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GUIDELINES FOR INVESTMENTS IN PORTUGUESE HOTELS: PROFIT OR LIQUIDITY GOALS?
Abstract
In Portugal, tourism revenues in 2019 accounted for around 8.5% of Gross Domestic Product, before the COVID-19 pandemic. One of the sectors that directly influence this weight of tourism revenues is accommodation. Tourism business units have suffered a severe setback since the beginning of the global pandemic. However, it is generally believed that the sector will return to the 2019 level around 2 23. Although for investors in general the profitability of their investments is their main objective, in most sectors in Portugal, and also in tourism, the business units are managed by small and medium-sized companies, which are geared towards liquidity, rather than profitability. Thus, for new investors, it is important to determine whether their main objective is profitability or liquidity. This study analyzed the averages of profitability, liquidity, values of investment in asse s, and the number of employees of the accommodation sector by region. There were analyzed 2,905 accommodation units, from 2000 to 2019. Those units were also analyzed as having or not a restaurant. Results show that investors in hotels who are mostly looking for profitability shall invest in the Autonomous Region of Madeira, without a restaurant. On the other hand, investors whose main objective is liquidity, should invest in Algarve, and also without a restaurant. This knowledge is of paramount importance since it is urgent to attract new investors who can achieve their goals, investing in the right regions, with the right investment level, and with an adequate number of employees. Keywords: Accommodation, Hotels, Liquidity, Portugal, rofitability
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References1
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