Christie & Co unveils new report on the Portugal hotel market, revealing trends and investment opportunities

The report analyses the evolution of the hotel market in Portugal, focusing on the nine regions that make up the country and exploring ambitious infrastructure investment plans, trading performance, and the impact of wider economic activity.

Compared to previous reports on the Portugal Hotel Market, in 2024 the analysis of tourism data has been conducted according to the new Nomenclature of Territorial Units for Statistics (NUTS) 2024, which now are grouped into nine new NUTS II territorial units: Norte, Centro, Oeste, Greater Lisbon, Setubal, Alentejo, Algarve and the Azores and Madeira islands.

According to the report, the country registered over 77 million overnight stays in 2023 with demand levels comfortably exceeding 2019 by 10%. Revenue per Available Room (RevPAR) in 2023 reached €64.8, the highest ever recorded, which represents an impressive 31% increase compared to 2019. This outstanding progression continued in 2024, with YTD July 2024 achieving another 7% surge on the same period in 2023.

After a general recovery from the pandemic in 2023, the average daily rate (ADR) continued to rise across all nine regions in the first half of 2024. Significant increases in supply over recent years, however, have hindered the full return of occupancy in many destinations.

The ambitious infrastructure investment plans across the country, aimed at enhancing intra-connectivity, international accessibility, and optimising the country’s energy mix, are met by the advances in green energy production, with Portugal generating almost 35% of all energy consumption from these sources in 2022, positioning itself as a frontrunner in the global transition to a more sustainable future.

Looking forward, the country's robust, active hospitality pipeline is forecast to total over 10,000 rooms in the next four years, i.e. circa 10% of the current stock. This growth will be primarily driven by international brands, which are now exploring beyond the key hubs of Lisbon, Porto, and the Algarve, to support the emergence of secondary destinations. Whilst the report identifies some of the tremendous strengths of Portugal and its regions, it also highlights some of the marked differences in trading behaviour, demand sources and short to medium term outlook.

In conclusion, the Portuguese market continues to demonstrate resilience and a strong determination to further establish itself as a European landmark destination and an attractive contender for hotel investment, through a positive combination of its macro-economic conditions, competitive development and operating costs together with a continuous evolution of its trading and branding landscape.

Pierre Ricord, Head of Consultancy – Hotels at Christie & Co, comments, “Despite its historical presence amongst the preferred choices of many European travellers for short breaks and holidays, the transformation of the Portuguese economy, its tourism industry and fast evolving offering in the established destinations but also beyond, are all positive factors to place the country higher up on the leaderboard of hotel investment and development hotspots.”

Nicolas Cousin, Managing Director of Christie & Co in Spain and Portugal, says, "The relatively small transactional market of Portugal is poised to offer many more opportunities for international investors over the foreseeable future, as the volume and quality of the hotel stock increases, the range of destinations widens, and hotel trading further strengthens. This transformation may, along the way, cause some short-term disruption as the concentration of pipeline in some areas may temporarily outpace demand.”

Alberto Martín, Director of Investment in Spain & Portugal, adds, “Portugal is gaining momentum in terms of hotel investment, exceeding 550M in the first half of this year. This investment has been channeled not only into operational assets but also into repositioning assets to regenerate supply. It is worth noting that this investment has not only focused on the leading destinations but has also started to flow to secondary destinations where investors have seen the potential they offer. Moreover, international brands have shown great interest in establishing their brand portfolios, which supports the attraction of global customers from the economy segment to the upper scale.”

You can also find this report online here.

For further information on this press release, contact:
Jasmine Davis, Corporate Communications Manager
P: 07561 115179
E: jasmine.davis@christie.com