Welcome to the 2023 Portugal Hotels and Chains Report, a comprehensive exploration of the dynamic hospitality industry in Portugal.
This report delves into the unique opportunities and challenges facing this flourishing market, offering valuable insights.
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.
However, global issues have introduced formidable challenges in Portugal as well. Inflation, exacerbated by the Ukraine conflict, has soared into double-digit figures. Coupled with energy supply shocks and staffing woes, this inflationary surge has exerted unprecedented strain on hotel operating finances. Central banks’ efforts to combat inflation through interest rate hikes have disrupted development projects and banking institutions, leading to a decade-low in transaction volumes as buyer-seller expectations diverge.
Despite these trials, confidence in the Portuguese hospitality industry remains unwavering. Development pipelines are robust, paralleled by sustained travel demand. As long as these factors persist, the industry will continue to evolve and thrive.
