Mar. 30, 2022


Luís Araújo

Portugal

Luís Araújo

President, Portuguese National Tourism Authority

TBY talks to Luís Araújo, President of the Portuguese National Tourism Authority, about the effects of the pandemic, the lifting of restrictions, and goals for 2022.

BIO

Luís Araújo is President of Turismo de Portugal (Portuguese National Tourism Authority) since February 2016. He is also President of ETC – European Travel Commission since September 2020 and President of NEST – Tourism Innovation Center in Portugal. He has a degree in Law. He is a Board Member at Group Pestana responsible for the Hispanic America hotels operations of Argentina, Venezuela, Colombia, and Cuba. He was also Head of Development for the same continent and Head of Sustainability since the creation of the department in 2009. From 2001 to 2005 he worked for the Brazilian branch of the company where he was successively Board’s Associate for New Projects in Brazil, Board Member and Vice President for the Group Pestana in South America, with responsibility for New Business Development and Area Operations. He served the Portuguese Government as Head of the Cabinet of the Portuguese Secretary of State for Tourism between 2005 and 2007.


How did the pandemic affect the performance of the tourism sector?
The performance of the sector was the most visible part of the business that was affected. For example, in terms of KPIs, we went back 25 years in terms of overnight stays and 10 years in terms of revenues. This was significant, especially because 2019 was our best year with a record 27 million guests. In 2019, the diversification of markets was the biggest it had ever been, and we saw the lowest seasonality ever in Portugal. We also saw the highest amount of revenue in tourism in Portugal—EUR18 billion a year. We grew more than 60% from 2015 to 2019 in terms of revenue. The sector also saw highest numbers of enterprises, start-ups, and people working for the sector. The impact of COVID-19 on the first year was massive. 2020 was a terrible year for the sector, and in 2021 we decided that the purpose of our activity and our mission was to support enterprises, especially SMEs. We handed out more than EUR2.7 billion over two years to about 60,000 enterprises that needed this financial assistance to survive. The biggest lesson was how to survive without business. The second part was seeing how many of the decisions that were taken, nationally and internationally, were not taken based on facts, but on fear, and this was difficult. In early 2021, we launched a plan to reactivate tourism with the goal of reaching 50% of 2019’s revenues in 2021 and matching 2019’s figures by 2023, and we succeeded in reaching 2021’s target.

As the majority of travel bans and restriction have been lifted, what are the key markets returning to Portugal?


During the pandemic, our focus was mainly domestic markets, which comprised the biggest group in 2020 and 2021. The second-biggest markets were the ones closer to us—Spain and France—as well as the ones that knew Portugal better such as the UK, Germany, Italy, western Europe, Brazilians, and North Americans. We now see great demand within Europe, as well as North and South America, while Canada, North America, and Brazil are seeing the biggest boom in terms of demand. The ones that we expect to take longer to recover are the Asian markets, though we are seeing excellent indicators this year. In addition, investors are also coming back, especially from the US. Brazil remains a constant, and we are seeing great interest from North America and Canada, as well as the Middle East. This is the result of several things, mostly due to improved connectivity as well as more opportunities in other sectors. Tourism is always the main gateway, be it for the golden visa, investment purpose, or a second home.

How are operators capitalizing on the concepts of innovation and digitalization to boost the performance of the industry?

We have seen a great evolution in these two years, mostly in terms of communication and CRM, among companies. The biggest problem right now is getting SMEs and micro enterprises to understand that technology and digital are not just about communication or marketing, but about efficiency, productivity, and how you focus your business. For too long, the tourism industry focused on product and service. In May 2020, we launched a plan called Reactivate Tourism, Build the Future, which has four pillars. One of the pillars, Building the Future, is focused on sustainability and digitalization. The training that we provide—we focused mostly on online training and trained over 100,000 people just last year—focuses on these two areas. It is important to do the transition, though you can only succeed if you push and reward enterprises by doing that.

One of the biggest challenges for the sector is the loss of human capital. How are you working to reverse this trend?

That is our biggest problem right now. During the pandemic, we lost between 60,000-80,000 people working in the sector. Many of them went to other sectors, worked for other companies, migrated, or stopped working. To restore the number of people, we have to work in three areas. Two of them we can actively work on, one of which is migration. There are agreements being formed between Portugal and India, to encourage people work in Portugal, which will at the same time bring some new blood to the country. Training is the second area that we are supporting heavily. We need people to be more qualified to work in the sector, because that is also a way to increase the value of people in the sector. Training is fundamental—we have 12 tourism schools doing a great job in that—though there is then a third part that depends more on enterprises than the public sector: making the sector attractive. It has to do with salaries, careers, and long-term perspectives.


What are your key targets and goals for this year?

Our biggest targets are for next year: we want to return to 2019’s figures by 2023. in 2022, we are looking at 75-80% of what we saw in 2019. To reach that target, we have to rely on better connectivity because 70% of our guests come from abroad. We are seeing positive numbers and great interest from many other companies in Portugal. The second has to do with diversifying markets. The Americas are extremely important, and not just Brazil but South America as well. The Middle East is also important, as is Asia. We opened a delegation in Japan in 2020, and Japan and South Korea will be extremely important to us, regardless of the connectivity. The third thing has to do with the image of Portugal and the products we have to sell. This is the biggest challenge, as it has to do with how to coordinate everything.

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