discussion with her perspectives on the main topic, and there followed a fascinating debate which led all present not only to contribute their own thoughts, but also to appreciate different points of view, and rethink established ideas.
The success of these meetings lies in part to the variety and mix of invited guests, thus ensuring such a stimulating and animated debate, and a deeper mutual appreciation of the challenges involved in Portugal for entrepreneurs at every level and in all sectors. The lunch was both rewarding and inspiring and much appreciated by all attending.
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Local accommodation — can hotels compete?
According to estimates local accommodation such as AirB&B, guest houses and hostels in Lisbon now account for more than 50% of all tourist bookings in the capital.
In fact houses set aside for local tourist accommodation in the borough of Lisbon which has around 500,000 inhabitants has the capacity to accommodate 102,000 visitors.
The statistics come from Lisbon City Council which also remarks that in March 2019 there were 18,000 local accommodation establishments, a growth of 80% on 2018, a growth trend that has increased on previous years.
But how is this competition affecting the traditional hotel sector in the city and is the mushrooming phenomena of guest houses creating unfair competition or can the two co-exist happily?
This was the question on the table at a debate last week entitled “Hotels v Guest Houses and areas of contention: competitive rivals or complementary alternatives” co-organised by the British-Portuguese Chamber of Commerce (BPCC), the French, Belgian-Luxembourg and German chambers of commerce with panel with Ricardo Amantes (Commercial & Investments Director of Coporgest/Lisbon Best Apartments) Miguel Garcia ( Director of the Tivoli Avenida Liberdade) and moderated by Vítor Norinha, journalist (Megafin).
The first issue raised was if there was a certain tourism phobia in Lisbon with the spectre of the city becoming a tourist Disneyland like Barcelona, Berlin or Venice.
Ricardo Amantes said that while there wasn’t evidence of a phobia towards tourists in Lisbon, tourist numbers had grown exponentially over the past four years and Miguel Garcia pointed to the need for better public transport infrastructure and services to cater for the growing numbers.
“If Lisbon and Porto are not better prepared for this demand and given that we don’t have a second airport up and running yet, the city will need more infrastructure, services and better quality ones.”
“Today we see local accommodation not so much as a competitor but complementary to existing offer and vital for the development of cities like Lisbon and Porto,” Amantes added.
In fact, the Portuguese are well known for being hospitable and having the art of welcoming visitors and being good hosts, a phenomena seen up and down the country.
“I think we are one of the few countries in the world who know how to welcome visitors and make an effort to do so in English. We have room to grow and develop but must do so in a sustainable way” he said.
Crunching the numbers Vítor Norinha said in Lisbon there were 18,000 local accommodation premises but 15% offered a poor service and many of these in area of contention such as the central Lisbon historic neighbourhoods. Local accommodation — and these numbers have been disputed — represent 50% of all tourist accommodation in Lisbon and Porto, others sources say 33% while around 63% of beds in Lisbon are for local accommodation and 37% for hotels. In 2018 there were 56,000 beds in hotels and apart-hotels while in the first half of 2019 there were 25-5 million visitors which means the same amount of tourists as in 2018.
Some 92% of the license holders of local accommodation own between one and three premises which means it is a relatively small business with area of contention representing 20% and relative areas of contention (15%).
Regulations scare of investors
Ricardo Amantes said he was “very critical” of regulations aimed at controlling the number and nature of local accommodation that has been approved but currently awaiting publication and are designed to protect the lifestyle of local residents in historic neighbourhoods and maintain the traditional and authentic character of them.
“It seems to me that the real reason for introducing these regulations is not so much to ‘put the house in order’ but to try and resolve the problem of a lack of affordable housing in Lisbon since reading the memoranda to do with the regulations the aim is to ‘preserve the social reality of the neighbourhoods and residents and safeguard the fundamental rights to housing against the growth of local accommodation and the pressure this demand puts on rising property and rental prices.
“For me there does not exist a direct relationship between local accommodation and a lack of housing in these historic neighbourhoods. If it wasn’t for local accommodation, there would not be a number of buildings that have been done up and local trade and business that has sprung up and we would have continued to witness what we had experienced before 2014 where a large number of these neighbourhoods were run down with buildings that were abandoned or in ruins, a population that was very elderly while local accommodation had already existed anyway.”
Miguel Garcia said he had a “different view” of local accommodation which was that it was complementary. “I agree that it has to be controlled and regulated to preserve local traditions and authenticity. To preserve our history and the elderly with their washing lines hanging from windows really is part of our culture and history.”
“If you are a tourist and see hoards of tourists in the traditional neighbourhoods you completely lose the effect of the authenticity of these “bairros” and local accommodation must result in creating a genuine experience in the location, avoiding situations that have happened in Greece and Italy” he said adding that Lisbon rank the risk of approaching a Disneyland situation.
It was also pointed out that investors had bought up property to turn into hotels or guest houses and were now, because of the regulations, left with either potential white elephants on their hands or were facing restrictions making it difficult to have a good return on their investments. “These government rules have been passed regardless of the current investments underway” he said adding that so far the Government had not given a positive reply to concerns over investments already earmarked in Lisbon.
“From the point of view of overseas investors who have and want to invest in Portugal it sends out a bad sign that investors cannot trust the government because it chops and changes the rules,” he said.
Hotels v Local Accommodation
So, with local accommodation already overtaking Lisbon’s hotels on mid-price average stays (city-breaks), can the hotel sector compete and coexist with the more affordable competition that is attracting so many younger people to stay in the city?
It largely depends on the type of trade you are looking at. According to the Lisbon Tivoli boss, if I’m looking at the Tivoli Avenida (five-star) we perhaps have competition from the first stay tourists make in the city. What I call curiosity visitors,” he said.
“But for people that want services, history, brand and class then the expectation is completely different for a certain type of traveller that wouldn’t be expecting the same in local accommodation,” he added.
“But it we look at our three and four-star hotels, then I would agree that we have a greater competition.”
The answer could be to become better and more competitive at three and four-star level, strengthen its core business which in hotels means service whole local accommodation has a lot of growth to do in these areas.
Some bed and breakfast guest houses that are members of city hosting platforms can so offer some services but the kind of tourists that book into local accommodation are not the same kind of visitors who want to stay in hotels.
“I think there is room for both, but we at Tivoli in terms of mid-price strategy believe that local accommodation could become a competitor since value-for-money is very important and more so than the classification of three or four star classifications,” said Miguel Garcia.
“I think one way or another local accommodation will need become more self-demanding to become competitive and many in the hotel sector so see this as a big threat that we have to battle against, but today I see it has a complement to existing offer,” he said.
The overall conclusion was that there was a percentage of local accommodation providers offering bad or limited services and or conditions currently in the market while it was likely that within the sector itself there would be fierce and growing competition reflected by some local accommodation providers upping their game in terms of conditions and services offered, putting them effectively on a par with small residential hotels.