Algarve tourism slows as overnight stays edge down

Portugal’s Algarve, the country’s largest tourism region, lost momentum in 2025 as overnight stays fell 0.2%, making it one of only two regions to post a decline, according to official tourism data. Algarve still accounts for more than a quarter of all overnight stays in Portugal and remains heavily reliant on foreign visitors.

The decline followed a growth of just 1.5% in 2024 and came in a year when tourism growth slowed nationally. Portugal received 29.9 million non-resident tourists in 2025, up 3.3%, while tourist accommodation recorded 89.7 million overnight stays, up 1.6%, according to the national statistics office INE. In the Algarve, however, accommodation revenue still rose 6.1%, suggesting that weaker volumes did not prevent higher income for the sector.

Industry representatives told ECOnews the region is shifting from volume to value. Algarve tourism board president André Gomes said the region is now “a mature and consolidated destination” that competes on quality rather than volume, while the Portuguese Hotel Association’s executive vice-president Cristina Siza Vieira said the revenue increase reflected “healthy growth”. In May this year alone, total accommodation revenue in the Algarve rose 10.5% to €179 million, Gomes said.

The data also underline structural risks. Foreign tourists accounted for 75.3% of overnight stays in the Algarve in 2025, above the national average of 67.1%, and the region remained the country’s most dependent on its main source markets. It captured 57.3% of all UK tourist overnight stays in Portugal and 73.1% of those by Irish tourists. The Algarve was also the only region where seasonality among domestic tourists exceeded 50%, reaching 55.9%.

Even with the slowdown, the Algarve remained Portugal’s leading tourism region, with 25.6% of total overnight stays and 23.3% of national accommodation capacity. But other regions grew faster in 2025, with the North up 4%, Madeira 3.9% and Alentejo 3.8%, pointing to a broader redistribution of tourism growth across the country.

Originally published at Eco.pt