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Hotel groups engage in Local Lodging

When considering Local Lodging – homeowners letting to holidaymakers – the “peer-to-peer” model springs to mind. However, there is a parallel “Local Lodging” economy, one that mimics the traditional tourist mould far more closely that one might expect. From the Algarve to Aveiro, there are seven major hotel groups that, in addition to their conventional hotel resorts, are engaged in “Local Lodging”, taking advantage of the simplified rules available under Local Lodging. In all, these major economic groups have more than 350 “AL” apartments in the tourist market.

Pestana, Tivoli, Altis, Luna Hotels, Visabeira Turismo, Sonae Hotels, Martinhal have opted to expand beyond standard resorts into an additional segment within the tourist sector: Local Lodging. From north to south, these conglomerates have registered hundreds accommodations with the National Registry of Local Lodging (RNAL).

Sonae Hotels has the largest number of these registrations. The hotel concern operates Troia Resort in Troia, where it has 75 villas and apartments. Next is Luna Hotels, with 72 accommodations in the tourist village, Alvor Ténis Clube, in the Algarve. The Pestana Group runs 46 units in the Carvoeiro Golf Resort. Tivoli (now owned by the Thai group Minor) through Marinoteis, operates 32 apartments in Vilamoura. The Martinhal group has 41 apartments and villas in a resort in Vila do Bispo. To the north, Ifervisa, part of Visabeira Turismo, lets out 60 AL apartments in Aveiro. Finally, the Altis Group, through Altis Suites, has 33 Local Lodging units in a single building on Rua Castilho in downtown Lisbon. His trend continues to grow.

Coincidentally, all these groups have at least one associate hotel in the Association of Hospitality of Portugal (AHP) – the same entity that, in 2014, presented for the first time the proposal for those who want to practice Local Lodging within a condominium to be subject to the approval of other owners. A similar proposal has been presented recently by the Socialist Party (PS), which has already handed over a draft to the Assembly of the Republic. Considering that the Local Lodgings units that these hotel groups manage are concentrated either in the same building or in a tourist resort, their owners are free from any condominium authorisation.

80 owners have 10% of all registered Local Lodging units

The vast majority of those who operate Local Lodging businesses are still small proprietors. A recent study by the Faculties of Economics and Law at the Universidade Nova de Lisboa shows that approximately 80% of the owners have only one officially registered “AL” unit, thus following the traditional “peer-to-peer” economic model. But the number of multiple property owners is on the rise in recent years. A survey on the RNAL portal shows that there are at least 81 owners with 30 or more registered properties. Altogether, these owners manage 4,470 units, the equivalent of 10% of the total number of Local Lodging establishments registered in Portugal: 45,900 as of July 2017.

Among these, there are nine that have more than 100 registered properties. These are mainly in the Algarve area, in resorts or tourist villages. But multi-property owners are steadily increasing in Lisbon and Oporto where the number of investment funds in this segment continues to expand.

CDS wants to distinguish between individual and multiple Local Lodging operators

In Lisbon, a recent study found that 60% of individual owners derive their primary source of family income from their Local Lodging activity. The centrist party has presented a draft resolution to the legislature, recommending that the Government distinguish between occasional and permanent provision of AL services. This suggested distinction preserves the notion of periodic operation using one’s principal residence and / or a secondary residence. Under the proposal, the total number of properties under management should not exceed two. In essence, the principle is to distinguish peer-to-peer harnessing of otherwise inactive excess from the exercise of a full blown commercial activity.

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August 2017
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