The Uncertain Future of Lisbon’s Restaurant Scene

As the COVID-19 pandemic continues, what will the future of dining out look like in Lisbon? Local business owners and experts weigh in.

The past six months have disrupted a wide range of industries in Lisbon, but some of the most visible devastation has been wrought on local restaurants.

While many of the city’s dining establishments remained open for takeout or delivery during the national state of emergency, many others were forced to close and absorb unprecedented losses.

Several months later, they’re still trying to bounce back — while adapting to constantly changing regulations. But what does this mean for the future of Lisbon’s dining scene? 

It’s not easy to draw conclusions about the long-term effects of an ongoing crisis, and initial data offers conflicting perspectives.

In the first seven months of this year, 5,670 of Portugal’s restaurants and bars closed their doors for good; that’s 300 more than in the same period of 2019. While this certainly isn’t a good thing, it’s a less dramatic difference than one might expect under the circumstances.

However, the most recent monthly survey by AHRESP (the Portuguese Association for Hotels and Restaurants) found that 38% of the bars and restaurants surveyed between Aug. 31 and Sep. 3 were considering filing for bankruptcy.

The survey also found that in the month of August, 70% of businesses recorded a year-on-year loss of more than 40%. In addition, more than 9% were unable to pay salaries in August, 14% have laid off employees since the beginning of the state of emergency, and 24% expect that they won’t be able to maintain all their employees through the end of the year.

Overall, the numbers gathered “reveal a dramatic situation for restaurants, bars and tourist accommodation that will significantly worsen with the decrease in Portuguese holidays and reduced usage of restaurant terraces as autumn approaches,” AHRESP writes. 

The IEFP (Portugal’s Institute for Employment and Vocational Training) reported that as of the end of August, 409,331 people were unemployed — a 34.5% increase over August 2019. The largest increase was recorded in the service sector, especially in the areas of accommodation and restaurants, which saw an 88.4% increase in unemployment compared to August 2019.

AHRESP also reported that as of July, the accommodation and restaurant sector had accumulated more than 12.9 billion euros of debt — the highest in the last 13 years.

But what does all this look like at the restaurant level? 

Atlas spoke with local restaurant owners and entrepreneurs to find out. 

Traditional tascas like Zé da Mouraria are limiting capacity, requiring staff to wear masks, and implementing strict cleaning standards. Photo by Melissa Haun

Sílvia Castro Ferreira is the owner of O Gaiteiro, a traditional tasca in the Cais do Sodré neighborhood. She says that they’ve experienced around a 70% loss in revenue compared with last year, and the situation hasn’t improved much over the past few months.

The decrease in tourism has certainly affected business, but the restaurant has survived thanks to local commerce and the fact that locals are dining out again. She explains that in the beginning, many people believed that going to a restaurant would almost certainly mean contracting COVID-19.

Now, however, “Portuguese people are losing their fear of going to restaurants; I don’t know if it’s because they’re fed up with the current situation or they’re getting used to the idea that we have to keep living and moving forward,” says Castro Ferreira.

Even so, her outlook on the future is sobering. As she sees it, “the battle has only just begun.”

Atlas also asked José Avillez, the Michelin-starred chef behind several of Lisbon’s most internationally well-known restaurants, about the effects on his business. He explained that the past several months have required a complete reorganization of his restaurant group, and the subsequent rebuilding process has proved challenging.

After reopening several restaurants under the new restrictions, the group is seeing about 55% of the business it received last year. It’s managing to break even — but no more than that.

Avillez predicts that the next few months will be extremely difficult, due in part to ongoing restrictions on international travel. He estimates that by spring of 2021, his group may be able to return to 80–85% of normal business, but things won’t be fully “back to normal” until 2022 at the earliest.

Tourists from outside Portugal ordinarily account for around 70% of the José Avillez group’s customers. This business model isn’t uncommon in Lisbon, and the coronavirus crisis has revealed its vulnerability while bringing a new angle to the issue of overtourism.

Avillez hopes that within the next six months, the government will be able to remove restrictions on capacity and opening hours. He doubts that restrictions will increase, as the government understands that stricter rules would make it impossible to maintain the economy.

O Gaiteiro’s Castro Ferreira predicts that the situation will get worse before it gets better, largely because of the country’s deteriorating economic situation. She points to increasing unemployment rates in the restaurant and hospitality sector as a sign of harder times to come.

Alan Gollo, the manager of Crafty Corner in Cais do Sodré, believes that the current situation will be “the new normal” until a vaccine is available. He says that in the meantime, the government should step in to help:

“In Portugal, we all know that tourism is one of the most important economic areas, and the impact of COVID is easy to see. Lowering the taxes a bit would already help a lot, [as would] making the lay-off longer term.”

Gollo is referring to the simplified lay-off, a temporary measure that allows businesses to reduce working hours or suspend employment contracts during times of crisis. But the benefits are limited, both in terms of time and financial support.

Avillez points out that even under the simplified lay-off, restaurants still had to pay a portion of employees’ salaries, rent, and other expenses while generating zero revenue. He suggests that “the government has the margin to decrease taxes for six months or one year to save the [places] that have survived.”

The importance of salvaging these spots cannot be understated, according to Sylvia Hink. She’s the co-owner of O’Malta Bistro, a small local spot in the Arroios neighborhood. She emphasizes that recuperating lost revenue wasn’t the only motivation to reopen their doors a few months ago:

“The importance of places like ours to be open is very high, if you ask me. The social contact, or even to be around (not close) to other people, is something our customers have missed a lot during quarantine times. The worried messages [asking] if our neighborhood bistro would be able to survive clearly show what [a] sense of belonging and ‘home’ a local place can provide.”

Sylvia Hink, co-owner of O'Malta Bistro in Arroios
Sylvia Hink (pictured) and her business partner are currently the sole employees of O’Malta. Photo courtesy of O’Malta Bistro

Avillez agrees that dining out provides a much-needed sense of community and social contact in the current circumstances.

“We try to create the most normal experience, for people to forget they’re in the middle of this pandemic,” he says. “Restaurants are some of the few places where you can feel like you’re living a normal life, eating and drinking with friends.”

He adds that, in many ways, the future of Lisbon’s restaurants depends on public sentiment. Will people choose to keep dining out, or will they decide that the risk isn’t worth it?

As Castro Ferreira puts it, “Above all, we want people to feel safe and comfortable when coming to our restaurant.”

Avillez believes that the key is to be cautious, but not paralyzed by fear: “You cannot be afraid, or you stop living, you stop the economy. We have to maintain the balance of being careful without staying completely at home.”

Ultimately, that balance will be crucial for the dining scene’s survival. While there’s hope on the horizon, the only certainty seems to be that the challenges will continue — and no local restaurant will come out unscathed.

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