The Impact of Overtourism in Lisbon

“Overtourism” was the buzzword in Europe in 2017. Barcelona, Venice, Prague, and Dubrovnik made news as locals protested against the unsustainable rise of tourism and the negative impact on residents’ quality of life and on the survival of local, smaller businesses.

But is this the case with Lisbon? Is “overtourism” the actual reason why old restaurants and centennial shops in the city’s historic center are closing?

After 20 years in Lisbon (and counting), I’ve seen areas of the city reinvent themselves, and I’ve seen others lose their appeal to locals. When Bairro Alto’s residents demanded a curfew and bars were forced to close at 2 am, locals found new spots a few streets down at the now revitalized Cais do Sodré. When Portuguese chefs opened haute cuisine restaurants in Príncipe Real, Lisboetas (Residents of Lisbon) ditched the good old tascas (tavern-like restaurants) for the new foodie hotspot. This was years before the tourism boom.

I can think of quite a few family-owned businesses, for example, that follow new marketing trends without jeopardizing their brand identity. They appeal to both locals and tourists. Yet I know others that completely butchered what made them unique and added tourist-centric items to the menu like tapas (a Spanish dish) or Americano coffee (Portugal is a country of espresso drinkers). This debate of how to appeal to a younger customer base is at the center of the Aillaud & Lellos case.

I often think of this viral post by Alberto Brea on LinkedIn, that explains how it’s not the technology that “kills” the old businesses. Rather, businesses fail when they stop becoming customer-centric.

The Aillaud & Lellos case

I first heard that the bookstore Aillaud & Lellos had closed via an infuriated Facebook rant. The 1930s Historic Lisbon shop was located on one of the city’s busiest commercial streets in the famous Chiado neighborhood. It shut its doors permanently on December 31st, 2017 because the owner couldn’t (reportedly) afford the increase in rent.

As much as I understand locals’ concerns when a historic spot closes, the truth is I can’t remember the last time I saw that bookstore crowded with customers. In fact, I can’t even remember the last time I went to Aillaud & Lellos. I usually chose the French chain Fnac, which is located on the same street and has a larger selection of books, the possibility to order online, and of course, lower prices.

This is a classic story. A multinational chain comes in and undercuts the market. Yet in Lisbon, it doesn’t always go down this way. The bookstore Palavra de Viajante in São Bento street, for example, is doing well and is not at all threatened by large retail brands or the crisis of the publishing market. It’s a niche store that only sells travel-related books and I go there because they offer an exceptional, personalized service, and because the books rarely cost more than at other stores.

At the risk of offending fellow Lisboetas, I have no problem accepting the closing of Aillaud & Lellos. There are over 60 historic shops in Lisbon (most of them in the city center), and only a couple of them are closing. Traditional or established doesn’t mean eternal. I know of restaurants in Lisbon whose sole achievement is to be in business for more than 100 years. If the food isn’t good though, then I won’t recommend it to anyone.

About “overtourism” in Lisbon and the impact on local businesses

To understand if Lisbon really has an “overtourism” situation (and if that alone has a negative impact on local businesses), first you have to understand Portugal’s economy in 2011:

  • Unemployment rose to 12.7% that year, forcing over 100,000 Portuguese to leave the country (almost 44,000 of them are still permanent emigrants).
  • Tourism was on the rise in Europe (+4.6% versus the previous year, according to the UNWTO) and Lisbon was becoming an attractive, inexpensive destination.
  • Short-term rental websites like Airbnb presented an opportunity for homeowners to avoid foreclosure and earn an extra income (taxes on short-term rental income were lower than long-term rentals), and for tourists to have the like-a-local experience.

When every other industry was failing, tourism was the only one growing during the recession: the city is notorious for great weather all year round, great food, a diverse cultural heritage, and easy-going hospitable residents who happen to be fluent in at least one foreign language. Since 2016, the overall Portuguese economy has been picking up speed and the tourism industry shows no signs of slowing down.

