Bars and restaurants across the Algarve are lowering their prices to attract clients and avoid closure, with many businesses fearing a weak summer season due to the current economic crisis.
The increase of VAT in the catering sector and the moderation of consumers’ habits are the greatest enemies of many businesses in the region that are trying to win back clients with lower prices and promotions.
In Loulé’s parish of Almancil, one of the parishes with the greatest number of restaurants in the country, some cheaper establishments have already closed, while others continue to struggle on, according to the President of the local business association, Gilberto Sousa.
“Various establishments will have to close, especially the cheaper ones, because even by lowering their prices they cannot resolve the problem,” he said, adding though that higher class restaurants “don’t have that problem.”
Meanwhile, the President of the Association for Hotels and Similar Industries in the Algarve (AIHSA), Daniel do Adro, criticises the move to lower prices as he considers this will only “delay the problem.”
“When they start selling at cost price, if they don’t close today, they will close in three or four months time. Lowering prices only works for people who have a very high profit margin,” he said.
Although confident tourists will still come to the Algarve this year, the President of the regional tourist board Turismo do Algarve highlights that the Portuguese especially will be making savings, staying less days and spending less.
“They will go less often to the restaurant, or they will order two soups and a main course between two, they will take lighter meals to their hotel rooms, but they will still come because people need to rest after a year’s work,” said António Pina.
According to the Vice-President of the Association for Discos in the South, Custódio Guerreiro, the Algarve’s discos and night clubs will also suffer with the crisis, with some readjusting their drinks prices to compensate.
He also criticised the temporary discos that exploit the best that the summer has to offer, causing serious consequences to year round local establishments that have had to lay-off staff.
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