The Portuguese government introduced a digital nomad visa on 30 October 2022 and in just a few months it has already received over 200 applications.
Attractive proposition
According to the The Portuguese Ministry of Foreign Affairs, the remote workers who have been granted the visa come from the USA, United Kingdom and Brazil. The government body believes Portugal is attractive for remote workers due to the abundance of work hubs, warm weather, low cost of living and connections to major EU capitals.
With two visa categories available, encompassing both remote workers aiming for a temporary stay of up to one year or digital nomads looking for a residency visa in Portugal, hotel developers may do well to consider more extended stay properties with co-working facilities for their future projects.
Major moves
There have recently been major moves in the Portuguese hotel market anyway, with a consortium comprising investment management firm Davidson Kempner Capital Management, and real estate companies Highgate and Kronos completing the acquisition of Portuguese investment manager ECS Capital, in a deal estimated to be worth €850 million.
The transaction includes the acquisition of two funds managed by ECS, as well as some additional Portuguese companies, whose assets comprise 65 hospitality, residential and commercial properties predominantly located across the Algarve region. This includes 18 hotels such as Vale do Lobo Golf & Beach Resort and Conrad Algarve Hotel in Quinta do Lago. The consortium is promising to invest in and grow the platform and asset portfolio over the coming years.
Highgate itself also launched operating platform HG Portugal at the beginning of this year, beginning with a portfolio of 18 hotels spanning the Algarve, Lisbon, Porto, and several other markets throughout the country. The is platform designed to optimise operational efficiencies, distribution, and hotel concept development.
Premium pipeline
Across Portugal as of now, there are already at least 66 high end hotel projects underway, constituting over 10,000 keys, according to the THP database.
Of these developments, the upscale segment dominates 70% to 30% over luxury builds, with 46 and 20 constructions respectively.
Opening rates will remain steady over the next couple of years, with at least 21 additions expected both in 2023 and 2024. This figure is currently due to drop in 2025 to just five sites, with the remaining 19 hotels either due to open further into the future or have yet to be designated a delivery date.
Lisbon leader
Capital city Lisbon is far and away the leading destination in the premium hotel pipeline, with a minimum of 23 forthcoming projects. In a distant second is Porto with nine sites, while completing the podium is Lagos and Vila Nova de Gaia, with three developments apiece.
Melia Hotels International’s Melia Hotels & Resort brand is at the forefront when it comes to forthcoming developments, planning three projects. Hilton Worldwide is also active in the region, with at least two Hilton Garden Inns planned alongside a further pair of Curio Collection sites.
Hilton pair
Two of the Hilton group sites are Lagos Marina Hotel, Curio Collection by Hilton and Hilton Garden Inn Lagos, both expected to open in summer 2024 in Lagos, within the Algarve region. This pair came about as a result of an agreement with Portugal-based real estate firm Mercan Properties Group.
Lagos Marina Hotel, Curio Collection by Hilton will have 180 rooms, distributed among four floors, in a total gross area of 14,776 sq m. The site will feature a restaurant and two bars, one of which will be found on a rooftop terrace complete with infinity pool. It also boasts a second pool on the ground floor as well as spa and fitness facilities.
Hilton Garden Inn Lagos will have 90 rooms, 27 of which will be converted into suites with a kitchenette, in a total gross area of 7,505 sq m. The hotel will offer comfortable rooms and suites with kitchenettes. A multi-functional lobby will feature a bar, restaurant and a 24-hour self-service shop. Other amenities will include fitness facilities and an outdoor pool.
