Portugal’s hotel market has a strong development pipeline, as investors see consistent growth in the country’s tourism sector. A report from agent Christie & Co details the opportunities, and the development pipeline in the country.
Around 70% of hotel demand in Portugal is driven by overseas visitors. The main source markets are the UK at more than 12%, ahead of Germany, France, Spain and the USA. Helping to drive development of the country’s hotel sector, and to focus minds, is the country’s joint hosting of the FIFA World Cup in 2030.
Improving infrastructure
Visitors will find a country that is easy to get around, with a number of infrastructure projects live, or planned. A high speed rail line between Lisbon and Porto is due for completion by 2030, to be followed by installation of a new line from Madrid to Lisbon, which is likely to boost the volume of Spanish visitors. And for the Lisbon region, a new airport should be open by 2034, providing improved capacity and connectivity for the area.
The Portuguese market has a preponderance of luxury hotels, with the four star segment accounting for 47% of supply, and the five star segment, at 20% yet growing as more international luxury brands look for a presence. Christie says economy brands, too, are driving into the country notably in hubs such as Lisbon, Porto and Funchal.
According to research by Christie, over the next four years the Portuguese hotel inventory will increase by around 10%, adding more than 10,000 rooms. Close to 70% of these new arrivals will trade under international hotel brands. Hilton will add more than 1,000 rooms in eight new hotels, with Marriott building a similar number of rooms in seven properties. Spanish group Melia is looking to expand its business too, and will open five more hotels across the country.
The vast majority of new hotels will arrive in three key regions of the country – the greater Lisbon area, Norte and to the south, the Algarve. However, the dominance of these regions is reducing, as hotel investors look to other destinations such as Setubal and Alentejo to attract new visitors.
New development will drive up standards, says Christie. And that, in turn, will force those investors holding more mature hotel stock to review their portfolios and refurbish properties to match those rising standards.
More international brands arrive
Among the pipeline of new arrivals will be The Social Hub, expected to open in Porto’s Bonjardim district in the first half of 2025. The 310 room development will include a rooftop bar and pool, plus 39 apartments designed to suit those needing a longer term stay. The brand is planning a second site in Portugal, The Social Hub Lisbon Carcavelos which will open in 2027.
Over the coming year, the Lisbon area will see a wide range of new international brands arrive. These include Moxy, Nobu, Six Senses and Hyatt’s Andaz.