The seasonality structure of demand in the portuguese hotel industry before the COVID-19 pandemic

Abstract

The purpose of this paper is to study the monthly seasonality structure of demand in the hotel industry in continental Portugal before the outbreak of the COVID-19 pandemic in 2020. The tourism sector accounts for more than 10% of Portugal's GDP, as well as being a key factor for regional development and employment. Understanding the seasonality structure of the hotel sector provides useful insight about business viability and aids operational decisions, namely concerning the post-pandemic recovery. Therefore, we analyze time-series data collected from Statistics Portugal, concerning net bed occupancy rates for continental Portugal, as well as according to region and hotel category, for the pre-pandemic period between 2014 and 2019. This allows us to identify the seasonal peaks according to region and compare the differences in demand for hotels according to hotel category. We also analyze the relationship between the seasonality coefficients and the average income per night (room rate).SEASONALITY IS AN IMPORTANT FACTOR that affects the demand of the different segments of the tourism industry, with a significant impact in terms of hotel operations (e.g., Chang et al., 2019;Butler, 1999). It is a phenomenon driven mostly by climatic, and institutional factors, such as school calendars and holidays. Among them, are school and work holidays, national holidays, religious and cultural celebrations, and climate conditions at touristic destinations.The estimation of seasonal profiles is extremely important for designing and implementing operating strategies, namely, at the human resources, and marketing levels.

The competitiveness of Portugal: views from the market

“…The tourism sector is one of the most representative industries in Portugal regarding gross development product (GDP) (Maia and Paralta, 2021;Neves et al, 2015;Ivanova and Nikolskaya, 2022). It contributes more than 10% of Portugal's GDP and plays a crucial role CR 34,3 in regional development and employment (Maia and Paralta, 2021). The tourism sector's direct contribution to Portuguese GDP has been increasing over the years (Neves et al, 2015).…”