Miguel Barros owns Café da Cusca, located in the historic center of the city, and still does not know for how long he can resist. He opened the small café-restaurant specialized in typical Portuguese meals, made in plain sight, two and a half years ago, in the middle of the boom in tourism.

Since 2016 that Portugal sees a flood of awards, widely announced by the country’s media, and is nominated for the podium of the best touristic destinations for four years in a row. The World Travel Awards, presented as the Tourism Oscars and created in 1993 by an events company based in London’s distinct Mayfair district, are the most generous: the country is distinguished in several categories and Lisbon is mentioned, at least, in two consecutive years – “Best City Destination”, in 2018, and “Best Destination City Break”, in 2017 and 2018. In 2019, readers of Condé Nast Traveler, an American travel magazine,  set Portugal on the third place of its list of “Best Destinations in the World”. 

Tourism revenues increase every year and are the main drivers of the country’s economic recovery after the subprime crisis in 2008. The Bank of Portugal (BP) guarantees that from 2013 to 2019, revenues collected by tourism doubled: from 9 billion to over 18 billion Euros.

But confinement is decreed, suddenly, on March 16th, announced only four days earlier by Prime Minister António Costa. On that day, Portugal registers the first death caused by the coronavirus, an 80-year-old man who, as the General-Administration of Health (Direcção-Geral de Saúde – DGS) assures, had other associated pathologies. The country has 331 confirmed infections, 86 more than the previous day, 139 are hospitalized and 18 need intensive care.

There is a global public health crisis and the course of tourism’s upward line reverses to levels close to zero. Portugal looses about 97% of the tourists who used to visit the country every April, reveals a study by the National Statistics Institute (INE), released on June 17th, which also states that during lockdown, tourism activity is practically none: between January and April, it drops 45%, compared to last year’s figures. On July 1st, INE reports that around 192,000 jobs were destroyed from February to May, an increase of 4% in the unemployment rate. However, it points out that the numbers may be much higher because it only counts people actively looking for work. And there is a large part of population still with restrictions on mobility.

BP expresses its pessimism: according to its calculations, tourism revenues will drop by at least 60%. But it could be much worse. On June 21st, the country already has the second worst ratio of new cases in the EU, surpassed only by Sweden, a situation that could negatively affect the slight recovery tourism sector expects this summer.

Tourism activity is the largest economic export sector in the country, according to data from Turismo de Portugal, a government institute that supports and promotes the activity:

But the world turned around, planes started parking, travel and hotel stays were cancelled. The country emptied of foreigners, locals locked themselves in their homes, schools closed as well as all trade and services considered non-essential.

On March 18th, the second death from covid-19 occures: the chairman of the board of Banco Santander succumbs, health authorities believe he has contracted the virus in a snowy holiday in northern Italy. The numbers are climbing at an alarming rate: 642 new cases of infection confirmed, 89 patients admitted in the hospital, including 20 in the Intensive Care Units (ICU).

The President, Marcelo Rebelo de Sousa, announces that on the following day he will be declaring the first state of emergency to last 15 days but it will undergo two renewals to be extended until May 3rd. When it starts, on March 19th, the number of infected reaches 785, 143 more than the previous day, and hospitals have 89 hospitalized, 20 of them in the ICU. The country registers 3 deaths.

April arrives with steep rises and the DGS marks the peak of the pandemic: the average of new cases is 560 daily, there are close to 27 deaths per day. On April 1st, 726 patients are admitted, 230 of whom in the ICU.

The president makes the first renewal of the state of emergency on April 3rd and explaines he’s concerned about the Easter season, traditionally celebrated with family meetings, appealing to the good sense of the Portuguese to avoid them. Traveling between municipalities is banned, except for workers in essential services and commerce, who must carry a document of justification from their employer. In the Lisbon region, cars trying to cross the 25 de Abril or Vasco da Gama bridges are stopped by the police to justify the trip and sent back if the justification does not comply with lockdown’s rules.

On April 30th, the scenario is worrying: patients in hospital increase to 968 but the number of those in need of intensive care fall to 172.

The country is stunned by constant and contradictory news about potential treatments and vaccines, has little hope for the solidarity of the EU and is beginning to realize that the economic disaster is just around the corner.

