Portugal’s tourism industry suffers because of coronavirus

Tourism industry contributed around 15% to country’s gross domestic product in 2018

Lisbon city, Portugal.  The country's once-booming tourism sector collapsed in April due to coronavirus pandemic. Getty Images

Portugal's tourism sector collapsed in April, as lockdowns to contain the spread of the coronavirus grounded flights and kept visitors from Britain, the country's largest market, away.

The National Statistics Institute (INE) said in its flash estimate on Friday the number of overnight stays by foreign tourists in Portugal dropped 98.3 per cent to nearly 71,000 last month from the previous year.

The number of overnight stays by Britons fell 99.3 per cent in April compared to the same period in 2019, followed by a drop in the German and Spanish markets, decreasing 98.9 per cent and 98.1 per cent respectively.

Portugal, which has so far recorded 31,596 confirmed Covid-19 cases and 1,369 deaths, is slowly easing restrictions in place since it locked down in mid-March. Most stores and restaurants have reopened.

Although the country's borders never fully shut to European nations, with the exception of its land border with hard-hit neighbouring Spain, most hotels decided to close as there were limited flights and no customers.

Foreign Minister Augusto Santos Silva said on Friday Portugal's doors were open to tourists.

Last month, about 80.6 per cent of tourist accommodation establishments, from small hotels to resorts, were shut, INE said, adding that around 78 per cent reported cancellations of bookings scheduled for between March and August this year.

In 2019, more than 16 million foreign tourists visited Portugal, almost 20 per cent of them from Britain.

Portugal and Britain are in talks to try and secure an air corridor for tourists that would allow British visitors to avoid a Covid-19 quarantine upon returning home.

The tourism industry contributed around 15 per cent to gross domestic product in 2018, according to official data.

Unemployment in the Algarve region more than doubled in April compared with the same month last year as the lockdown wiped out seasonal jobs.

The International Monetary Fund expected the economy to contract by 8 per cent this year, higher than the European Commission's predictions of a 6.8 per cent drop.

Also on Friday, INE said output shrank 2.3 per cent in the first quarter of 2020 from a year earlier.