2024 was another special year for the hotel sector, which stood out as one of the most attractive asset classes for real estate investors. The strength of demand in the tourism sector in Portugal, especially in the more consolidated regions, has put the spotlight on distinctive assets in the eyes of investors.
It should be noted that, of the total of almost 72 million overnight stays in Portugal recorded up to October, the Algarve and Greater Lisbon continue to be the regions that account for most of the demand, with around 19 million and 17 million overnight stays, representing 27% and 24% respectively.
This asset class, with such fundamentals on the demand side, offers stability of income and prospects of appreciation in the medium and long term, making them attractive to both institutional and private investors.
The context of high interest rates has continued to condition the investment market this year, although the easing of monetary policy by the European Central Bank with the first interest rate cuts has favored the investment market. Despite the difficulties imposed by the current conditions, the market maintains significant liquidity, which reflects investors’ appetite to continue looking for opportunities, particularly in highly attractive and resilient segments.
This is how hotels came to the fore in 2024, with the volume of investment in hotels amounting to almost €300 million up to September, only slightly below the volume recorded in the same period last year.
The main deals in the sector this year were almost all 4 and 5-star hotels, in addition to the portfolio of Amazon Hotels, proof of the operators’ commitment to qualifying and positioning their offer. In the light of these transactions, it can be seen that the sector’s attractiveness on the investment market is becoming more and more transversal to all regions, with a greater diversification of locations compared to the previous year, when the majority of investment had been channeled into developments in the Algarve.
Nevertheless, the Algarve region has not lost any of its importance, since one of the most important occupation operations of the year was the purchase of the Conrad Algarve by Quinta do Lago, from an operating perspective.
2025 is also expected to be a prosperous year full of opportunities in the hotel sector, provided the fundamentals and a favorable macroeconomic context are maintained. After year after year of anticipating a possible slowdown given the extraordinary growth of the tourism sector, what is certain is that the sector continues to prove to be very resilient and very attractive to the eye, with solid market fundamentals that in no way contradict the upward trajectory.
Opinion article by Silvia Dragomir, Head of Research for Real Estate & Sustainability da Worx, published in issue no. 223 January 2025 of Publituris Hotelaria magazine.
