Leading Spanish Hotels Invest in Portugal
Portugal has emerged as an attractive destination for high-net-worth investors in the hotel real estate sector in 2025. The country's strong tourism fundamentals, expanding international visitor numbers, growing domestic travel demand, and stable economic conditions have contributed to the robustness and resilience of the Portuguese hotel market.
The hotel investment volume surged to €331 million in the first half of 2025, with projections by CBRE and others indicating that the full-year investment could exceed €600 million.
Key reasons for Portugal’s appeal to wealthy investors include:
- Strong tourism growth: A record number of tourist arrivals, with visitors from North America increasing their average stay length to 7 nights, up from 5.8 the previous year. Domestic tourism also surged, with resident trips up 16% year-on-year in early 2025, supporting local hotel demand.
- Resilient hotel performance: Occupancy rates near 70% allow hotels to lift average daily rates to around €84 without sacrificing demand, indicating a healthy revenue environment.
- Favorable economic and regulatory environment: Portugal’s stable political climate, EU membership, growing airline connectivity, and steady GDP growth forecasts (around 1.8% in 2025 and 2.2% in 2026) enhance investor confidence.
- Diverse investment opportunities: Besides prime coastal and city locations, there is increased interest in regional cities and underdeveloped tourism corridors, where investors find flexible-use assets and opportunities tied to shifting traveler behavior, including business travel growth.
- International capital dominance: Most hotel investments come from overseas, reflecting strong foreign investor confidence in Portugal’s hospitality sector despite higher borrowing costs and geopolitical risks.
The Portuguese hotel market demonstrates robustness and resilience, consolidating its position as one of the most attractive investment destinations in Europe. Spanish family offices have shown a growing appetite for assets in prime locations in Portugal, focusing on long-term strategies. JLL confirms continued investor interest in the hotel sector in Portugal, reflecting the robustness of the Portuguese tourism market.
In summary, the projected hotel investment volume for Portugal in 2025 is over €600 million, driven by international investor demand, a buoyant tourism sector, and a vibrant commercial real estate market positioned for continued growth in both domestic and international visitor segments. Portugal appears at the top of European investors' preferences for the first time, according to CBRE.
- Wealthy investors are increasingly attracted to the Algarve region in Portugal due to its booming tourism sector, as evidenced by the record-breaking number of tourist arrivals in 2025.
- The thriving tourism industry in Portugal creates a conducive environment for real estate investments, with a significant portion of hotel investments coming from overseas, indicating growing international confidence in Portugal's hospitality sector.
- Portugal's appeal to domestic and international tourists is further enhanced by the country's favorable weather, providing an excellent backdrop for sports activities and leisure, contributing to the growth of tourism-related businesses and real estate development.
