The journey of Portuguese tourism during the hardest days of Covid restrictions

by Yunjung Shim and Catalina Pérez

Less than a month since the Portuguese government allowed the entrance of UK tourists with Covid-19 negative results, the British government took it out of the green list of safe countries to visit. Asked before England closed the door to Portugal, owners and workers of tourism-related businesses tell their struggles due to the lack of tourists, and their now, uncertain hopes.

Even if it was not long-lasting, the reopening to the UK offered a short breath for the tourism entrepreneurs of the Metropolitan Area of Lisbon, pressured by debts and low rates of revenues due to the lack of foreign visitors since the start of the travel restrictions in March of 2020.

The British decision comes as a hard beat for an already affected tourism industry. Because of the drop of foreign tourists, the revenues of the sector decreased by 66% in 2020 according to the National Statistics Institute (INE) of Portugal: The large sector is not able to survive only with local visitors.

Hyejin Kim, tour guide of ‘Atlantic Trip’, a travel agency targeted to Korean, said: “When it was successful, we earned, just for the two of us, more than 10,000 euro in one month. But now? Zero”.

As a tourist, she started to fall in love with Portugal, Lisbon’s tranquility, the feeling of being in a sunny small country village. After Hyejin decided to stay in this country, she started to look for a job. That is when Kim discovered Myrealtrip, a tourist and tour guide matching platform, in which she worked doing tours of 10 hours by public transport and walking.

After obtaining experience, she realized that it was difficult to make tours to the nearby towns of Lisbon in public transport. Was then when with her present husband, Miguel Ramos, the host of her Airbnb with whom she fell in love, started Atlantic Trip, a travel agency.

The couple was introduced in a Korean TV program called “Love is not for everyone”, customers who recognize them had the tours with them, helping their business grow. They were preparing to expand their size, their business was about to enjoy the delight of rising influence. Then Hyejin said, “And after that Covid came. So, yeah, it was the highest point.”

On 19 March of 2020, the state of emergency began in Portugal. All nonessential shops were closed, and only flights from the US, Canada, UK, and Portuguese-speaking countries were allowed to enter the country.

The state of emergency lasted until May of that year, but people from Korea couldn’t enter the country because of strengthened Portugal’s entrance condition. During January of 2021, the country began a new period of emergency, after reaching the worst rate of increase of infections in the world. That ended on the 30 of April when the president revoked the state. This is why they’ve never been able to go back to work.

For Hyejin and Miguel, Covid-19 snatched away all their customers and schedules. Now they are just imagining those beautiful places they guided. “I really wonder what happened to Sintra. They were living off the tourists. I’ve never been there since the pandemic hit me”, said Hyejin Kim.

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“The problem with the pandemic is that there are a lot of businesses owned by families. The mom, the son, the granddaughter, they all work in the same business. So when the business is bad, the whole family is in trouble”, said Joana. 

For a while, the Association had worked to advertise the town as a holiday destination on their own, and not just a one-day trip from Lisbon. To achieve this goal, they opened more hotels, created distribution channels of goods and services for restaurants and hotels, and promoted their different touristic landmarks to extend the visit of the tourist in the city. That was until the pandemic started.

In April of 2020, Portugal suffered a reduction of 97.4% of overnight stays, and Sintra was affected. According to the latest data available in the city municipality, the pandemic closed almost a hundred rooms.

Hotel Nova Sintra is a family business run by the fourth generation, Rui Bernardo: “In 2020, I had an occupation of less than 4%. I had two rooms last weekend, my first in five months. Covid is really bad for us”. The lack of tourists staying overnight hit the occupancy rates of different accommodations. “Our customers do not meet each other. And nevertheless we had a drop down over 95%. Since March last year, we started receiving cancellation and postponements” expressed Irene Figueiredo, owner of Sintra Houses, private villas to accommodate groups and families.

All the staff of the accommodations received training to learn how to sanitize their places and get the “Clean and Safe” stamp. However, the owners agree that the main factor for having reservations was not the safety Covid measures: It was having a swimming pool.

“I had a very reasonable summer, not in any way as good as normal. Usually, 90% of my clients are foreign, and 10% are Portuguese. And last year, I was 45% Portuguese and 55% foreign”, explained Virpi Makela, owner of Casa do Valle, a Bed & Breakfast with an outdoor swimming pool. The increase of local tourists interested by the pool and the nature surrounding helped her to recover from the loss of foreign tourists, Yoga, and Hiking groups. Other businesses didn’t have the same luck.

