Portugal-Commerce and Tourism

Portuguese domestic commerce was dominated by numerous small, family-owned firms concentrated in the major urban areas. Retail outlets, around 80,000 in the late 1980s, were declining in numbers as supermarkets increased their market share. At the same time, upscale but smaller sales outlets were growing in number, replacing traditional retail shops. In both retailing and wholesaling, foreign investor participation was helping to accelerate the modernization of Portugal's domestic trade.

Foreign tourism was an important component of Portugal's services sector. Foreign exchange receipts from tourism income amounted to US$2.57 billion in 1989, compared with US$0.55 billion in 1973 and US$1.15 billion in 1980. This service industry directly employed an estimated 150,000 persons, equivalent to nearly 4 percent of the active labor force that year but indirectly had strong secondary impacts, particularly on construction. From 1973 to 1990, tourism income as a share of GDP was roughly stable, fluctuating between 5 and 6 percent. The mid-1970s proved to be an exception: the brief period of radical politics combined with the global recession led to a halving of foreign arrivals to 2 million in 1975 from over 4 million in 1973 and to a sharp reduction in the receipts/GDP ratio to 2 percent from 5 percent in the earlier year. There were 7.3 million foreign arrivals in 1981, 16.5 million in 1989, and an estimated 18.4 million in 1990.

Of the 16.5 million recorded foreign visitors in 1989, 93 percent were from Western Europe. Spaniards, not surprisingly, constituted three-fourths of all visitors, although most of them were excursionists, that is, visitors staying for a period of less than twenty-four hours. Visitors from Britain, although only 7 percent of the total, contributed about 30 percent of tourism earnings.

Portugal offered many attractions to vacationers from northern Europe and the United States--the medieval castles and other architectural landmarks, a number of which served as government-operated inns; the more than 100 beaches along the southern coast of the Algarve; and the resort area stretching westward from Lisbon at the mouth of the Rio Tejo, notably the famed resorts of Cascais and Estoril. Other attractions included Portugal's mild climate and its relatively low cost.

The major goals of the Portuguese government for this significant export industry were to improve the quality of tourism services, to attract visitors to northern locations, to safeguard the environment, and to encourage investment in tourism facilities.

Data as of January 1993