Prices go up at different rates. Restaurants and hotels in Lisbon cost twice as much as the Alentejo and the Algarve – Observador

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If you usually eat out or stay in a hotel, you have probably noticed that inflation is already known there. In average terms (and based on a sample collected by INE), prices in hotels and restaurants were 9.93% more expensive in April this year than in the same period last year. This means that a € 20 meal or overnight stay in April 2021 became more expensive almost two euros a year later, at the national average. But this increase was far from uniform throughout the country: for the same meal or the same accommodation, in Lisbon and Vale do Tejo he began to pay more. 2.5 euroswhile in Alentejo the climb was 1.24 euros and in the Algarve 1.36 euros.

In April, the inflation calculated by the INE reached 7.2%, the highest value in the last 29 years, after having already advanced by 5.3% in March. The war in Ukraine plays a role in this escalation, exacerbating rising costs of energy, raw materials and food, but prices were already on the rise since last year also due to the pandemic, which favors disruptions in supply chains.

The increase in April was transversal to most sectors (with the exception of clothing and footwear, due to promotions). And to all regions. It was in the North that inflation grew the most in annual terms: it increased by 7.56%, above the metropolitan area of ​​Lisbon (7.23%), the Center (7.15%), the ‘Algarve (7.06%), Alentejo (6.67%) and the autonomous region of Madeira (6.14%). Apart from the Azores (where inflation stood at 4.06%), there are no significant differences in these numbers from the start.


But it is by looking at certain product categories that one notices considerable regional discrepancies: this is the case with restaurants and hotels, where these differences can practically double if one compares Lisbon and Vale do Tejo with the Alentejo or the Algarve.

There are also divergences in the category of “food and soft drinks”, where inflation varies from 4.91% in the Azores to 11.82% in the Algarve. It is 11.09% in the North, 10.38% in Lisbon, 9.63% in the Center, 8.74% in Alentejo and 7.94% in Madeira. Another example: in “home accessories, appliances and current home maintenance”, inflation ranges from 0.53% in the Azores to 7.72% in the North.

Inflation in Portugal reaches 7.2% in April, the highest value in the last 29 years

But how does the INE calculate the inflation values? From the consumer price index. According to the information provided by the institute, to determine the national index, 140 INE interviewers collect about 120,000 prices in 12,500 large and small factories, distributed in 45 locations in the country. The basket of selected goods and services includes more than 1,300 items (prices can be collected for the same item in different establishments).

Inflation already consumes purchasing power. The Portuguese shopping cart is the smallest in the past four years

In addition to on-site pickup, there is also one online for a “significant number” of package tours, air travel, and hotel prices. And there are situations in which there is simultaneous collection in person and online: for “some large chains of furniture, mobile phones, clothing and footwear”. In the case of fuel, drug and rental prices, administrative data sources are used.

But not all categories of goods and services have the same weight in the calculation of the consumer price index. Each category is weighted taking into account its weight in household spending. The structure of this expenditure is calculated on the basis of the “Survey on household expenditure”, carried out by the INE every five years, but also on the basis of the collection of data on the ground, among others in the National Accounts and in the Census.

Inflation in April varies widely between categories. The most advanced sector is in the transport sector (13.09%), as well as in food and soft drinks (10.25%), in housing, water, electricity, gas and other fuels (10.19%). ) and in catering and hospitality (9.93%). Only in clothing and footwear was a drop (-0.72%), which is explained by the seasonality of the collections.

In restaurants and hotels, inflation varies between 6.20% in Alentejo and 12.51% in Lisbon and Vale do Tejo. The INE explains to the Observatory that the sector accounts for 8.2% of total inflation. Each month, the institute collects approximately 6,200 prices online and in person in the seven regions of the country. “All types of products and businesses” are considered: for example meals, snacks, pastries and drinks, including takeaways and home deliveries, as well as hotels and restaurants located throughout the country, “with different types, representative of the expense of families”.

The association representing the catering and accommodation sector, AHRSP, justifies the 9.93% increase in prices in the sector with rising costs, which are “crushing” the operating margins of companies. But it does not explain the divergence between Lisbon and the rest of the country.

At the Observer, Ana Jacinto, general secretary of AHRESP, speaks in general, national terms. You say that the “inflationary pressure” experienced in Portugal is “causing enormous pressure” on companies in the sector and that “thesharp increase in costs“Is even” compromising the sustainability of the business “.

“The vast majority of catering, assimilable and tourist accommodation companies have already felt this significant increase in operating costs, mainly food (oil, meat, countryside, among others) and energy (electricity, gas and fuels),” he says. . Costs that lead companies to see their profit margins “squashed”.

Ana Jacinto points out, for example, that the category of food and soft drinks increased by 10.25%, “which has a direct and very strong impact” on economic activities. The companies, she assures her, have tried to “postpone” the decision to increase prices to the customer, but the “the cost-absorbing capacity is not unlimited“. Furthermore, many companies had not yet recovered from the shock of the pandemic.

“After two consecutive years of pandemic crisis, in which the financial structures of companies are totally fragile, with impoverished coffers, our micro and small businesses they are unable to maintain sales prices given the significant increase in its operating costs ”, he points out.

Also, remember that demand has increased – it is at levels “very close” to pre-pandemic levels – which is pushing prices higher. “We cannot forget that the economic situation in April 2022 is completely different from that of April 2021, when there were still severe restrictions on our tourist and leisure activities and there was little demand, factors that influence the prices charged by restaurants and hotels”, ha adds.

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