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The outbreak threatens 600,000 jobs in Portugal's tourism industry and 26% of its GDP

Date:2021-07-06

The report estimates Portugal could lose 60 billion euros in GDP between 2020 and 2023.

Globally, it is estimated that "Portugal could lose 60 billion euros of GDP(equivalent to 26 percent of 2019 GDP level) between 2020 and 2023," according to a report by consulting firm McKinsey on Portugal's tourism industry, according to a comprehensive report by Gazelle Portuguese. The report considers both direct and indirect evoked effects.

"In addition, up to 600,000 jobs could be lost in the sector at the peak of the crisis, some of which may not be recovered in the future," the report said.

The study highlighted the importance of tourism to the Portuguese economy, accounting for 18.6 per cent of total employment in the country and more than 20 per cent of local jobs in places such as the Algarve, Madeira and the Azores.

The consultancy also highlighted the impact of the tourism crisis on other sectors of the economy "which depend on tourism for their livelihoods, such as shopping centres, restaurants and retailers". The report predicts that Portugal's domestic tourism industry may not return to pre-pandemic levels until 2023, and that international tourism, which is about four times the size of domestic tourism, will return to pre-pandemic levels by 2024.

"While unable to predict when the industry may be showing signs of recovery, but the industry participants may take many measures", the report said, and pointed out the "faster and more sustainable recovery" three priorities: through the cooperative mode of the digital and industry and tourism industry for the future "to create a new paradigm" to improve the competitiveness of the company.

McKinsey analysis showed that the activities of tourism, conference, exhibition, etc.), the group Tours, cruises, individual tourism and urban tourism will be affected by the pandemic, the biggest need longer time to recover, on the other hand, domestic tourism, ecological tourism and religious, sports and cultural tourism is less affected, is expected to recover faster.

Finally, the report identifies five key factors that will determine the speed of a country's tourism recovery: the attractiveness of major destinations, air capacity, the capacity and quality of health care, the proportion of business travel, and the importance of sustainability.