Algarve: golf in grave crises

22 March 2021



The pandemic is severely plaguing tourism, golf and the economy of the Algarve, with coursess struggling to survive, unemployment and other investments (hotels, restaurants), which depend heavily on golf during the low season of summer activities are at risk of closing for months or indefinitely.

The best golf tourism destination in Europe and the world for several years, the one that Scandinavians called a “golf paradise” a few years ago and which supports hundreds of families, is going through a serious crisis, the worst since that first course in the Algarve was built more than fifty years ago.

The Algarve is Portugal's main tourist destination in the summer, with beaches considered to be among the best in Europe, and in the fall / winter / spring with golf. The region, considered for several years as the “Best Golf Destination” in Europe and the World, has 40 golf courses, an industry responsible for about 16,800 jobs, directly and indirectly. In the last 12 months, these courses had almost no revenue, keeping expenses for personnel and maintenance to a minimum.

After the recovery failed in the autumn, it was expected that in the first months of 2021 the pandemic of that truce, allowing the recovery, even if slow, to begin in the spring with the arrival of foreign tourists. On the contrary, the health situation worsened in late 2020 and the first month of 2021 and the outlook worsened. The decision to close golf courses across the country, in the context of confinement, further aggravated the situation.

“The moment in the Algarve, particularly in the golf industry, is very serious. After a year of health crisis we still cannot see its end, which generates enormous uncertainty, putting companies under great pressure. We are in the second lock down, with closed borders, without tourists and this is the worst scenario for an industry such as tourism and golf. The drop in revenue in 2020 reached 80 percent and everything indicates that this year will not be better, on the contrary ,” said João Paulo Sousa, director of the Association of Golf Managers of Portugal and general director of Benamor Golf, stressing that “if the vaccination plan is not implemented more quickly and efficiently, there are no signs of recovery or recovery in tourism.”

“I see this situation with great apprehension, because all the time goals for the restart of the tourist flow have never been achieved and have been constantly postponed. And this early 2021 has been anything but reassuring,” said Carlos Ferreira, CEO of Tee Times Agency, one of the main golf operators in Portugal and who also works with Spanish courses.

In 2019, the Algarve courses recorded 1.3 million rounds and in 2020 the occupation (still without numbers) was based on the members of each course, not providing many daily recipes to the courses “and the year 2021 will be dramatic.”

“It would be imprudent to mention some estimated loss value, since we have no tourists and that 90 percent of golfers who visit us are foreigners and that these represent between 75 to 80 percent of the revenues generated by golf courses in the Algarve. That is why we can perceive the impact that this pandemic is having on companies and industry,” added João Paulo.

Without tourists, most of the courses in the Algarve "survive" with the annual membership fees (mostly foreign residents, who play on "their" course without paying a green fee.) There are courses that register a daily average between 60 to 100 rounds by members.

“Right now, all courses are in survival mode. It is true that the clubs that have a larger membership will have more activity, but these alone are not the solution to the treasury problems that this crisis imposed,” said the leader, stressing that the lack of revenue and the need to maintain the operational infrastructure required “a lot of gymnastics.” The uncertainty about the end of the pandemic and the arrival of foreign golfers also causes a lot of concern about the risks of unemployment.

"Companies have been using the mechanisms provided by the State, but in this context of uncertainty in which we live, it is very difficult to make predictions about what will happen in terms of employment and job security."

In this profound crisis, Portuguese golfers will be looking even further for courses in the Algarve, but complaining about high green-fee prices, despite little demand. The recovery is dependent on the foreign market. The main market is the British (with suspension of air connections) and there are other markets where citizens are advised not to travel during this period. There are operators who have withdrawn from 2021 and are transferring reservations to 2022, but most still bet on reopening in force this year.

“If the pandemic situation is defeated in Europe and people can travel with some security, I have no doubt that Portugal, and the Algarve in particular, are among the first tourist regions with the greatest demand and chance to recover the tourist flow. Portugal may soon present acceptable numbers again, which convey that confidence to all who come to us and who wish to spend a peaceful holiday,” said Carlos Ferreira, from Tee Times, stressing that he hopes that during the second half of the year the situation will start to normalize.

Golf, which in 2018 had a direct and indirect impact of 1.3 million euros in the Algarve, represents an important part of GDP, but unlike what has happened so far in Portugal, where the golf industry (courses, associations, clubs, etc.) did not receive any support or incentive, in neighboring Spain the government, the Royal Federation and the Association of Course Managers, met three months ago, highlighting the importance of golf for the country.

At that meeting, where a study on the impact of golf on the Spanish economy was presented, it was said that golf “is the engine of economic activity” in tourism, highlighting “the important role that (golf) can play in the recovery phase after the pandemic.”

Tourism Minister Reyes Maroto then announced that the government will lower VAT on golf from 21 to 10 percent.