The Prime Minister ensures citizens that everything will be solved and has to justify the need for strict measures several times in an attempt to allay national concerns: “There’s no point in rushing. This is not the time to rush, this is not the time to see the light at the end of the tunnel. We know that there is a light at the end of the tunnel , but it is not yet in sight,” António Costa says in an interview with TSF radio, two days before the second renewal of the state of emergency.

Even so, during the six weeks that the population is confined, the police authorities arrest nearly half a thousand people for disobeying the restrictions imposed: infected people caught outside their homes, groups celebrating in the street and 2418 shops that should be closed, are some of the abuses recorded.

With the end of the state of emergency, the state of calamity is decreed on May 3rd. The suspension of fundamental rights under the Constitution is no longer allowed and the restrictions are much lesser. Despite the slight slowdown in numbers (there is 25,282 confirmed cases, 1043 deaths, 856 patients of whom 144 are in ICUs), it is time to begin to ease the harsh rules of lockdown.

The plan for deconfinement foresees three phases: the first on May 3rd, the second on the 18th and the third on June 1st. The stores and services are reopening and social activities are being restored. But to reach phase 2 and 3, the pandemic will have to remain under control. António Costa warns that, if necessary, he will retreat, in his words, “without shame”. The numbers remain stable and, between phases, there is a decrease in the most important indicators for the Portuguese: number of deaths, number of hospitalized and number of patients in ICUs.

Between the 3rd and the 18th of May the average of new confirmed cases is 245 per day, the average of deaths stays around 11 per day. On May 18th, there is 628 patients admitted, 105 of whom in the ICU.

João Pedro Martinho is one such case. Owner of Your Lisbon Home, which runs 54 tourist apartments, 19 of which in Bairro Alto and Chiado, he tells that what saved him from bankruptcy was the month of May, and the apartments he keeps in Parque das Nações, an area on the limits of Lisbon, made of buildings and streets from the 21st century. Everything smells like new, the areas are wide, unobstructed, it’s easy to park outside. Almost every houses include a garage and plenty of typical amenities of recent buildings. “It’s the only apartments we’ve managed to rent for short periods to the domestic market”, he reveals.

In fact, the tourism made by Portuguese on getaways or on business added more than 10 million guests to the tourist accommodation, in 2019, according to the Tourism of Portugal, almost as many as the total Portuguese population. João Pedro captures this type of tourists with the offer that most pleases them and is getting results: “I managed to recover the lost months. Finally, the company balanced the books”, he says.

The historic center is another story. “Portuguese are fleeing this area which, however, is the foreign tourist’s favourite. The houses are small, picturesque, in buildings built 200 years or more ago,” he explains.

The only solution available is to rent the apartments on long-term contracts. João Pedro didn’t wait to get out of lockdown to start doing it because he believes international tourism will only return at 2021. “I rented it right in April, at values that were unthinkable before the confinement. We are loosing about €1,000 for each apartmen, every montht”, he confesses. He now rents it 2-bedroom apartments at €900 when, still in March, the value of a downtown renovated 2-bedroom apartment was not less than €1500.

“Long-rentals are a temporary measure because it only allows me to cover landlord’s rents, no wages can be paid. The company can’t be what it used to be, operate in the same way and sustain 14 jobs if we continue to work like this”, he says. If tourism market doesn’t cheer up, the company will have to undergo a major restructuring. João Pedro’s hope is that summer can bring some improvements and some foreigners. If the situation continues, he’ll have to think of a plan B and start focusing on the domestic marke only. Wich means abandoning the houses in the city center, keeping only those that the Portuguese appreciate, the ones in Parque das Nações. “But it’s still too early to assess whether it’s necessary to make this kind of decision,” he says.

João Pedro’s main concern is to keep the jobs: “It took us a few years to create this team, it’s very well adapted to our philosophy, it will be a waste if I have to break it up”. Between April and May, he sends everyone to part-time schedule with half of the salary. “In June we already managed to increase the schedule and add €150 to the salary,” he explains.

However, he attributes the recovery only to his effort and his team. The bank called him to offer a credit line of €500,000 but charged an interest rate of 3%, which is exactly the same as it charged in times without lockdowns. João Pedro thinks they were just doing business as usual and he refuses the “help”.

