Portuguese hotel market continues to grow and plans to generate 10,000 new rooms in four years

Portugal is experiencing a great moment for hotel investment. According to Christie & Co's latest report, around 10,000 rooms will be created over the next four years, around 10% of the current supply. Growth will be driven mainly by international brands, which are now looking beyond Lisbon, Porto or the Algarve to support emerging destinations.

The Portuguese market continues to demonstrate resilience and a great determination to continue consolidating itself as a reference European destination and an attractive competitor for hotel investment;The Hotel Industry, thanks to a positive combination of its macroeconomic conditions, its competitive development and its operating costs, together with a continuous evolution of its commercial and brand landscape.

Christie & Co's report looks back to 2023, a year that saw more than 77 million overnight stays, with demand levels exceeding 2019 by 10%. Revenue per available room (RevPAR) reached 64.8€, the highest level ever recorded, representing an extraordinary 31% increase compared to pre-pandemic figures.

The strong progress continues in 2024, with a 7% increase through July 2024 compared to the same period of the previous fiscal year. Following the general recovery from the pandemic, the average daily rate (ADR) continued to increase in all nine regions during the first half of the year. However, the significant increase in supplyin recent years has hindered the return of occupancy in many destinations.

This good performance of the hotel sector is due in part to ambitious infrastructure investment plans throughout the country, aimed at improving connectivity, international accessibility and energy optimization.

Compared to previous reports on Portugal's hotel market, the analysis of tourism data in 2024 has been carried out according to the new Nomenclature of Territorial Statistical Units (NUTS) 2024, which are now grouped into nine new NUTS II territorial units: North, Center, West, Lisbon, Setúbal, Alentejo, Algarve and islands, Azores and Madeira.

Pierre Ricord, Head of Consultancy – Hotels at Christie & Co, explains that, “the transformation of the Portuguese economy, the tourism industry and the rapid evolution &ldquoacute;

All these factors, among others, are positive for placing the country in one of the highest places in the ranking table of hot spots for hotel investment and development;

For his part, Nicolas Cousin, General Manager of Christie & Co in Spain and Portugal, said that "Portugal's relatively small transactional market is ready to offer many more opportunities for the future; poised to offer many more opportunities for international investors in the future as the volume and quality of hotel stock increases, the range of destinations expands and the sector becomes even stronger.