Portugal tourism shifts from boom to value focus

Portugal’s tourism sector is slowing but not contracting, with industry leaders telling ECO that the country has moved out of the rapid-growth phase of recent years into a more mature cycle focused on generating more value per visitor. The shift matters for companies and investors because tourism remains a major part of the Portuguese economy, even as growth in volumes becomes more moderate.

Data cited by ECO show that non-resident tourist arrivals rose 3.3% to 29.9 million in 2025, after growing 9.3% a year earlier. In tourist accommodation, guest numbers increased 2.2% and overnight stays 1.6%, down from 4.8% and 3.8% growth in 2024. The slowdown was more visible in foreign demand, with non-resident overnight stays up just 0.6% in 2025, while domestic travel by Portuguese residents accelerated 13.7%.

The sector’s weight in the economy also eased slightly. Tourism consumption in Portugal grew 4.9% in 2025, below nominal GDP growth of 5.9%, and its share of GDP fell to 16.1% from 16.2% in 2024 and a record 16.3% in 2023, according to INE data cited by ECO. At the same time, tourism gross value added still rose 5.6% to €21.5 billion, holding steady at 8.1% of national gross value added.

Sector representatives said the new phase should be judged less by headline visitor growth and more by spending, productivity and the distribution of tourism activity across regions and seasons. Cristina Siza Vieira of the Portuguese Hotel Association said Portugal should not aim to receive ever more tourists every year, but instead increase the value generated by each visitor. Pedro Costa Ferreira, head of travel association APAVT, said the sector “is not stopping growing” but “will have to grow in a different way.”

The picture is uneven across the industry. Hotel operators do not yet see signs of contraction, according to the hotel association, but restaurants face weaker demand, price-sensitive consumers and high operating costs. AHRESP, which represents hospitality and restaurant businesses, said 6,446 restaurants opened and 9,279 closed between January and May, leaving a net decline of 2,833 establishments.

Originally published at Eco.pt