Stores come and go in cities. Stores open, others close and some remain empty waiting for better times. In the streets of Prata and Ouro, right in the heart of downtown Lisbon, you can still hear the sound of a city that lives, breathes, pulled and pushed by the trade. But it is changing and… sometimes disappearing.

In Baixa there is a problem: dozens of stores are being closed, many as a result of speculative rents. And the fact that there are more and more hotels in the area may be one of the main reasons.

Hotels being installed in the Baixa area have resulted in the closing of stores. Streets Prata and Ouro, two of the main of Baixa, are good examples: between 2009 and 2022 (as of the oldest Google Maps records) 20 stores were lost. In their places, five new hotels were built. All this in little more than a decade.

Let’s look at some examples:

In Rua da Prata, the recently opened hotel of the Eurostars chain (occupying half a block) eliminated five stores that used to be there: Polycarpo cutlery (1), a historic store in the city, founded in 1822, Casa das Malas (2), a luggage store founded in 1887, João Cândido da Silva (3) – a store selling newspapers and lotteries – a clothing store (4) and a tattoo store (5).

Foto: Google Maps

Hotel da Baixa, which opened in 2018 and has 66 rooms, has replaced six stores. Among these, in 2009, was S. Pereira Leão drugstore (1), the historic Disco Festival (2), which had closed a few years before the hotel, a clothing store (3), a pastry store (4), and one of the last silver stores on the street – the Silver Dragon (5), also closed a few years before the arrival of the hotel, and a second clothing store (6). In the place of six stores, now there is only a restaurant space terrace.

Where the Hotel da Baixa is today, which opened in 2018, there were, in 2009, six stores, including the Festival Disco (2) and the Silver Dragon (5). Source: Google Maps

Is ‘More hotels, fewer stores’ an exact science?

Part of the story can be summed up like this: in Rua do Ouro, the opening of The 7 Hotel meant the disappearance of five stores, including the key and medal store Montenegro Chaves e Cª Lda. and a goldsmith; also in this street, My Story Hotel Ouro closed four stores, among which were a pharmacy, a goldsmith, and a pastry store; today, in this space there is only a pastry store and the hotel restaurant.

The Union of Associations of Commerce and Services (UACS)’s president, Carla Salsinha, has long seen all this as a problem.

“The Union was severely critical of this. Each hotel unit can lead to the closure of six or seven stores, and there is no replacement.”


At the time, says the president of the UACS board, the municipality was warned that “we would risk, in a few years, of having a downtown with only buses of tourists, because everything else would disappear. That’s what was happening, she says, if there is no criteria, selection, and care in the evaluation of projects and authorization.

“A lot of the commerce disappeared. Not for lack of sustainability, nor did it have anything to do with the pandemic. It was a choice that was made in the hotel units.”


In the downtown area currently there are 31 hotels, 1411 rooms. More important there are more Air B&B units than residents. There are 977 accommodation units for 969 residents in the Baixa Pombalina area. The data is from Turismo de Portugal and Census 2021.

Soon, Baixa will be home to even more hotels. One of the largest currently under construction is the Hyatt Andaz Lisbon Hotel. This unit occupies an entire block of Rua do Ouro and will have 169 rooms. Soon a Pestana group hotel will also open in Rua Augusta, near Praça do Comércio, with 89 rooms.

On the importance of tourism to the city, Carla Salsinha says that the Union is “fully aware that Portugal and particularly Lisbon benefits from tourism. But there has to be a counterweight and balance and understand that our cities are only interesting for tourism if they have a life of their own”.

Regarding the role of the hotel industry in the elimination of downtown street commerce, Carla Salsinha points to the responsibility of the municipality, by licensing. “It’s up to the city council to say that we have to have a balance here, in order to have the hotel occupying the stores on the first floor, but also having, at the same time, the stores”, she says.

Who decided on the loss of stores, people and history?

The Baixa Pombalina district is now a World Heritage candidate. It has been undergoing rehabilitation over the last few years. This process, although necessary, has brought some disappointments. The increase in tourist activity has driven away the resident population and has also a profound change in the commercial fabric.

Opened in 2022, the Eurostars Lisboa Baixa hotel eliminated five stores. Photo: Inês Leote

Over the last decade, the parish of Santa Maria Maior, a territory that integrates the perimeter of Baixa Pombalina, lost 22% of its inhabitants, s stated in the Census 2021. It was the second parish in the city loosing people, right after Misericórdia (Bairro Alto), which lost 26% of its resident population.

The downtown area is also losing stores and commerce, despite being full of people day after day. After Bairro Alto, in Misericórdia, and Alfama, in Santa Maria Maior, Baixa Pombalina is home to one of the largest areas of Air B&B and it is where the biggest concentration of hotels in the city is.

