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.

Portugal, defined as a European destination of excellence, won the seal of Best European Destination for the fourth consecutive year by the World Travel Awards 2020. According to European Best Destinations, Portugal is considered the Best Country to visit in Europe in 2021, highlighting the beauty of the landscapes, the gastronomy, the “magnificent beaches” and the historical wealth of Portugal, marked by the historical heritage classified by UNESCO. In 2019, after reaching an exceptional 27.1 million guests and 70.1 million overnight stays, and with total hotel revenues growing since 2015, tourism declined in 2020, dragged down by the effects of the COVID-19 pandemic. Despite a scenario of falling tourist activity, the expectations for recovery are strong as a result of Portugal’s international image as a sustainable and safe tourist destination.