Portugal Offers Old World Charms at Its Small Hotels

Crumbling castles and mildewed monasteries are getting a new lease on life as Pousadas de Portugal primes them for peaceful and comfortable 21st-Century accommodation.

In its 53 years of operation, Pousadas, which is Portuguese for inns, has developed its hotel chain in both historic monuments and contemporary structures. But the future decidedly lies in capitalizing on Portugal’s Old World assets.

Pousadas is plowing $125 million into opening 11 new units in formerly dilapidated castles, monasteries, convents and palaces and expanding its smaller hotels. Capacity will double to 1,200 rooms in 45 hotels.

Although the “small is beautiful” adage still holds strong at Pousadas headquarters in Lisbon, management says the only road to profitability is more rooms.

“We had pousadas with six, eight, 10 rooms, and they are not profitable and never have been profitable,” said Nuno Jardim, marketing and sales director at Pousadas de Portugal.

The tiny hotels may have the same number of rooms as a bed and breakfast, but they must offer standard hotel services such as meals and reception staff.

Opening new rooms will allow Pousadas to increase sales while maintaining operating costs and return to profits by 1996 after three years of flat or negative results, Jardim said.

The 15-member European Union is footing about 65% of the investment bill through its funds for regional development and historic monument preservation.

“You spend two or three times more in adapting a castle than to make a hotel of the same category and capacity,” Jardim said. “We couldn’t do all this investment on our own.”