The names of the streets had a commercial cause: the goldsmiths in Rua do Ouro, the fabrics in Rua dos Fanqueiros or the shoemakers in Rua dos Sapateiros. Today this is no longer the case. The commerce has changed, the street names no longer help in the task of finding a particular trade…, but the stores continue to make downtown Lisbon a place of commerce and consumption.

Before the arrival of the Hotel da Baixa to Rua da Prata, along the façade now occupied by the hotel unit were six stores. Today, there is only one hotel restaurant here. Photo: Inês Leote

The commercial fabric change is a inevitability, Pedro Guimarães tells us. He is a researcher at the Centre for Geographical Studies (CEG) at the University of Lisbon, a specialist in commercial gentrification and commercial planning policies, and believes that there are shopkeepers being “pushed out”, mainly by population changes and rising rents.

He describes the current situation: “Even if the stores remain, they change their products and end up excluding the local population. It is in here that commercial gentrification is framed, naturally associated with a general change in commerce, from traditional or local commerce to a more refined commerce oriented to a new public, more expensive.”

“A process of housing and commercial gentrification implies, in the commercial case, the replacement of a certain type of commerce by another. In the case of the Baixa, the activities associated with the trade of goods and services intended to serve certain purposes have been replaced by stores that serve a tourist public and by large chains and brands with economic power.”


How can we solve the commerce problem in the downtown area?

In 2021, we reported that 60 stores had close in Prata and Ouro Streets. In the downtown area as a whole, the Downtown Dynamization Association summed up more than 110. While more hotels are preparing to open in Baixa, the question is whether their opening will mean, once again, the closing of more stores.

Does it really have to be this way?

The growing value of rents will also be a problem: “We’re talking about values today, in downtown Lisbon, of seven, eight or ten thousand euros per month,” says Carla Salsinha.

“If we count the 12 months per year, only with what has to be paid in rent, if they are not big groups or big chains, it is not easy for a street commerce, of passage”.


Pedro Guimarães considers that Lisbon’s downtown area has become a “totally monofunctional” territory, in its tourist orientation. “It is a space of consumption,” he says. There is no space to sit, besides the terraces.

The crisis, though, goes back to more than two decades ago, where Baixa started to decline “due to the commercial transformations of the 1990s, the opening of shopping centers and big supermarkets. All of this led to the decline of downtown commerce.”

He criticizes the “deregulation” and defends a new commercial census of the city, so that the result of the information collected can inform new instruments of action in the area.

A commercial development charter?

Pedro Guimarães suggests the creation of a commercial regulation charter, a document that would define the nature of commerce to be opened in each building, as is already done in Cardiff, capital of Wales.

In Portugal, this is something that has been talked about “for decades”. But nothing has been done.

The role of the plan: PDM

The municipal Plan could regulate things. Paulo Pais, the architect which headed the Lisbon City Council’s urban planning department until June 2022 explains how the guiding documents of the city’s urbanism, such as the Municipal Master Plan (PDM) or the Detailed Plan, can help define the uses of each street and even the floors of the buildings.

“The PDM can define that in certain streets or in certain axes the ground floor can only be destined to a certain use, or it can, in general, say that for the sake of protecting a certain use, changes of use are not allowed,” says Paulo Pais. In the case of Lisbon, this doesn’t happen.

In Baixa there is another plan: the detailed of Baixa Pombalina. It is a protected area. But… this plan allows “the total allocation of existing buildings to a single use, namely housing, services, trade or equipment,” reads article 17 of the document.

It need not to be ke this: according to Paulo Pais, this document could “create safeguard rules for existing commercial areas, not allowing changes of use. But it doesn’t. Because “it is already quite old, and needs to be revised”.

“It is clear that it is not indifferent that, in a street with a commercial character, suddenly all the commerce is suppressed in one part of it. This substantially changes the character and the experience of the street”.


The case of Florence

In the specific case of hotels, Paulo Pais points to the example of the Italian city of Florence. In the central and most touristic area, “the hotel lobby is not on the ground floor, it’s on the second floor, precisely because there is a logic of safeguarding local commerce. It might be a good principle to be considered in a future amendment to the downtown plan,” he says.

In Portugal, “there must at least be an evaluation of what was the result of the city’s evolution”. When the urban Master Plan is revised, “the new dynamics of transformation of the city, which were not at the basis of the preparation of this PDM, should be taken into account”, Paulo Pais says.

This is precisely what Carla Salsinha claims. When the city’s Plan is open for discussion, the impact of the hotel industry on commerce in the Baixa “is one of the things that the Union will take to the debate. We need to hve some kind if safeguard, for the sake of balance. The hotels themselves can even rent the stores at whatever price they want. And this cnnot happen”.

For now, with rent values on the rise and new hotels under construction – and others already approved – the future of downtown commerce remains at risk.

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