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Yearly Archives: 2018
An increasing number of accommodations under Local Lodging (“AL”) are in the hands of third-party administration. In Lisbon and Porto, only 4 out of every 10 units registered in this tourist activity are handled directly by the owner.
Portugal received 128,000 fewer foreign visitors this summer than in the same period last year, a drop largely due to fewer holidaymakers from the United Kingdom. Between June and September, 5.5 million travellers came to Portugal, down 2.2% when compared to the same period in 2017. However, revenues rose to 1.7 billion euros during the period, up 4.4%.
The ink is barely dry on changes to the Local Lodging regime and the ruling Socialist Party is moving forward with proposed amendments in the next year’s State Budget. According to the contemplated update, Local Lodging units should have a minimum coverage of €75,000 a year per claim. The recently approved legislation is vague concerning the amount of liability insurance required.
Despite positive evolution in recent years, Lisbon still has many buildings that are either abandoned, poorly maintained or even in ruins. According to data from the Lisbon Chamber of Commerce in 2018, there are 2,626 buildings in the city declared totally or partially vacant and 7,230 in poor condition, concentrated in the city’s historic neighbourhoods. Experts speak of the need for €4 billion in urgent rehabilitation works in the capital and over €24 billion nationwide.
In Portugal, there are ±1.1 million second residences, according to National Statistics Institute data, comprising 80% of “AL” offerings. These dwellings have a low utilisation rate: less than 30 days a year. When engaged in Local Lodging, the average yield per owner is €11,000 euros. Lisbon and Porto tell a different story. In these two urban areas, “AL” is driven primarily by investment properties, not second residences, and foreign buyers.
DECO warns that the new rules for Local Lodging require owners to have an insurance that is not currently available in Portugal. According to the Portuguese Consumer Protection Association, “there is no multi-risk liability insurance, which shows a serious ignorance on the part of lawmakers.” “In addition, the law is not clear about any damages to be covered.”
The average cost of Local Lodging in Porto approached the values registered in Lisbon – approximately €100 euros per night – according to recent data calculated and released by Confidencial Imobiliário. In 2017, there was a 30% gap between the 2 cities. According to the index, the highest average daily rate was recorded in Lisbon in the Chiado-Bairro Alto district (€138).
Lisbon will increase the Municipal Tourist Tax in 2019, from one to two euros per night, to strengthen urban cleaning and transportation in neighbourhoods with more pressure from tourism. Initially approved in 2014, the Municipal Tourist Tax began to be applied in January 2016 on the overnight stays in the hotel units or local accommodation, then set at one euro per night up to a maximum of seven euros.