The hotel sector in Portugal is expanding again thanks to the interest of international investors

Source: revistaport.com

Tourism in Portugal is recovering from the Covid-induced slowdown and surpassing previous records. A recent study by Global Asset Solutions reports that Portugal will receive 30 million tourists in 2023, with over 28.4 million tourists expected in 2022.

This resurgence in tourism has significantly boosted the country's hotel market, with overnight stays returning to pre-pandemic levels (99% of 2019) by 2022, according to the study. RevPAR (Revenue Per Available Room) surpassed 2019 values, reaching 50 euros (54 dollars) in 2022 and 56 euros (61.14 dollars) in 2023, representing a growth of about 14%. This impressive recovery continued in 2023, with RevPAR increasing by another 22.3% year-to-date through July, to €60.6 (US$66.17). The country's cultural heritage, natural landscapes, and well-known tourist destinations attract tourists, making it a competitive tourist market in Europe.

113,000 rooms in Portugal are mostly in the 3-star category, the study concluded. The industry is gradually shifting towards luxury hotels, while lower-rated accommodations are decreasing. It also highlights the interest of international investors and brands in the market.

The country's hotel market attracts investors, with more than 11,000 rooms at various stages or in planning. This represents a changing landscape, with a 14.8% increase in supply in the Lisbon region, including 4,600 rooms under construction or in planning. Lisbon is expected to register the highest growth of new rooms in 2024.

The Portuguese tourism industry can be divided into seven regions – North, Center, Lisbon, Alentejo, Algarve, Madeira, and Azores. The three main regions – North, Lisbon, and Algarve – account for 70% of the country’s total overnight stays and show the best RevPAR, although Madeira has the strongest RevPAR compared to the North.

Brand presence is expanding, with branded hotel rooms representing more than 50% across the country. Hotel investment has seen a significant resurgence since the pandemic. The total transaction volume in 2022 exceeded the record value of 2019 of 1.2 billion euros (1.31 billion dollars), more than double the value three years ago. The fourth quarter of 2022 notably recorded the highest quarterly sales volume ever, totaling nearly 900 million euros (982.74 million dollars). Quarterly sales in the second quarter of 2023 increased by 60% year-on-year, totaling €273.7 million (US$298.86 million).

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