“It was a complete disaster. Portuguese don’t come to drive these cars, we need foreign tourists. We have a decrease in our turnover of more than 97%”, expressed Sónia Costa, owner of Las Tours Sintra, a rental car that lends small electric yellow cars, perfect for the narrow street of the historic center.

The enotourism of Casal Sta. María vineyards were also affected by the lack of foreign tourists. João Costa, a worker of the vineyard, said that even when they were able to open again, they had no reservation for wine tasting for three months: “How do we deal with that at first? Well, we actually felt a growth in e-commerce. When the pandemic started, everyone was ordering online”.

Without having an e-commerce option, other businesses suffered a strong decrease in their revenues. Ana Pombal is the owner of Morango Saloio, a souvenir shop near the historical Town Hall: “Is funny but not funny really. (After the reopening in 2020) I work almost all the months for some hours per day. I had an income of 18 euros during April of 2020”, said demonstrating the struggle to cover the costs of rent during the last holiday seasons.

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The same problem suffered Luis Santos, owner of Incomun Restaurant. Before the pandemic, he was also the owner of a wine seller closed due to the lack of foreign visitors. “Because usually, it was the tourist that came to the store to have a glass of wine at the end of the day. I don’t have that income anymore because I don’t have the tourists and it is not viable”, expressed the chef.

For more than five months during 2020, he was just functioning with take-outs and deliveries: “I was just doing the meal. But when people come to the restaurant, they don’t just order the meal, they ask for the coffee, dessert, and drink. So the income is not the same”.

The Association works very closely. Luis recommended hotels to tourists, the hotels recommended Luis, Luis bought the wine from Casal Sta. María and all of them recommend activities like enotourism, museums, and tours. With the lack of tourists, the created net to make Sintra a holiday destination crumbles. “We help each other when we have a business. But if we don’t, any of us, it’s a train wreck. Everyone is dependent”, described Joana, president of ATS.

“I got on Facebook and Instagram once a week and I was doing live hiking. So I started doing little films. Because I was not busy at work. So I made myself busy with something that I could use for marketing”, explained Virpi, owner of Sintra Houses. 

The economical challenges and the uncertainty of Covid restrictions do not improve the scenario. Sónia Costas from Las Tours Cars concluded: “I am a very positive person (laughs). I don’t think of debts. One day at a time. Step by step”. 

Work or not

From 22 employees, now Luis is working with 14. To eight among them, their contracts were not renewed. “I am very connected to the staff. I have people who started with me when I opened the restaurant. I was affected because I know the families and their incomes are not going to be the same. But there is nothing that I can do, it depends on the arrival of the tourists”, expressed the chef.

Rui Bernardo, the owner of Hotel Nova Sintra, also wasn’t able to maintain his seven workers. The facilities are now only maintained by Rui and his last worker.

“It’s not easy to understand when I need to hire more workers. We aren’t that many, and we receive few bookings, but we don’t know if they are going to come because the reservations are not guaranteed.”, explained a frustrated Rui: “I have a reservation that has been changed since March of 2020”.

During August, the rate of unemployment in Portugal was 8.1%. Compared to the same period in 2019, before Covid, 85.300 more people were unemployed. 

In Casal Sta. María decided not to let everyone go. So areas like tourism, management, and sales had to reinvent themselves. “We went to the warehouse, so we started to work in the production areas of the vineyards. And even now, when they said tourism is reactivated in Portugal, we are still helping”, explained João Costas, staff of the tourism area. 

In 2020, the Metropolitan area of Lisbon reached an unemployment rate of 7,7%. Over the national average of 6.8%.

Hyejin needed to search for a solution. After observing how much the Portuguese enjoy the Californian style of Sushi, she started to cook Kimbap, a Korean dish similar in shape to Japanese Sushi with different ingredients. “Friends of Miguel trust him and buy the food. They liked it a lot and they made a posting about this. After that, I started to sell more until May, because then the restaurant started to open and now people just want to go out”, said the tour guide.

