Market Report

Portugal Market Overview 2019

For the last 20 years, Portugal has been making improvements to its tourism sector and, after considerable effort, is finally getting the desired result. The Portuguese tourism sector has grown since 2011 by more than 10%, growing not only in overnight stays, but also in the number of source markets, at the same time as losing its historical dependence on the British market.

Portugal’s tourism strategy has been based on government stability, implementing this strategy discreetly and taking advantage of the media coverage generated by the tourism industry of its Spanish neighbours.

The increase in the number of hotels, the campaigns to improve existing properties and the enrichment of the tourist offer (nature, cultural & religious heritage, sports, luxury to name a few) have been three key objectives.

Tourism Growth and Economic Impact 

  • Tourist Arrivals: International tourist numbers increased by 67% between 2010 and 2016, with overall tourism levels rising by 40%. By 2018, Portugal received over 21 million tourists annually. 
  • Employment: The tourism sector generates employment for more than 1.15 million people each year. 
  • GDP Contribution: Tourism’s contribution to GDP exceeded 20% in 2018, doubling the results from 2015 and showing a 25% increase compared to Spain. 

 

Key Market Indicators (2018) 

  • Visitors: 21.05 million, with 12.7 million being international tourists. 
  • Overnight Stays: 57.6 million, with 69.4% by foreign tourists. 
  • RevPAR: €52.50 overall, with hotels at €56.90 and apartments at €50.2. 
  • Income: Total revenue of €171 million, with accommodation accounting for €114.6 million. 
  • Employment: Over 1.15 million direct jobs created annually. 

 

Major Tourist Areas 

Lisbon 

  • Ranking: 62nd in the Top 100 city destinations in 2018, up 11 places from 2017. 
  • Visitors: 3.79 million arrivals in 2018, a 7.6% increase from 2017. 
  • Overnight Stays: 14.49 million, with 77.9% by foreign tourists. 
  • RevPAR: €89.22 overall, with 5* hotels at €124.60. 
  • Occupancy Rate: 79.8%, with 4* and 3* hotels achieving over 84% and 83%. 
  • ADR: €111.76, with a significant differential between 5* and 3* hotels. 

Porto 

  • Ranking: 96th in the Top 100 city destinations in 2018. 
  • Visitors: 1.6 million tourists in 2018, making it the 3rd most popular area in Portugal. 
  • Overnight Stays: 5.2 million in 2018, up by 5.2% from 2017. 
  • RevPAR: Increased by over 10% from 2017 to €77.5. 
  • Occupancy Rate: 76.7% in 2018. 
  • ADR: Reached €100 in 2018, up from €92 in 2017. 

Algarve 

  • Income: Over €1 billion in tourism income in 2018, a 4.7% increase from 2017. 
  • Visitors: 4.2 million in 2018, up by 1.5% from 2017. 
  • Overnight Stays: 18.8 million, a slight decrease from the 19 million in 2017. 
  • RevPAR: Increased from €53.4 in 2017 to €54.2 in 2018. 
  • Occupancy Rate: Slightly decreased to 65% in 2018. 
  • ADR: Increased by 2.9% in 2018 following a 10.5% increase in 2017. 

 

Tourism Demand 

Portugal’s strategy to diversify its tourism markets has reduced its reliance on the British market, with notable increases in visitors from Spain, France, and Germany since 2012. The country has also seen growth from Canada, Poland, the USA, and Brazil. However, some key markets such as the UK, Germany, Spain, and the Netherlands have shown a decreasing trend between 2013 and 2018. 

 

Hotel Supply and Development 

  • New Hotels: From 2015 to 2018, 256 new hotels were licensed, increasing the hotel inventory by over 24%. In 2018, 81 new hotels opened, mainly in Lisbon and Porto.   

Hotel Statistics: 

  • Total chain hotels: 336 
  • Total chain rooms: 43,069 
  • Average size per chain hotel: 128 rooms 
  • Overall supply: 1,309 hotels with 98,960 rooms 
  • Average size per hotel: 76 rooms 
  • Chain penetration: 26% by hotels, 44% by rooms 
  • Total brands: 45 (19 domestic, 26 international) 

Pipeline: 87 new hotels with 9,012 rooms are expected to open soon, with Lisbon receiving 32.3% of these rooms. This will result in a 9.9% increase in hotel rooms and a 6.7% increase in hotels in Portugal. 

 


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