Portugal’s tourism sector delivered its strongest first quarter on record, underscoring the industry’s resilience despite rising travel costs and inflationary pressures linked to conflict in the Middle East.
Data released by the Instituto Nacional de Estatística (INE) show that accommodation establishments hosted 5.8mn guests between January and March, generating 13.6mn overnight stays, year-on-year increases of 1.5 per cent and 1.3 per cent respectively.
Pricing strength remained a key driver of performance. Average revenue per available room (RevPAR) rose 1.5 per cent to €41.5, while average daily rates increased 2.7 per cent to €93.8, signalling continued pricing power across Portugal’s hospitality sector.
Higher rates helped push total tourism revenues, including accommodation, food services, and ancillary spending, to a record €1bn in the quarter, up 5.5 per cent from a year earlier. Accommodation revenues alone reached €734.5mn, a rise of 5.1 per cent. The statistics office noted that the timing of Easter may have supported the quarterly figures.
Madeira and the Lisbon metropolitan area remained Portugal’s most expensive destinations. Madeira recorded the highest revenue per available room at €77.4, followed by Greater Lisbon at €67.3, whilst the strongest growth was registered in Madeira and the Alentejo.
Greater Lisbon posted the country’s highest average daily rate at €115.9, narrowly ahead of Madeira (€114.1), which also recorded the fastest price growth.
Foreign visitors continued to underpin sector growth, accounting for 9.2mn overnight stays, roughly 68 per cent of the total.
The UK remained Portugal’s largest source market, representing 15.6 per cent of non-resident stays despite a marginal decline. Germany and the US followed, both recording growth of about 5 per cent.
Among leading markets, Canada delivered the strongest expansion, with overnight stays rising 10.6 per cent for a second consecutive quarter, whilst French demand contracted sharply, extending a recent downward trend.
Travel patterns varied significantly by region. Visitors from Brazil, the US, Italy, and France concentrated heavily in Greater Lisbon, whilst British and Canadian tourists remained dominant in the Algarve. Madeira continued to attract strong demand from Germany and Poland, and Spanish visitors were most prominent in the north of the country.
Dependence on international markets remained highest in Madeira, where non-residents accounted for nearly 86 per cent of overnight stays, followed by the Algarve and Greater Lisbon. By contrast, the Centre and Alentejo regions relied more heavily on domestic tourism.
Overall, growth in domestic tourism slowed, with overnight stays by Portuguese residents rising 1.2 per cent to 4.3mn, continuing a deceleration that began in mid-2025.
INE highlighted a shift in demand dynamics: for the first time in five quarters, international overnight stays grew faster than those by domestic travellers.
Greater Lisbon captured the largest share of total overnight stays (28.6 per cent), followed by the North and the Algarve. Portuguese residents were most concentrated in the North, while international visitors overwhelmingly favoured the capital region.
International demand expanded most strongly in the North and Alentejo, whilst domestic tourism grew fastest in Greater Lisbon and the Algarve, but fell sharply in Madeira and the Azores.
Taken together, the figures suggest that Portugal’s tourism boom remains intact for now, supported by robust international demand and higher visitor spending, even as broader economic risks cast uncertainty over global travel later in the year.
Source: INE