João Pedro says the Government’s support measures shall be quite different: “Injecting money into the banks so that they can keep doing business as usual, does not seem to resolve it. We risk accumulating debt at a time of uncertainty. Who knows if we can pay? Besides, banks only lend to those representing small risk.”

If the intention is to help, as the Prime Minister announced, there are other ways. “Portugal lives on tourism,” he warns. In fact, according to the latest data from the OECD (Organisation for Economic Co-operation and Development) of the 36 member countries in 2016, Portugal had the highest percentage of GDP resulting from the tourism sector – 12.5%. In 2017, it increased to 13.7% and in 2018 it jumped to 14.6%, according to the most recent data from the National Statistics Institute (INE), which are not yet in the OECD database.

João Pedro suggests an alternative to save the tourism sector, which has contributes the most to the Portuguese GDP:

The bureaucratic gears of support subsidies

André Cristóvão, owner of two gourmet hamburger restaurants in Bairro Alto – A Cultura do Hambúrguer (The Hamburger’s Culture) -, also complains about the lack of government support and the way he’s forced to keep his business open in an area that will remain empty until tourists return or as long as the night activity closes at 11pm. “You don’t see a soul in these streets. Every day I serve a single lunch, I think I’ve done business. It’s been ridiculous,” he complains. The average of his daily income since May 18th, when he was forced to open doors and take the staff out of the lay-off, is €200 . Before the lockdown, he was making €3,000 a day.

André says he understands that they force restaurants to reopen because it makes sense in places with mostly Portuguese clientele. But not in Bairro Alto. “Only if the bars can be opened until dawn, as before,” he explains. And the situation is so serious that André has to alternate the lights he keeps on to save energy and lamps. “I spend a lot to keep the door open. I pay the salaries of the kitchen and salon staff, electricity, gas, water and the products I buy and then do not sell, like meat and vegetables”.

The government’s support is limited to lay-offs for its employees. André, as managing partner, is not entitled to such support. The credit lines announced by the government also do not cause any improvement in his finances, as he explains:

“I had 29 people working, now I have 9. The contracts were running out and I didn’t renew them,” he reveals. “In the first month, I still tried to hold on, I believed government would be able to do something to make up for this hecatomb,” he adds. He could have ended the employment relationship with 5 of his employees as early as April, but against his accountant’s advice, he chose not to. As time went by, he realizes that government will not add much more and that support will never be enough.”There is no solidarity in Europe or among Portuguese. It´’s hard to understand that fighting so others don’t lose their livelihood is a mistake that can put my family’s livelihood in danger. I cannot support everyone on my own. They need my help and I need the help of others to be able to help. Unfortunately, helping does not fit the way we have organised the response to this pandemic,” he concludes.

Families are sustaining themselves with the value established by lay-off, a government measure, still in force in some cases, that assigns two thirds of the usual wage. The State, through Social Security, guarantees 70% of this amount and 30% has to be paid by the employer. But there’s a maximum ceiling: the 46.66% for the part of the salary guaranteed by the Government will only apply to two minimum wages (€1270) at the most. In fact, the subsidy would never exceed €593, less than the minimum wage (€635). Parents with children under 12 are automatically covered by this mechanism, as well as all employees of companies obliged to close down temporarily. Companies operating by teleworking can also opt for lay-off if the employee is needed only part-time. Self-employed workers are covered and, later on, micro-business managers with an annual turnover limit of €80,000: both cases receive 46.66% of average monthly income of prior year. However, it is necessary not to have any kind of debt.

Companies are asked to present a positive balance sheet of their activity in order to be able to access credit lines distributed by banks. André is still putting down the investment he made to open his second restaurant, the balance sheet only has negative numbers. “The bank makes me fill out reams of paperwork, asks for kilos of documentation, there’s always something missing, I’m spending weeks of this crap. Finally, they tell me I’m only entitled to €10.000, the same as three  days of pre-covid income. It turns out, they can only count on my first restaurant’s numbers. I feel like someone is mocking me,” he says, angry.

For André, the country fails to support businesses and does very little to help families.

