Portugal has been described as a “leading contender in real estate investments” by industry sources such as Hospitality Investor, thanks to a sector report that placed the Iberian nation fifth in a European ranking based on new hotel openings, with Lisbon third among developing city destinations, last year.
The “Europe Hotel Construction Pipeline Trend Report Q2 2024” provided an analysis by Lodging Econometrics (LE). It found 1,100 new hotels were set to open in Europe by 2026 and that a total of 1,680 projects would unlock nearly a quarter of a million (249,454) rooms by the second quarter of 2024.
Fifth as a country, third as a capital
With 14,247 of those rooms in Portugal, across 114 new hotels, the report said Portugal sat behind the United Kingdom (306 projects/43,515 rooms), Germany (178 projects/28,637 rooms), France (120 projects/12,831 rooms) and Türkiye (117 projects/17,856 rooms) in the rank order of new hotel real estate.
At the time of the report, Lisbon had 36 projects on the go, ready to bring 4,425 new rooms to the market, putting the Portuguese capital only behind London, United Kingdom (76 projects/14,954 rooms), and Istanbul, Türkiye (50 projects/8,397 rooms).
Similarly, Visit Portugal has now said more than 110 hotels will open their doors by 2027, offering more than 11,100 new rooms.
Why is Portugal’s tourism sector booming?
That impressive performance put in by Portugal, which also saw room supply grow over 14% in 2023, has been attributed to a combination of state support and the surging popularity of the coastal republic with visitors.
“Portugal’s government has made a concerted effort to back tourism in recent years, with a new visa regime, tax incentives for investors and investment in infrastructure, including a new airport in Lisbon and a high-speed train line between Lisbon and Madrid,” David Bóveda, hotel asset manager at Global Asset Solutions, told Hospitality Investor. “This focus has paid off and the country is one of the most attractive destinations to overseas visitors in Europe, bringing with them international investors eager to capitalise on this active market.”
Majority of new rooms to be upper midscale and above
The LE report also notes that most of the new European rooms are classed as “upper midscale” and above, and in Portugal the charge is being led by big name brands, with over 70% percent of Lisbon rooms owned by international groups such as Accor and Meliá, which account for over 17% between them.
While particularly so in Lisbon, the North and the Algarve, according to Global Asset Solutions, the investment outlook looks sunny over all of Portugal’s seven regions and comes amid significant growth in hotel real estate across Europe.
