Published on
January 31, 2026
Portugal’s tourism industry has reached a milestone with an astounding 29 million international visitors in 2024, setting a new benchmark for the nation’s hospitality and economy. As tourism continues to surge, it brings both opportunities and challenges for residents, expatriates, and investors. With a rapidly evolving market, this influx of visitors is reshaping the country’s neighborhoods, labor markets, and even national policies, making it crucial for expats and prospective residents to stay informed.
Tourism Boom: Key Figures That Matter for 2024
Portugal saw a remarkable 34 million hotel stays in 2024, generating an impressive 88.3 million overnight visits. Two-thirds of these nights were spent by non-residents, marking the highest percentage of non-residential stays since 2017. This influx means longer queues at immigration, packed restaurants during peak season, and a hospitality workforce that is now more critical than ever. The impact is felt across the economy, with nearly one in ten euros of Portugal’s GDP now coming from tourism, according to the Bank of Portugal.
Where Are the Tourists Coming From?
Tourist arrivals in Portugal are coming from a diverse mix of countries. Spain remains the largest contributor, accounting for roughly a quarter of all international visitors. The United Kingdom follows closely, while France, despite a soft summer, has slipped to third place. The standout performer, however, has been the United States, with a significant rise in hotel stays and a nearly 14% increase in spending. Additionally, Northern European countries like the Netherlands and the Nordic regions are also showing strong growth, giving Portugal a more diversified source of visitors.
Economic Impact: How the Surge is Shaping Portugal’s Economy
Tourism revenue in Portugal reached €27.7 billion in 2024, marking an 8.8% increase from the previous year. This surge in tourism spending now accounts for nearly half of all service exports in Portugal. With an expanding tourism industry, the sector is becoming more vital to the national economy, directly impacting everything from local businesses to national policy decisions.
This influx has resulted in some unintended economic benefits. For instance, local cafes and grocery stores are benefitting from increased foot traffic, with holidaymakers increasingly contributing to Portugal’s economy. As a result, even small, everyday purchases are being subsidized by the spending habits of tourists.
Challenges: Overcrowding, Housing Issues, and Infrastructure Strain
However, with such rapid growth comes significant strain on infrastructure, particularly in popular cities like Lisbon and Porto. The housing market in these cities is under immense pressure as property prices and rents soar due to the increased demand from tourists. Additionally, certain regions of Portugal, particularly the southern Algarve, are facing water shortages exacerbated by hotel consumption during the hotter months.
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The Organisation for Economic Co-operation and Development (OECD) has raised concerns about the strain on Portugal’s hospitality workforce, highlighting the need to make tourism-related jobs more attractive in order to fill the nearly 500,000 direct and indirect positions in the sector. This puts the onus on the government to address workforce shortages in key areas like hospitality, retail, and services.
Government’s Response: The Tourism 2035 Master Plan
In response to the increasing demands of tourism, the Portuguese government has introduced the Tourism 2035 master strategy. This blueprint aims to decentralize tourist flows across the country, boost regional development, and ensure more sustainable tourism practices. Among its key initiatives are improvements in rail connectivity, low-carbon travel initiatives, and streamlined permitting for accommodation projects, making it easier for investors to get involved in the hospitality sector.
Moreover, the government’s annual action plan “Acelerar a Economia” promises further incentives for accommodation investments while also emphasizing energy efficiency and workforce development. This presents an exciting opportunity for international investors looking to capitalize on Portugal’s growing tourism sector.
What Does This Mean for Expats and Residents?
For expats and potential residents in Portugal, the growing tourist influx presents both opportunities and challenges. On one hand, the increase in international tourists translates to more international flight routes, better restaurant options, and an enriched cultural calendar. However, the rising demand for short-term rental properties could push rents higher, especially in Lisbon and Porto.
Additionally, expats involved in hospitality or retail can tap into a larger, multilingual customer base, opening up new business prospects. Entrepreneurs looking to invest in the tourism sector can benefit from the country’s improving investment climate, supported by government incentives. However, potential property buyers may need to stay informed about the latest zoning laws, short-term rental licensing restrictions, and sustainability policies, which could affect property investments.
Portugal’s Long-Term Outlook: Growth, Sustainability, and Investment
Looking ahead, Portugal’s tourism sector is poised to continue growing, although at a more measured pace. Recent data from the first quarter of 2025 shows a continued increase in arrivals, but analysts caution that the Brazilian market, in particular, has seen a slight dip due to currency fluctuations and expensive trans-Atlantic airfares. While this presents a challenge, it highlights how external factors can quickly affect Portugal’s tourism-based economy.
Despite the potential setbacks, Portugal’s government remains committed to creating a sustainable tourism model that benefits both residents and visitors. With plans for infrastructure improvements and a focus on balancing growth with sustainability, the future looks promising for both investors and expats looking to make Portugal their home.
Conclusion: The Future of Portugal’s Tourism and Its Impact on Residents and Investors
Portugal’s tourism boom has not only boosted the economy but has also brought challenges in terms of housing, infrastructure, and workforce shortages. However, with the government’s proactive approach to managing these issues through initiatives like the Tourism 2035 master plan, the future remains bright for both residents and investors. Expats and potential homeowners will need to stay vigilant as new policies and regulations are rolled out to ensure the tourism sector remains sustainable while maximizing its benefits.
