Data released yesterday revealed July saw a 13 per cent dip in the number of Britons enjoying a stay in the usually popular destination.
Portugal relies heavily on British tourism, so it is no surprise such a large drop in the number of UK holidaymakers has caused alarm.
Portuguese regional Hotelier Association AHETA already attributes almost 13 percent loss of tourists to Brexit, and they are concerned it could signal a continuing downward trend. Figures are likely to be hit by extensive delays at airports in Europe over the summer.
President of the Hotels Association Elidérico Viegas said the drop in demand among tourists from Great Britain had been foreseeable because of the decline in the rate of the pound after the referendum, making holidays in the Eurozone more expensive.
His comments are supported by official data from the UK which shows almost five per cent fewer British nationals had gone abroad in May.
But despite this, panic has set in on the south coast of Portugal because the United Kingdom has been one of the most important countries for Algarve tourism for decades and it was assumed the country could weather any drop.
Britons account for almost half of the overnight stays at hotels on the south coast of the country.
In an interview shortly before the July figures were released, Desidério Silva, president of the Algarve Tourist Board, had still assumed that even a progressive Brexit would not change much for tourism.
He said: “The Algarve is loved by the British and is a very strong brand – both for tourists and for those here on business.”
However, whilst there are less Britons holidaying in the Algarve, there are more tourists from Germany and France to make up the numbers.
According to the hotel association AHETA the number of hotel overnight stays of German Algarve tourists rose by almost twelve percent in July.
The official tourism statistics for January to June 2017, showed a growth of 5.8 percent of British tourists – not just in the Algarve, but in the whole of Portugal.
German tourists increased by nine per cent, and Spanish and French five per cent each.
Portugal is also enjoying a rise in the number of international visitors, with tourists coming from Brazil, Poland and the USA.
Overall, the Portuguese tourism boom continued in the first half of 2017. According to the office for statistics INE, there were almost twelve per cent more overnight stays by tourists.
Revenues rose by almost 19 per cent, indicating higher prices. The Algarve registered an increase of over nine per cent in overnight stays by tourists.