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Portugal’s hotels brace for coronavirus losses, U.S. travel impact

LISBON (Reuters) – Portuguese hotels are bracing for the loss of hundreds of millions of euros of revenue in the next few months due to the spreading coronavirus, while some of the country’s top tourist destinations adopted emergency measures to fight the epidemic.

In a report published on Thursday, the AHP hotels association said the hotel sector in the tourism-dependent country could lose 30%-50% of its revenues, or up to 800 million euros ($892 million), between March and June.

More than 41% of hotels across the Atlantic coastal country reported cancellations in early March, it added.

AHP head Raul Martins said the decision by U.S. President Donald Trump to restrict travel from Europe will make things “even worse” as the North American market represents a significant chunk of the revenues of Portuguese hotels.

Portugal attracts millions of foreign visitors annually, and the tourism sector, accounting for nearly 15% of gross domestic product, helped it recover from the 2010-14 debt crisis.

It is home to two major hotel chains, Pestana, the country’s biggest group managing nearly 100 hotels, and Vila Gale, which owns around 30 hotels, as well as foreign chains.

Portugal has so far reported 78 confirmed cases of the coronavirus, far below the nearly 3,000 in neighboring Spain, but the growing fear of contagion is scaring holidaymakers away. Spain’s hotel federation on Thursday likened the impact to a “tsunami” and said there were no new bookings there.

The Portuguese government was expected to announce additional containment measures later on Thursday.

Regional authorities on the island of Madeira on Thursday suspended the docking of cruise ships and yachts in its port until the end of March and said they will check passengers’ temperature at the airport.

In Lisbon, the mayor’s office on Tuesday closed various municipal museums and theaters. Dozens of schools and various universities across Portugal were shut after tests revealed the virus in pupils or teachers.

Still, thousands of tourists and locals, mainly students, flocked to beaches near Lisbon on Wednesday to enjoy unusually warm weather for the time of the year, provoking criticism from Health Minister Marta Temido, who warned students that “closed schools don’t mean school holidays”.

“We can only beat the virus together,” she said.

(Reporting by Catarina Demony, editing by Andrei Khalip, Kirsten Donovan)