The global crisis may be pounding bigger travel markets in Europe but it's almost business as usual for Portugal's tourism industry.
Cheaper to live in and visit than most of western Europe, the small but diverse Iberian country with sunny beaches, historic sites and some of Europe's finest golf courses has eked out modest growth in tourist numbers so far in 2008, after a record 2007, while others are ebbing.
"Portugal is an awful lot less vulnerable, especially compared to its neighbour Spain... And there is an enormous opportunity for Portugal to position itself for the time when international tourism gets back on track," said Andrew Coutts, head of ILM international tourism consultants in Portugal.
To use this chance, Portugal has to make "an enormous awareness effort", with state tourism boards, private developers and hotel operators teaming up, he said.
"They should emerge stronger if they use this time wisely. They have the capacity to compete, they have the product, they need to tell people about it. Marketing is fundamental. Internet marketing has been weak and has to be developed," Coutts said.
The number of foreign visitors to Portugal -- 7 million last year -- is dwarfed by Spain's 60 million, but exceeds Brazil's 5 million.
Tourism, including foreigners buying holiday homes, is as important for Portugal as for Spain. Tourism-linked revenues represented over 10 percent of gross domestic product, or EUR17 billion euros (USD$22 billion) last year, official data show.
The number of foreign visitors rose 3.8 percent to 5.8 million people between January and September, while in Spain it fell about 1 percent in the same period.
Henrique Veiga, head of the Portuguese Hotel Association said there was a yet unspecified fall in October. "The crisis is getting to the real economy and the hotel sector. But it's nothing too dramatic, it's part of the cycle," he said.
Sector officials say Portugal's location at no more than three hours' flight from major European centres should lure many "beach and sun" holidaymakers who may cut planned holidays to exotic destinations due to the global financial crisis.
In the meantime, Portugal may also lure more tourists from emerging markets such as China, India or Brazil, whose economies are expected to continue growing and with many of whom Portugal has cultural ties dating back to colonial times.
There are an estimated 50 resort projects in Portugal and 60 hotels planned for Lisbon alone over the next five to six years.
"Clearly, they won't all be built now with the crisis on," Veiga said.
Lisbon has doubled its hotel capacity in the past decade and the new hotels would double it again. The average price is half that of Madrid.
Despite the economic climate, some companies have decided to continue with their projects.
Last week, real estate company HN announced a EUR150 million project -- its debut in the tourism sector -- to build a luxury resort and a five-star hotel in Algarve in the south.
"We bought the land two years ago and it was time to decide whether to go ahead with the project. We believe our timing is right," said HN chief executive, Rakesh Kanabar.
Meanwhile, on the Troia beach peninsula south of Lisbon, luxury hotels and resorts are being built by big names such as Sonae and Amorim -- among Portugal's biggest conglomerates.
In addition to the "beach and sun" appeal, these seek to capitalise on Portugal's booming business tourism and have large areas for conventions and congresses.
The number of international conference meetings hosted in the Lisbon region is expected to jump over 40 percent from last year to nearly 130. It should prop Lisbon further up the list of the world's top event hosts, where it was sixth last year.
"We were going strong in November. Some cancellations, but nothing that would shift our strategy," said Paula Oliveira, director of Lisbon visitors and conventions bureau. "Twenty-four golf courses around Lisbon also help with venue choices."
