According to a new report from Horwath HTL, Portugal’s tourism sector has grown more than 10 percent since 2011, not only in overnight stays but also in the number of source markets.
Between 2010 and 2016 the number of international tourists increased 67 percent while the level of tourism in general improved 40 percent. The country now receives more than 21 million tourists annually.
The report showed the boom in Portuguese tourism has turned the travel sector into one of the main drivers behind the country's economic recovery.
Two of the key objectives of Portugal’s tourism strategy include the increase in the number of hotels and campaigns to improve existing properties, noted Horwath.
Expanding Demand
Portugal has historically been a British tourism destination. Due to the instability surrounding Brexit, the country has focused its tourism promotion on diversification. As a result, tourism to Portugal from countries such as Spain, France and Germany has increased notably since 2012, the report claimed.
While this strategy brought in higher visitor numbers from Canada, Poland, the UAE and Brazil, visitor numbers from the U.K., Germany, Spain and the Netherlands have declined during 2013-2018.
Supply
In 2017, the Portuguese Tourism Minister announced the construction of 40 new hotels and the restoration of 30 historic buildings, such as palaces and convents, to convert them into hotels. The Revive program has made historic public properties available for private investment with a focus on hospitality. This initiative is a joint effort of the Ministries of Economy, Culture and Finance, with the support of the Portuguese Tourism Authority (Turismo de Portugal), to promote the restoration of public properties and boost the growing tourism sector. Since the project began, 17 public tenders have been launched and investors have acquired seven projects for a total of €54 million, according to the office of the Ministry of Economy. In August, 15 new monuments and historic sites were added to the list of properties, including forts, palaces, convents and schools and a former government office in the middle of Lisbon. The complete list now has 48 properties available for development. The first property to open under Revive was the Vila Galé Collection Elvas, a conversion of the former São Paulo Convent in the historic center of the Alentejo city of Elvas.
Between 2015 and 2018, 256 new hotels were granted licenses, which constitutes a significant number of new properties. During this period, hotel inventory increased by just over 24 percent, the report noted.
In 2018, 81 new hotels opened across Portugal, primarily in the metropolitan areas of Lisbon and Porto, where investors and operators currently want to focus their attention.
Pipeline
Some 87 new hotels are scheduled to open “soon” across Portugal for a total of 9,012 new rooms. This will be a 9.9 percent increase in rooms, and a 6.7 percent increase in hotels. Lisbon is expected to get 32.3 percent of these rooms, giving the city 35 percent of Portugal’s total hotel assets and remaining the main target for development.
According to a recent Lodging Econometrics' report, Portugal’s total hotel-construction pipeline has 119 hotels and 11,733 rooms. Lisbon alone has 39 hotels and 3,293 rooms in construction.
Global companies are paying attention and looking to gain footholds in the country, particularly in Lisbon. In May, an affiliate of Hyatt Hotels Corp. entered into agreements with Realtejo-Hotelaria e Turismo, S.A., an owned subsidiary of United Investments Portugal and Fibeira, to develop the Hyatt Regency Lisbon, the first Hyatt-branded hotel in Portugal. The property is due to open next year. Around the same time, Germany’s Commerz Real Capital Management Co. purchased the DoubleTree by Hilton Lisbon, Fontana Park in Portugal for an undisclosed price, and Hilton also announced plans to bring its Curio Collection soft brand to the country’s capital through a franchise agreement with Goldenflamingo Ida, a Portuguese real estate and asset-management company.