Investment director of the Tourism Division of Portugal Ventures, Miguel Barbosa, writes about how innovation in tourism technology has helped the Portuguese economy to begin its post-pandemic recovery.
It will come as a surprise to nobody that the Covid-19 pandemic has caused major disruption to many national economies around the world and in Europe – and Portugal is no exception with the tourism industry accounting for over 15% of the national GDP. With governments globally looking for ways to promote spending within their borders and improve GDP, looking towards the world of tech is certainly one possibility
One example is a digitalized tax refund system, where clients – the tourist – don’t have to go through a process which essentially hasn’t changed since the end of last century. A system which tourists needs to know before dispatching the luggage to the plane in case they need to present the items they purchased to the proper authorities in the airport.
The early days of going digital
When the previous economic crisis before Corona hit (associated with the Lehman Brothers) the Portuguese Tourism Board (Turismo de Portugal) decided to rethink its promotional efforts in tourism by focusing on a more digital approach.
The shift was successful and has definitely put Portugal on the map – one of the reasons that Portugal has been considered the best holiday destination in the world for three consecutive years.
In addition, hosting the WebSummit since 2018 (until 2028) raised the digital awareness of the country. This allowed Portugal to be more prepared to react in a technologically minded fashion, when the pandemic hit in full force two years ago and the country closed itself to visitors.
Opening up to tourists
However, that is the past and we are looking towards the future. Portugal opened its borders earlier this summer and the country has been regaining its place in the world of tourism – in part due to having almost 90% of the population fully vaccinated.
Hotels reopened and some managed to reach an occupancy rate of 90%. The main tourist hotpots of some city centers were again receiving their share of visitors. Statistical data relating to tourism began to improve in August and from September to November the numbers continued to climb.
Corona affecting startups
All the while, technological investment during the pre-pandemic period has helped support and facilitate these rapid changes. Portugal Ventures’ contribution to the tourism-tech market came in the form of investing heavily in 12 new startups in 2019. Back at the beginning of 2020, many of these startups were fully funded and beginning to grow fast – some as much as 60%-70% in January and February of that year in comparison with 2019. When March came, the borders closed and many tourists suddenly disappeared. It was imperative that companies rethink their business model to save their bottom line.
About Miguel Barbosa
The Author
Miguel Barbosa is the investment director of the Tourism Division of Portugal Ventures. He has over 20 years of experience in venture capital and private equity. Miguel also served as a professor at Instituto Superior de Gestão and at ISCTE - Lisbon University Institute Read More
In times of crisis, however, there are also opportunities and some of these startups were even able to thrive during corona lockdowns due to the product or service they provided. Sailside (sailside.com), a yacht charter and boat rental solution thrived – after all, the chance of catching corona while you and your family were safely tucked away on your private yacht out at sea is quite low.
Similarly, Tripwix (tripwix.com) were successful by providing luxury vacation rentals as well as experiences in Europe and the Americas to families with higher disposable incomes, who were not going to allow borders to stop them having a fantastic vacation.
HiJiffy, a chatbot for hotels, also did well. Previously, people were keen to speak to a real person, face-to-face at a reception. Now, many visitors would prefer to have a contactless experience throughout their stay – from booking to checkout. HiJiffy, through AI technology, is able to achieve an automatic response ratio above 70%, all contactless.
Others, like Merytu, were created to help people start to find employment as the lockdowns began to ease. Merytu is a platform which matches people working in the hotel and restaurant industry with business looking for staff, almost like a cross between LinkedIn and TripAdvisor as both entities are rated at the end of each service. This has functioned beautifully, both for restaurants and hotels during the pandemic, where there is an environment of uncertainty environment, and for workers who may not want to stay in one place or prefer building their own working schedule without being tied to one place – perfect for students and casual staff.
Tech coming together
One thing that the tech industry in Portugal should be proud of, is the way that organizations and companies across the industry worked together to help so many frontline healthcare workers. The technological community, made up of a movement of 5000+ people – engineers, designers, marketers, health professionals among many other specialties – came together at tech4covid19.org in order for medical staff to stay in close-by accommodation and reduce the danger to their families while continuing their very important work in helping the country. The system charged as little as 1EUR per day.
These are just some examples of why Portugal has been leading the way globally in terms of innovation during the covid period .
But why? What has helped us as a country to sustain our travel technology advancements?
Fostering innovation in tourism
For the past five years, the tourism entrepreneurial ecosystem has received a strong boost, through a program created by the Portuguese Tourism Board, named FIT – Fostering Innovation in Tourism. This program, which supports around 300 ideas and startups per year, has been fundamental in growing the entrepreneurship culture in the tourism sector.
Strong collaboration has also been built between the Portuguese Tourism Board and NEST – Tourism Innovation Center, a consortium founded in February 2019, which comprises eight entities, Turismo de Portugal, ANA Airports, Brisa Via Verde, Google, Microsoft, Millennium BCP, NOS and BPI.
Together with NEST and the Portuguese Tourism Board, we at Portugal Ventures form a ‘golden triangle’ of Portuguese innovation with the goal of fostering and creating a thriving ecosystem of tourism technology.
Through this innovation and this fundamental understanding of the vital importance of the Portuguese travel and leisure industry, we can ensure that tourism is able to support our economy and allow us to thrive.