While budget-friendly travel, all-inclusive package tours, and massive cruises make traveling easier and more accessible to everyone, the hordes of tourists following a guide through the narrow streets of downtown Lisbon drive locals insane. High season, which used to last from June to September, now happens all year round.

In Lisbon, this “Overtourism” is causing a wave of real estate speculation, with rents in the historic center reaching unprecedented highs. While certain shops have been “priced out,” others such as Aillaud & Lellos shut down largely because they could not maintain a customer base.

It takes more than “overtourism” for a city to lose its identity, and it’s usually connected with how locals, rather than tourists, choose to experience the city. In Lisbon, these changes started before the tourism boom:

  • Locals stopped going to certain neighborhoods in the city before they became touristic (like the riverside area of Cais do Sodré or Santos);
  • Abandoned, buildings begin to deteriorate pushing locals even further away from the area;
  • New investors, seeing the potential of the tourism industry, bought buildings on the cheap and transformed them into hotels, short-term rentals, or high-priced condos that locals couldn’t afford;
  • Businesses shut down or reinvented themselves to give way to souvenir shops, tourist-trap restaurants, and foodie-spots;
  • Locals “rediscovered” those areas but complained they were overrun by tourists and stopped going there.

Consumers won’t prevent all local businesses in Lisbon from closing but they can help balance it out by making conscious choices of where to shop, eat out, and go for entertainment. Even the smallest decision can impact the bigger picture. One perfect example is what locals call “The Triangle.”

Walk the extra mile, literally (“The Triangle” example)

There’s a neighborhood in Lisbon that the local business owners dubbed “The Triangle”. It’s a cluster of three narrow streets, between the Bairro Alto and the Santos quarters, on the route of the famous tram 28.

My fascination with their community spirit and non-tech entrepreneurial vibe (refreshing, as Lisbon is now one of Europe’s newest tech startups hubs) led me to include “the triangle” on a collaboration article for Lonely Planet “10 of the world’s coolest neighborhoods to visit right now”.

Reactions to the piece on social media were a mix of excitement from travelers visiting Lisbon, appreciation from the local business owners I had interviewed, and bitter criticism from Lisboetas condemning the area to an inevitable wave of “overtourism” and gentrification.

One month later, I returned to “The Triangle” on a Saturday afternoon, a typical shopping day. I didn’t witness any crowds of tourists clogging up the streets as Lisboetas had predicted on social media.

The same business owners I had met before told me they hadn’t seen an increase in locals visiting their shops. In fact, they were surprised to hear that the neighborhood was attracting negative comments on social media.

“We have antique shops, cafés, a grocery store, butchers, restaurants, design shops, a museum, bookstores, a cultural center, all adding up to the typical neighborhood lifestyle. But we also have a Nordic-inspired coffee house and a place selling mostly French pastries that are clear tourist spots. Locals see those first and immediately assume the whole block is gentrified and choose to never set foot here.” Claudia, the owner of Apaixonarte (a design shop selling pieces exclusively produced in Portugal), told me that day.

All it takes to support the local businesses at places like “the triangle” is to go deeper, take a closer look, and see beyond the tourist traps. That’s how I discovered these places in the neighborhood. It was like pulling a thread. I met the manager of the cultural center Polo Cultural Gaivotas, who told me about the tea shop Companhia Portugueza do Chá, who then told me about Mercearia Poço dos Negros, who told me about the coffee roasters down the street, a family business that supplies the mill, other cafés in Lisbon, and some private customers.

Social media engagement won’t support local businesses, neither will blaming all that goes wrong on the latest news trend (which right now seems to be “overtourism”). But exploring the city and discovering new (or old) places, will. Take a second to think: When was the last time you took a stroll on your block on a Saturday morning? Or bought bread at that corner bakery instead of the supermarket? Or had your after-lunch espresso at the old-fashioned cafe down the street from your office instead of that new hip place next door?

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