January’s figures reinforce a central theme in Tourism-Driven Real Estate Investment in Portugal: income resilience remains intact, but performance is becoming more selective across regions and asset types.
According to the latest data from INE (Instituto Nacional de Estatística), Portugal’s tourism sector maintained year-on-year growth in January 2026, although with visible signs of moderation. For investors looking to invest in tourism income property in Portugal, the numbers confirm that the market is still expanding, yet increasingly sensitive to regional dynamics and demand composition.
This analysis builds on last month’s briefing, where we highlighted a more selective market environment. The January release adds further clarity to that trend.
Demand Growth Continues, But at a Slower Pace
In January 2026, tourist accommodation establishments recorded:
- 1.7 million guests (+3.8% year-on-year)
- 3.7 million overnight stays (+2.0%)
The sector is still expanding. However, growth rates have softened compared to December.
More importantly, demand composition is shifting.
- Resident overnight stays increased 4.7%.
- Non-resident overnight stays rose just 0.7%.
Domestic demand is currently carrying more of the momentum. International markets are still positive overall, but less dynamic. Among the top source markets, Canada (+12.5%) and Brazil (+8.2%) posted the strongest growth, while France (-8.3%) and the UK (-3.6%) declined.
For commercial real estate investors, especially those focused on hospitality real estate in Portugal, this signals a more fragmented demand environment. Assets exposed to diversified international demand — particularly in Lisbon and Porto — are structurally better positioned than those reliant on a narrow set of European feeder markets.
Revenue Outpaces Volume: A Positive Signal for Tourism Income Property
Revenue performance remains stronger than volume growth.
In January:
- Total revenues reached €276.8 million (+5.6%).
- Room revenues reached €199.5 million (+5.6%).
- ADR increased to €92.1 (+3.4%).
- RevPAR rose to €33.8 (+1.3%).
This confirms that operators continue to protect pricing. In the context of Tourism-Driven Real Estate Investment in Portugal, that matters. Income-producing tourism assets depend on sustained rate discipline to maintain cash flow and asset valuations.
However, RevPAR growth has slowed to low single digits. If occupancy continues to soften, pricing power alone may not sustain margin expansion through 2026. Investors underwriting hospitality acquisitions in Portugal should avoid assuming continued ADR-driven upside without clear evidence of demand acceleration.
Occupancy and Length of Stay: Early Pressure Points
Two indicators deserve careful monitoring.
- Average stay fell to 2.25 nights (-1.7%).
- Net bed occupancy declined to 28.6% (-0.4 p.p.).
- Room occupancy decreased to 36.6% (-0.8 p.p.).
This marks the sixth consecutive month of declining occupancy-cama.
Shorter stays and declining occupancy do not signal a downturn yet. But they shift the risk profile, particularly for secondary leisure markets and highly leveraged assets.
Madeira (49.6%) and Greater Lisbon (38.2%) continue to post the highest occupancy levels. That reinforces the defensive nature of prime urban and established resort destinations within the Portuguese tourism property market.
Regional Divergence Is Increasing
National averages conceal meaningful regional differences.
- North: Overnight stays +8.2% (non-residents +10.8%).
- Centro: +5.6%.
- Greater Lisbon: +5.0%.
- Algarve: -4.7%.
- Azores: -5.8%.
- Madeira: -3.0% (overnight stays), though revenue remained robust.
At the municipal level, Porto (+11.1%) and Vila Nova de Gaia (+9.2%) stood out, while Loulé (-12.3%) and Vila Real de Santo António (-9.6%) declined.
For investors in tourism real estate in Portugal, this divergence is critical. The North continues to consolidate its position as a structural growth region. Meanwhile, certain Algarve submarkets show greater volatility, particularly in off-peak months.
Allocation decisions in 2026 should increasingly be region-specific rather than nationally driven.
Strategic Implications for 2026
From an investment perspective, January’s data support three core conclusions for Tourism-Driven Real Estate Investment in Portugal:
1. Core urban hospitality assets remain resilient.
Lisbon and Porto continue to anchor performance, combining occupancy stability with rate growth.
2. Secondary leisure markets require more conservative underwriting.
Winter volatility and reliance on specific foreign markets increase downside exposure.
3. Pricing-led growth has limits.
ADR growth is supporting revenues, but without stronger occupancy, upside is capped.
Investors should stress-test cash flow projections under moderate occupancy compression scenarios, especially when evaluating new acquisitions or development projects in resort-heavy regions.
What Investors Should Watch Next
Looking ahead, the following indicators will shape the trajectory of Tourism-Driven Real Estate Investment in Portugal over the coming quarters:
- Spring booking momentum versus 2025.
- Recovery patterns in UK and French outbound travel.
- Sustainability of North American growth.
- Occupancy stabilization in the Algarve and island regions.
- Potential data revisions due to weather-related disruptions noted in the January release.
If occupancy stabilizes in Q2 while ADR remains positive, the sector will enter peak season with solid income foundations. If occupancy continues to weaken, operators may resort to discounting, affecting RevPAR and asset-level yields.
Conclusion: Selectivity Defines the 2026 Investment Landscape
Portugal’s tourism property market remains fundamentally sound. Revenues are growing faster than overnight stays. Core regions are resilient. International diversification is improving.
Tourism-Driven Real Estate Investment in Portugal in 2026 requires disciplined underwriting, regional precision, and careful risk management. Investors who prioritize strong locations, diversified demand bases, and sustainable operating margins will be better positioned to navigate potential volatility.
If you are considering how to invest in tourism income property in Portugal with a data-driven strategy and local market expertise, the team at Roca Estate can provide tailored guidance aligned with current tourism and hospitality real estate trends.