The average unemployment during 2020 in Portugal (6.8%) was below what the government expected (over 8%), but 0.3% higher than in 2019. To avoid the massive loss of jobs, the government put in motion different programs to help employers and employees to keep them. However, not all policies function very smoothly.

Not enough

In March 2020, the EU Commission approved an emergency fund to the Portuguese government to support enterprises in affected sectors like tourism. By using this financial support and their fiscal arcs, Portugal proceeded to give aid like tax advantages, facilities to obtain loans, and employment-related measures. In February 2021, given the severe damage in the tourism sector, the government discussed with the banks to extend their loan repayment period. “We need some time to run to start to pay because we want to pay, but the thing is to get tourists because the support given to tourism was not enough for my house”, indicated Rui Bernardo, manager of his family hotel.

To avoid the loss of jobs, Portugal supported financially the owners of companies to prevent them from firing their employees. The policy seems to help the workers but overlooked the “boss”. In particular, owners in the tourism industry have hardly got profit from their business. Even though they can give the wage to their staff, they are pushed into a situation where they need to find their own way to survive.

“The government has never paid me. But Hyejin (employee and wife) got 50 euros multiple times. They tried to help the employees, but not the owner. She could get money as she is the manager of our tour agency”, Miguel revealed, the owner of Atlantic Trips tour agency.

Luis Santos, of Incomum Restaurant in Sintra, wasn’t an exception from the financial crisis and he had no choice but to ask for support from the government, which still doesn’t get. “The aid should be quicker. I asked for help to pay the rent in February and I still haven’t received it (May 2021). I had to spend my savings to keep the restaurant open, I was lucky to have this sound finance”.

To improve the occupancy rate in hotels, the government promoted having customers in the medical sector who are closely working with Covid patients and are afraid to infect their homes. The number of hotels that showed interest in the program was high, however, the supply was more than the demand for rooms. In the end, the hotels got few customers, and the profits didn’t always cover the cost of receiving them. “If they pay you eight euros a day, it doesn’t cover the costs of heating the whole house, doing the laundry, serving them breakfast or electricity, and also the cleaning afterward. It is a heavy cleaning”, explained Virpi Makela, owner of Casa do Valle, as a reason not to join the program. Other accommodations like Nova Sintra, didn’t want to put at risk the safety of their customer and family.

For many, the help was not enough. Sónia Costa, from Las tours, and her staff stayed at home for three months but when they opened it again, she made the employer work only for two of the original eight hours per day. It was an unavoidable choice to support the employer in her financial situation. “The support of the government was not enough”, declared Costa.

Hyejin, the tour guide in Lisbon, said that, at some points, she needed to make a decision between paying fixed costs to maintain her business or use the money for themselves to survive. Portugal needs to be in a hurry to water the bloomed flowers in tourism during the past golden ages before all tourism industries are dead during a long spell of dry weather.

What’s next

This long-lasting Covid situation gave a very different meaning of turning point to the people. 

Sónia Costas, of Las Tours Sintra, spent the lockdown period rebuilding their stores, so staff and guests were safe with the return of tourists. However, the fear of the spread of Covid-19 with the new tourists remains: “Portuguese people have a mentality very different from the tourists. They are concerned about receiving so many”, explained Costa.

Even if the vaccination rate is rising all over the world, they are still defining the future as “uncertain territory”.  As if to prove this belief, the UK government announced the removal of Portugal from the safe country list. The UK is one of the main countries where Portugal’s tourists came from. After Portugal became a safe country on May 17, the rise of reservation gave hope to a beaten industry.

The situation is not only forcing a pause, but also it made workers and owners in the tourism sector pushed out of the market.

“Last year, we thought it’s too early to give it all up. However, if we can’t make any hope even in this summer, we likely need to go to the countryside”, Hyejin and Miguel from an Atlantic Trip concluded. 

Even if it’s a faint hope, Portugal’s tourism industry seems to look for a solution from its nature and open site according to Virgínia Margo, tourism technician in ecoTours Portugal travel agency. More and more clients have asked them alternative places like rural regions, places known for being more empty of people and where to enjoy nature. She suggested Geres, Azores, or Alentejo which were still popular compared to the other regions even during the Covid. 

“You have to learn to live with a situation”; as Virpi Makela, the owner of Casa do Valle, mentioned, the Portuguese were not waiting for the end of Covid. They are learning and ready for what is coming.