Buying a Hotel in Portugal: Complete Checklist

Published on May 2, 2026 and written by Cyril Jarnias

Buying a hotel in Portugal represents a unique investment opportunity, blending picturesque charm with lucrative potential. This country, with its diverse landscapes and rich culture, attracts millions of tourists each year seeking sun, relaxation, and an authentic experience.

Choosing the right location, understanding the specifics of the local real estate market, and complying with legal procedures are crucial steps to make this purchase a success.

This comprehensive checklist will guide you through all the essential steps, from finding your hidden gem to signing contracts, including evaluating costs and opportunities.

Overview of the Hotel Market in Portugal

Analysis of Current Trends in the Portuguese Hotel Market

The Portuguese hotel market shows remarkable growth and great resilience, with strong momentum since 2024. This growth is driven by sustained tourist demand, increased international interest, and a robust investment environment.

Occupancy Rates, Average Prices, and Seasonality

Hotel Openings and Pipeline (2025)

• Over 110 hotel projects currently under development.
• 30 openings planned before the end of the year, mainly in the upscale segment (4 and 5-star).
• Significant expansion of major international chains (Hilton, Hyatt, Marriott, Meliá, etc.).
• More than 12,000 rooms under construction or in the pipeline.

Most Popular Regions and Cities for Hotel Investments

Differences Between Urban Destinations and Tourist Regions

• Lisbon and Porto: Strong year-round demand, high value in the business and cultural segment, investments in the upper and mid-range, accelerated development of new international brands.
• Algarve and Madeira: Dominant summer season (Algarve), leisure tourism, heavy reliance on international clientele, but Madeira benefits from more regular visitation due to its mild climate.

Impact of International and Domestic Tourism

• International Tourism: Main growth driver, with rising demand particularly from the British, German, Spanish, French, and North American markets.
• Domestic Tourism: More resilient during international downturns, helping to smooth seasonality, but less impactful in terms of average revenue per room.

Recent Economic Developments Influencing Investments

• Double-digit growth in hotel investments in 2025, with 331 million euros invested in the first half.
• Maintained confidence of institutional investors despite macroeconomic challenges (inflation, energy costs, administrative tensions).
• Significant administrative delays in obtaining permits, but no projects canceled due to market distrust.
• Upgrading of the national hotel stock, with a majority of new projects in the 4 and 5-star segment.

Opportunities and Challenges for Foreign Investors

Opportunities

• Attractive profitability and market stability.
• Growth potential driven by the diversification of tourist flows.
• Structural support from the Portuguese tourism sector, recognized internationally.

Challenges

• Administrative delays in granting permits.
• Peak season concentrated over a few months in some regions (Algarve).
• Intense competition in urban markets (Lisbon, Porto) with an explosion of supply.

Growth or Stabilization Forecasts

• Short term: Maintaining growth momentum, sustained opening pipeline, strong international demand expected for 2025-2026.
• Medium term: Trend towards gradual stabilization, but with an activity level higher than the pre-pandemic period, and increased diversification of destinations and customer segments.

The Portuguese hotel market in 2025 stands out for its resilience, the upscaling of its offering, growing attractiveness for foreign investors, and solid growth prospects, despite certain structural and administrative challenges.

Good to know:

The Portuguese hotel market is characterized by marked dynamism, with rising occupancy rates, particularly in major cities like Lisbon and Porto, where average nightly prices remain competitive despite sustained demand. The Algarve and Madeira, popular tourist regions, exhibit strong seasonality, influencing investments. International tourism, the main growth driver, is complemented by a strong domestic market, stabilizing activity during the off-season. Recent economic developments, including the rise of alternative accommodations, pose challenges but also open opportunities for foreign investors seeking diversified assets. In the coming years, market stabilization is expected, requiring a focus on differentiation through customer experience and innovation to stand out.

Essential Criteria for Buying a Hotel in Portugal

Geographic and Tourism Criteria to Consider:

• Hotel Location:
  • Immediate proximity to major tourist sites (historic center, beaches, iconic monuments, lively neighborhoods).
  • Access to transportation: easy access to airports, train stations, public transport, and main roads.
  • Popularity of the region: Lisbon, Algarve, and Porto remain the most attractive poles for hotel investment and tourist traffic.
  • Immediate surroundings: presence of restaurants, shops, services, and leisure activities nearby.
• Tourism Market Trends:
  • Sustained growth in the hotel sector (+16% forecast for 2025).
  • Stable tourist appeal due to climate, safety, and favorable taxation.
  • Orientation towards sustainable, upscale projects, or those with a strong local identity.

Financial Aspects to Include:

Infrastructure and Condition of the Hotel:

• General condition of the building: technical diagnostics, state of disrepair, structural compliance.
• Need for renovations: work required to meet standards, modernize, or adapt the hotel product.
• Regulatory compliance: adherence to safety, accessibility, hygiene, urban planning, and environmental standards.
• Potential for expansion or transformation: possibility of adding rooms, services (spa, restaurant), or repositioning the offering (upscale, thematic).

Analysis of Competition and Local Market:

• Local market study: average occupancy rate, seasonality, customer typology.
• Direct competition: number of hotels, positioning (price, standard, services), reputation (customer reviews, brand awareness).
• Strategic positioning: differentiation through service, customer experience, theming, or integration with local heritage.

