Tourism in Decline: Algarve Faces Significant Drop in Overnight Stays

Decline in Tourist Accommodation

The tourist accommodation sector continues to show signs of decline. After starting the year with a rise in the number of overnight stays, February and March experienced a slowdown. In March, Portugal recorded 2.3 million guests and 5.6 million overnight stays, reflecting a year-on-year change of -0.1% and -3%, respectively. Overall, the sector generated revenues of €406.9 million.

Impact of External Markets

According to data released by the National Institute of Statistics (INE) this Wednesday, external markets were the main contributors to this decline. The number of overnight stays from residents increased by 2.4% compared to March last year, reaching 1.7 million, but this was not enough to offset the 5.2% drop in non-resident overnight stays.

The INE explains that these results were influenced by the mobile structure of the calendar. This year, the holiday period associated with Easter occurred in April, whereas in 2024, it will mainly take place in March. However, March benefited from the Carnival holiday, which did not occur last year.

Leading Source Markets

The ranking of the main source markets remained unchanged, with the top 10 countries accounting for nearly 74% of total non-resident overnight stays. In March, the British market maintained its lead, despite a 4.6% decrease. Following the UK are Germany (-7.5%) and the USA, which defied the downward trend of the major markets by recording a 0.5% increase.

However, the Polish market saw the largest jump, with non-resident overnight stays from Poland soaring by 35.9%. In contrast, overnight stays from the Spanish market experienced the most significant decline, dropping by 37% compared to the same month last year.

Regional Variations

Internally, regions displayed varying trends in overnight stays. The Azores (6%) and Setúbal Peninsula (3.6%) saw the highest increases. Conversely, the Algarve recorded the largest decrease in overnight stays, with a decline of 8.7%, followed by the Oeste and Vale do Tejo (-5.2%).

The Algarve's tourism sector was primarily affected by a drop in demand from the domestic market, with overnight stays from residents in the region falling by 16% in March. Similar declines were observed in the Oeste, Vale do Tejo, and Alentejo (-1.0% in both).