Portugal’s hotel sector has wrapped up the summer of 2025 with a solid and stable performance, boasting an impressive national average occupancy rate of 81%. According to the latest survey by the Hotel Association of Portugal (AHP), the industry managed to match last year’s occupancy rates while pushing the average room price up to €161, compared to €158 in 2024. This “Summer Balance & Autumn 2025 Perspectives” survey covered 400 hotels across the country, capturing valuable insights on market performance and future expectations.
Madeira, Algarve, and Lisbon Lead Performance
The summer season confirmed Portugal’s resilience as a top tourist destination, with certain regions outshining others. Madeira, the Algarve, and Lisbon recorded occupancy rates above 85%, with Madeira and the Algarve also experiencing notable price increases year-on-year. In contrast, while Lisbon maintained high occupancy, it kept average prices steady with last year.
August traditionally stands as the busiest month in Portugal’s hospitality calendar, and 2025 was no exception; most regions hit their peak occupancy and revenue per available room (RevPAR) during this period. However, in Lisbon and Madeira, September marked the highest performance, fueled by both increased demand and higher average prices.
Hotel Industry Revenue on the Rise
Hotel revenues are tracking a favorable upward trend, with 70% of hoteliers reporting “better” or “much better” results compared to 2024. Madeira and Algarve were star performers—97% of Madeira’s hoteliers and 95% in the Algarve reported increased revenues. However, the picture is a little more mixed in regions such as Centro, Lisbon, Oeste, and Vale do Tejo, where many hoteliers noted stagnant or declining revenues relative to last year.
Diverse Source Markets Fuel Growth
The domestic market remains vital to Portugal’s hotel industry, with 81% of hotel operators naming Portugal their top source market for summer 2025. Internationally, the United Kingdom, United States, Spain, and Germany rounded out the top five, making up 55%, 45%, 39%, and 31% of respondents’ primary markets, respectively. This underscores Portugal’s broad appeal across both European and long-haul travelers.
Autumn 2025 Outlook: Moderate Optimism
Looking to the final quarter of 2025, Portuguese hoteliers are moderately optimistic. Bookings for October are up, with 55% citing better or much better numbers than last year—especially in the Algarve (93%), Madeira (86%), and Alentejo (63%). November and December bring more cautious optimism: 43% expect improved results in November, and 38% in December, with southern regions and Madeira again forecasting the strongest results.
The source market mix is set to remain similar in the coming months, with Portugal and the UK in the lead, followed by the USA and Germany.
Portugal’s hotel industry has demonstrated remarkable stability and adaptability through summer 2025, maintaining robust occupancy and growing average daily rates despite varying regional performances. As autumn approaches, moderate optimism prevails, especially in the southern regions, setting the stage for a positive end to the year.