Hotel Management and Legal Requirements:

• Importance of professional management: recruitment and training of staff, choosing an experienced manager, commercial and operational management tools.
• Legal requirements for purchase and operation:
  • Obtaining the hotel operating license.
  • Declarations and registrations with local authorities (municipality, tourism, social security).
  • Compliance with social and tax obligations related to operating a hotel.

The success of a hotel investment in Portugal depends on a rigorous analysis of location, tourist assets, competitive context, overall project cost, and operational management, all in strict compliance with local regulations.

Good to know:

When buying a hotel in Portugal, it is crucial to consider its strategic location, ideally near major tourist sites like Lisbon, Porto, or the Algarve, and to verify its accessibility via public transport. Financially, carefully evaluate the acquisition cost, taking into account local taxes and potential tax incentives offered to stimulate investment in certain regions. The property’s infrastructure must be thoroughly inspected, as costly renovations may be necessary to comply with local standards and attract discerning clientele. An analysis of the local competition is essential to understand the dynamics of the Portuguese tourism market, where the country’s growing reputation as a top destination impacts strategic decisions. Also ensure the hotel can be well managed, considering the specific legal requirements for hotel operation, and consider engaging local experts to navigate the sector’s nuances.

Due Diligence Procedures in Hospitality in Portugal

Essential Steps of Due Diligence When Buying a Hotel in Portugal:

Additional Checklist to Verify:

Key Points to Remember:

Before any final decision, it is recommended to involve local experts: lawyers specialized in Portuguese hospitality, certified financial auditors, and HR professionals. A thorough analysis minimizes hidden risks associated with the acquisition.

Good to know:

When buying a hotel in Portugal, meticulous due diligence is crucial to avoid unpleasant surprises. Start with a thorough financial audit, scrutinizing financial statements and evaluating both historical performance and profitability projections. It is essential to check the land registry to confirm ownership and examine operating licenses to ensure compliance with local and international standards. On the human resources front, evaluate the existing staff and review employment contracts to ensure a smooth transition. Inspect the buildings and installations to identify any necessary renovations. Do not neglect tax implications, such as potential local taxes, which can impact the final cost of the purchase. A well-conducted approach limits risks and optimizes the investment in the Portuguese hotel sector.

Analysis of Tourism Statistics in Portugal

Recent Statistics and General Trends

• Number of Visitors: Portugal is expected to welcome 33 million visitors in 2025, up from the 30 million recorded in 2023.
• Tourism Revenue: Generated revenue is expected to reach 6.5 billion euros in 2025, compared to 5.7 billion in 2023.
• Overnight Stays: Between 75.1 and 81 million overnight stays are expected in 2025, a stable volume compared to the 77.2 million in 2023.
• Sustained Growth: This dynamic places the sector on a robust growth trajectory, with an image of a safe, welcoming, and high-quality destination.

Seasonality

High Season: The summer period (June to September) remains the busiest, concentrating most tourist flows and showing the highest occupancy rates, exceeding 39% for rooms in 2024.

Low Season: Winter months see a significant drop in arrivals, but visitation is even increasing in December, with 1.9 million guests and 4.2 million overnight stays recorded.

Most Represented Nationalities

In 2024, 70.3% of overnight stays came from international markets, representing over 56 million overnight stays by international tourists.

Economic Impact of Tourism

Contribution to GDP: Tourism is expected to account for 21.5% of the Portuguese GDP in 2025, a contribution of 62.7 billion euros, a level 38% higher than in 2019.

Employment Generated: The sector supports 1.2 million jobs, nearly a quarter of all jobs in Portugal (200,000 more than the previous record).

Spending

• International Visitor Spending: 33.1 billion euros forecast for 2025.
• Domestic Spending: 22.9 billion euros expected, a sharp increase since 2019.

Most Popular Regions and Cities

Lisbon and the Algarve concentrate the majority of hotel investments, thanks to high occupancy rates and superior profitability, especially in high season.

Porto benefits from sustained growth, attracting clientele seeking cultural and wine tourism experiences.

Madeira and the Azores are emerging as destinations for more sustainable and upscale tourism.

European Comparisons

Portugal depends much more on tourism than its neighbors, with the sector occupying a central place in the national economy.

Despite a lower volume of visitors, profitability per visitor is higher, notably due to the upscaling of the offering and strong international appeal.

Forecasts and Importance for Hotel Investment

Expected Growth: Projections remain optimistic for the coming years, with sustained growth in arrivals and revenue.

Hotel Investment: High profitability, particularly in Lisbon, the Algarve, and Porto, continues to attract domestic and foreign investments, despite challenges related to the shortage of skilled labor.

Challenges and Opportunities

• Need to innovate to meet growing and diverse demand.
• Pressure on sustainability and local integration, now essential factors for the long-term viability of hotel investments.

Tourism in Portugal asserts itself as a major economic pillar, offering attractive prospects for hotel investment, but requiring continuous adaptation in the face of European competition and new social and environmental challenges.

Good to know:

Tourism in Portugal has experienced sustained growth, accounting for approximately 17% of the national GDP and generating jobs for nearly 10% of the active population. Trends show a preference for British, German, and French tourists, with a peak in visitation during the summer. Lisbon, Porto, and the Algarve dominate as popular destinations, each attracting visitors for their cultural and coastal offerings, thus positively influencing the returns on hotel investments. Compared to Spain or Italy, Portugal attracts with its more affordable cost of living but competes closely for destination appeal. For investors, the forecast of a continued rise in visitors, notably thanks to marketing efforts and new air routes, promises increased profitability in the Portuguese hotel sector.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

Find me on social media: