In 2021, Portugal already had more hotel rooms per km2 than Spain and France. Consultant Neoturis predicts that of the 186 projects underway, around 150 will open by the end of 2026 due to delays.
Tourism has made a strong comeback since the pandemic and in 2023 all records were broken in the sector. It’s a momentum that isn’t likely to slow down in the coming years and is accelerating investment in hotels. And this is reflected in the fact that over the next three years, around 150 hotels will be built in Portugal, which is “the largest three-year pipeline ever”, Neoturis, a consultancy specializing in tourism, told ECO.
This figure is the result of the 186 construction projects that have already been signaled to open by the end of 2026, bringing an additional 18,446 rooms to the market. However, with “delays in licensing, changes to the project, delays in the work, technical difficulties and financing”, there will be “changes to the planned opening dates”, predicts Luís Pedro Costa, a partner at Neoturis, to ECO, who therefore predicts that the number of openings will be around 150.
Given this scenario, Portugal already has more hotel rooms per square kilometer than Spain or France, the consultancy also points out. Based on data from the World Tourism Organization’s (UNWTO) World Tourism Barometer, in Portugal in 2021, still during the pandemic phase, there were 182,789 hotel rooms on the market, which resulted in a ratio of 1.9837 rooms per square kilometer.
In Spain, in the same year and based on the same barometer, there were 941,030 rooms, resulting in a ratio of 1.8878 rooms per square kilometer (below Portugal).
France, on the other hand, is well below Portugal in both ratios. In France, 652,953 rooms were identified, resulting in a ratio of 1.2004 per square kilometer.
“We are aware that, like Spain and France, we have several well-developed tourist regions. A regional analysis with more indicators, such as hotel rooms per number of dwellings, could be interesting in understanding where new hotels should be encouraged and where the renovation of existing hotels should be more encouraged,” says Luís Pedro Costa.
But despite these figures, Neoturis believes that “when the sector’s performance is robust and sustainable” economically, “there is always room for new hotels”, stressing that the Mais Habitação package, “which is already causing the closure of Local Accommodation”, ending up “removing this offer from the market”, ends up making room for the opening of more hotels, benefiting “the national hotel industry”.
However, the consultant does point out some concerns about the growth of hotels. There are, “of course, the negative externalities that new hotels always bring, no matter how great the commitment to sustainability is, and it is being; there is the essential question of water, or the lack of it,” as well as the risk of saturation of the “carrying capacity of beaches and historic centers”.
“The lack of human resources in this area is also a concern,” despite the fact that in recent years there have been “significant increases in salaries and thus a greater dignification of the sector’s professions,” stresses Luís Pedro Costa, who also points out that there is “always the opportunity to attract labor from other countries, which has a positive impact on the birth rate and the sustainability of Social Security,” but “this labor force has to be trained in the Portuguese art of hospitality, otherwise there will be a de-characterization of the hotel offer.”
Portugal on the route of the biggest hotel chains
The growing demand from tourists for Portugal, especially among Americans and Canadians, who were the guests who increased the most in 2023, is increasingly putting the country on the route of the world’s biggest developers and hotel chains. “Any one of the 50 largest international companies is either already in Portugal, is planning a hotel in Portugal or has already analyzed an opportunity in Portugal,” says Luís Pedro Costa.
Among the developers, this is the case of the Canadian group Mercan, which has been stepping up its investment in the country, with plans to build eight more hotels with an investment of 450 million euros. But also the Americans from Highgate, who last year opened a company in Portugal to manage the 18 hotels they bought from banks through the Crow portfolio.
In addition, the British Arrow group has settled in Portugal to make major investments in hotels. This is the case with the purchase of six Dom Pedro hotels and five golf courses for 250 million euros, the Palmares Ocean Living & Golf luxury resort in Lagos, with an investment of 400 million euros, or the Vilamoura revolution with a total investment of around 1 billion euros, with several tourist apartment complexes and a hotel.
For this reason, the consultant predicts, “it is to be expected” that “new hotel brands” will emerge in Portugal to manage the new units, with chains such as Hilton and Marriott “managing to expand their portfolio through their various sub-brands”.
Among the various areas of the country, of the 186 projects underway for completion in 2024, 2025 or 2026, the largest share is located in the Porto and North region with 68 new hotels with 6,381 rooms. Of this total, 35 are in the city of Porto.
This is followed by the Lisbon Metropolitan Area, where there are 54 new hotel projects underway with 4,813 rooms, 43 of which are located in the city of Lisbon. In the Algarve, 22 new hotels with 3,649 more rooms are in the pipeline, in the Center another 12 and in the Alentejo 16. On the islands, Madeira could have six more hotels by the end of 2026 and in the Azores there are eight new projects.