McKinsey estimates that between 2020 and 2023 Portugal could lose €60 billion of GDP (equivalent to 26% of GDP levels in 2019), considering both direct and indirect and induced effects. Additionally, up to 600,000 jobs could be affected, some of which may not be recovered in the future.
Domestic tourism may not recover pre-COVID levels until 2023, and international tourism (which is about four times larger than domestic tourism) until 2024.
Dependence on air travel, regional asymmetry in healthcare services and higher share of MICE create additional hurdles for tourism recovery in Portugal and require decisive action by stakeholders.
Three priorities emerge for a faster (and more sustainable) recovery. First, businesses need to decisively enhance competitiveness most notably through digitalization. At the same time, Portugal needs bigger players and new collaboration models are to be developed. Above all, there has to be an effort to reimagine tourism and create a new paradigm for its future development.