This historic Algarve gem is one of a number linked by walking, bicycle and horseback trails that snake the length of the region through Alcoutim, Castro Marim, Loulé, Silves, Monchique, Lagos and Villa do Bispo.

Portugal is realising that it has much more to offer visitors than sun, sea and sand and, as it considers the parlous state of Europe’s travel industry, it has an added incentive to find new recipes to attract tourists.

Reminders of a rich and industrious Moorish past are everywhere. The country is promoting its wealth of historic towns, nature trails, cultural and sporting events and traditional gastronomic pleasures. Cheaper to live in and visit than large parts of western Europe – in spite of being in the eurozone – Portugal has nevertheless been hit by a downturn in visitors.

Globally, travel and tourism have been hit hard by credit and housing market collapses. Households are cutting back on leisure travel and corporations reducing business travel budgets. The impact on tourism investment has also been significant.

Yet, depressed though travel and tourism activity is, it still employed more than 235m people internationally last year, generating 9.4 per cent of global gross domestic product, according to figures from the World Travel and Tourism Council.

Small economies, it is argued, suffer disproportionately when global economic storms strike and Portugal has certainly felt more than a stiff breeze. However, the country’s longer term indicators for the sector are more promising. The WTTC expects its contribution to GDP to rise from 14.4 per cent (€24.2bn or $35.8bn) in 2010 to 16.9 per cent (€43.7bn) by 2020.

Real GDP growth for the travel and tourism economy is expected to be 1.9 per cent in 2010 and to average 4 per cent a year over the coming 10 years. Investment is estimated at €5.1bn or 13.8 per cent of total investment this year. By 2020, this should reach €8.8bn, or 14.3 per cent.

Diversity has become crucial to the future of tourism within Portugal and a wider range of products will certainly help it weather future economic whirlwinds. The Algarve, for example, launched a €300,000 campaign at the year’s start. Entitled “Algarve: Europe’s most famous secret”, it is aimed at drawing attention to the region’s natural landscapes, local gastronomy, historic sites and, of course, some of Europe’s finest golf links.

Golf is still a mainstay of the industry in the region with wonderful championship and resort courses suitable for all abilities. However, hefty airline charges for golf equipment – as much as £60 ($90) for a single set of clubs for a return journey, say from London to Faro – have prompted promotional strategies aimed at easing the drain on golfers’ pockets.

Medical tourism is another area to which Portugal is turning its attention. A Longevity Wellness resort, with its own medical spa and anti-ageing treatments, has opened in Monchique, Algarve.

In Lisbon, Fly2doc is not only offering cosmetic surgery but medical and dental treatment including orthopaedic and eye surgery.

Since Portugal thinks it has certain built-in advantages in this sector – including proximity to main European markets, up-to-date facilities and a good climate and hotel sector suitable for recuperation – the country will doubtless be eyeing that market increasingly.

Nuno Aires, president of the Algarve tourism board, says its regional strategy is not only to promote its core offering but to highlight and market products such as wellness, nature, sports and culture.

He says: “This market diversification strategy was put into place to withstand the recession and welcome visitors who may not have thought Algarve offered these niche markets. It has allowed for further visitor dispersion throughout the region, while also aiming for a year-round appeal to visitors. An increase in flights from several European routes in 2009-10 has also opened up the region to new visitors.”

Mr Aires says: “A number of key investments has also been made in the Algarve, further increasing the standard and options offered to tourists. These include new hotels, infrastructure for nature tourism, new wellness centres and sports facilities such as the new Motorpark.”

He adds that there are plans for new spas, new five- and four-star hotels and new golf courses.

Mr Aires says: “2010 has already seen an increase in visitors compared to 2009 with a 5 per cent increase in UK guests staying in hotel accommodation in the first quarter. We are positive for 2010, but are hoping the volcanic ash [a dust cloud that has has disrupted travel in parts of Europe] does not return to affect arrival figures further.”

Myalgarvecars.com Your Algarve Car Hire solution!!