In many of Portugal’s major cities, public spaces have become venues for demonstrations demanding more affordable housing. Tourism is often seen as a key contributor to various urban challenges, with critics pointing fingers at real estate developers who prefer the profitability of tourist accommodations over providing residential options for the middle class. Additionally, local and central authorities are often criticised for favouring these interests.

Portugal has seen sustained growth in tourism, fueled by the increasing international recognition of its unique value proposition and substantial investment in the sector.

The 2023 edition of the Portugal Hotels & Chains Report offers an extensive analysis of the dynamic hospitality industry in Portugal, emphasizing the remarkable post-pandemic recovery and the challenges faced by the sector. The report also highlights the increasing interest from international investors and the leading role of domestic hotel chains. Portugal is a vibrant hospitality market, contributing over 40 billion Euros to the economy, almost 16% of GDP. Portugal is also unusual in that the top hotel chains are locals, for those of you following our Chains Reports across Europe, beating Accor into third place is highly unusual. Over the last year, a remarkable post pandemic resurgence is evident. Robust demand has propelled most markets to exceed pre-pandemic levels, allowing for unprecedented rate increases that have pleasantly surprised property owners.

A very warm welcome to this latest country edition of the Hotels & Chains report which provides a snapshot of a fascinating moment in hospitality. Will we see the direction of the industry change forever? When we wrote the last edition, we had no idea that global events would cause such chaos in a market that had seen unprecedented success in 2019. Needless to say, the events of the last 20 months have thrown the ownership and performance of the hotel industry into sharp focus, exacerbating friction between owners and operators, putting pressure on lenders, making development debt something of a mirage and laying waste to the best-laid plans of many giants in the industry. International hotel chains and brands have turned their attention to Portugal focusing primarily on Lisbon and Porto as the main urban destinations. The pipeline is almost exclusively centred on 4* and 5* hotels improving the overall positioning of the country’s hotel supply.

Horwath HTL has analysed over 1,300 hotel owning companies to identify the characteristics of the main players in the market and how the ownership landscape is structured. Foreign investment has been growing significantly, but most hotels are still owned by Portuguese companies. Recent years have seen a growing trend. Most of the acquisitions were by international institutional companies, which indicates a future transformation of the Portuguese ownership landscape, resulting in greater consolidation of the market.