The Ghost Houses

Elquisson Menezes, a Portuguese who arrived from Brazil in 2007, saw an opportunity to improve living conditions in Lisbon’s vibrant tourism and decided to rent three apartments in the downtown area and convert it into 11 short-rentals rooms for tourists. He used to make an average of around €9.000 per month.Today, he has only 4 rooms occupied – he rents it for a long period of time, he takes out €1.300 a month, an amount he says is insufficient to cover the rents he has to pay to his landlord.

He keeps trying to rent the vacant rooms but it hasn’t been easy. “It’s an unattractive model for the Portuguese. And on top of that, there’s a lot of competition from apartments that used to be for tourists – and which entered the monthly rental market because they no longer have tourists either”, he explains.

With the houses almost empty, Elquisson is relying on the savings he managed to accumulate before the pandemic. But he’s worried, he thinks the money will only last three more months. “I’m going to have a hard time paying the rent of the house I’m living in. It’s €800,” he says.

He has never heard of government support for rents through the IHRU (Institute for Housing and Urban Rehabilitation) which has promised an interest-free credit line for the population stressing  with barely being able to afford rents of April, May and June. The loans will be paid in 36 instalments from January 2021. To be eligible for support, the applicant has to prove that there has been a drop in monthly income. The process has been lengthy and there are still families with unpaid rents, waiting for the institute to approve their cases.

It seems that the disclosure of this support doesn’t even reach Elquisson’s ears, who tried to negotiate his rents  with his landlord. “He told me he lives on that money, has no other source of income and says he can’t help me because nobody helps him either.”

According to a study by Savills in partnership with HomeAway, a competitor of Airbnb, half of the second homes in 2018 were purchased with short-rentals in mind.The study, which heard 7800 owners and 6800 travellers in Portugal, but also the UK, USA, Spain, Canada, France, Italy, Netherlands, New Zealand and Brazil, shows that the two main motivations for citizens renting their secondary residence are: obtaining an additional income (37%) and supporting maintenance costs of the accommodation (34%).

Eduardo Miranda, president of the Association of Local Accommodation in Portugal (ALEP) told the newspaper “I”  that, in 2018, short-rentals already accounted for nearly 50% of overnight stays in Lisbon and Porto.

The parish of Misericórdia, for example, which includes areas such as Bairro Alto, Santa Catarina, São Bento and Príncipe Real, has 45% of its dwellings allocated to tourist accommodation businesses – there are almost as many hotels, hostels, guest houses and local accommodation as dwellings.

Tomás Berger manages three apartments for tourists in the historic centre, he has also seen his business move backwards but he’s still hoping to reverse the trend:

With a lot of time in their hands

The city center is a desert. Several establishments – especially small shops of clothing, footwear and micro-bazaars – have closed down for good and it’s becoming more and more common to find advertisements for rent or for sale stuck or glued to the windows of the historic centre.

Mónica Sousa trys to take advantage of the immense time she has in her hands to do small DYIs in her bar-pizzeria in Bairro Alto. She’s preparing to paint one of the interior walls while complaining:

Since lockdown, Cristina Freitas, aka Dj CiCi, doesn’t have a job either. “I’ve been trying to understand if playing music on an online platform would be a workable alternative, but it is not. Those who tried, failed. I don’t see any other way to make money under these circumstances. And Bairro Alto is still all closed at night,” she says, sorrowing.

Nuno Bessa, a TUK TUK’s driver touring the city centre, is no better. He returned to work on June 10th but his car is still parked. “It’s 5pm, I’ve been here since 9am, I haven’t left the same place yet”.

He insists on recording his interview in English to make sure potential tourists understand the problems he has faced and the advantages of visiting Portugal. “We managed to control the numbers of the pandemic, it’s one of the safest destinations in the world,” he says, preparing himself for the video and warning that if tourists don’t show up soon, the vacuum will remain.

“Downtown risks being empty for a long, long time”, he says. As well as the pockets of the Portuguese that only seem to fill in with hopes and many debts. Who knows if the fact that Lisbon became the European city with the most flight bookings in the first half of June, according to World Travel and Tourism Council, will bring more than just that? Nuno’s appeal: