NERA alerts Algarvian businessmen to the «worrying evolution» of Brexit

NERA advises entrepreneurs in the Algarve to "prepare for a more complex picture"

The NERA-Business Association of the Algarve Region alerted Algarve businesspeople to the need to prepare for Brexit, «a process that will hardly go back, which already presents negative signs and threatens a worrying evolution».

In a text signed by Vítor Neto, president of the association, NERA considered that entrepreneurs in the Algarve «should try to know better what is going on, become aware of the risks and prepare for a more complex scenario».

To help them, the association analyzed what Brexit could mean for the Algarve, assuming that this is an irreversible process, «whether with a good, bad or poor agreement», that the one who will pay the highest price is the United Kingdom, the main source of tourists for the region, and that whoever has economic relations with the United Kingdom, as is the case with the Algarve, will have “to face the inevitable consequences of the new British economic framework”.

To justify these fears, NERA comes forward with some data. Firstly, the fact that the United Kingdom is the 1st tourist customer in Portugal, with 24% of overnight stays (9,3 million) and 18% of external tourism revenue (2.600 billion euros). Looking at the Algarve «the biggest destination for British tourists in Portugal, the influence of the United Kingdom is even more evident: 66% of overnight stays (6 million) are guaranteed by Britons and 50% of passengers at the Airport Faro come from the UK.

A possible decrease in the number of British tourists in the Algarve would lead to a “decrease in external revenues, which would weaken the contribution to the balance of trade that depends mainly on Tourism, the country's largest export sector (15 billion of euros in 2017).

A "decrease in consumption of goods and services in general, and not only those more directly linked to the tourism offer, can also be expected, resulting in a drop in regional and national production, from various sectors and regions of the country", as well as a " decrease in the contribution to GDP, investment and employment'.

«Portugal – and the Algarve – cannot accommodate a possible drop in British tourists and think that «other markets» can replace them. It would be a huge mistake. It is clear that we must always seek to attract new tourists and other markets. But we must not forget that the British market is structuring and irreplaceable. We must act to mitigate any breaks, to consolidate positions and grow», urges NERA, in the text signed by Vítor Neto.

Faced with this scenario, the association defends that entrepreneurs must react “with serenity and intelligence” and must seek to “understand the situation, define responses and priorities, develop actions”.

“Clarifying business and public opinion about Brexit and what is at stake”, teamwork between public and private entities in the tourism sector, “strengthening relations with British tourism players – operators, airlines, agencies, online platforms , etc." and “adapt the tourism offer and commercial policy to the new competitive framework” are some of the suggestions made by NERA to businessmen, in order to mitigate the negative consequences of Brexit.