Record Tourism Numbers Affirm Portugal’s Potential as a Viable Investment for Tourism Properties
Portugal’s allure knows no bounds. Or so it seems. Tourists, expats, investors, digital nomads, tech companies, retirees. All have come to marvel at the sheer beauty — and diversity — of this charming country in Southern Europe, boosting the Portugal’s presence on the global map and instigating growth and development.
This growth is showing no signs of slowing down, with record numbers of tourists in 2023 and more than one million foreign nationals now living in Portugal.
While most expats and tourists tend to gravitate towards Lisbon and the Portuguese Riviera, the Algarve, and Porto, there is huge potential in other parts of the country. The North and Center of Portugal are key locations that are beginning to move onto the radar, while the beautiful Alentejo region is one of the most brilliantly underrated regions in the whole of Europe.
Tourism at an All-Time High
One sector that is synonymous with Portugal’s growth in recent years — and that has cemented the country’s place as one of the ultimate destinations to move to — is its tourism sector. Portugal closed 2023 with a record 77 million overnight stays and €25 billion in tourist revenue, representing a 10 percent growth and 37 percent growth, respectively, when compared with 2019, according to the National Statistics Institute (INE), the Bank of Portugal, and Turismo de Portugal.
The best year for Portugal’s tourism sector came against the backdrop of increased national and international uncertainty, for example, with rising inflation and conflict in Europe.
The stage looks set for 2024 to follow suit — or surpass the massive tourist numbers visiting Portugal in 2023. However, this growth may not be where you most expect, with lesser-known areas really coming into their own.
Discovering Portugal’s Lesser-Known Treasures
While there has been growth in tourism across the country, the regions that registered the most growth were the North, Center, and Alentejo regions. Indeed, in an interview with the Portuguese newspaper Expresso, the Secretary of State for Tourism, Nuno Fazenda, noted that Portugal is experiencing structural changes, with more tourism in interior regions and out of high season. It looks set that these trends will continue in the coming years.
Lesser-known regions exempt from short-term rental restrictions
Following the More Housing Package (Officially known as Law №56/2023) on 6 October 2023, there were restrictions placed upon investors in Portugal who wanted to rent out their apartment for short-term rentals to cater to the country’s booming tourism sector.
The issuing of new AL (Alojamento Local) licenses for apartments was suspended across Portugal, with the exception of interior areas of the mainland and the autonomous islands of Madeira and the Azores. The AL License is required for those looking to rent out their property for short-stay rentals, and without it, you cannot register your property on platforms such as Airbnb or booking.com
The North and Center of Portugal, alongside the Alentejo, are largely classified as interior areas and look set to be popular locations for investors looking to capitalize on short-term rentals and, with more tourists than ever before looking outside hotspot locations, investing in interior areas is a winning combination.
If you look at exempted areas, where it is still possible to issue new AL licenses for apartments, you’ll find some truly remarkable places, with locations on the Alentejo Coast fit to challenge the Algarve as having some of the most wonderful beach spots in Portugal. For nature lovers, the North presents attractive opportunities. For example, Valdevez, Terras de Bouro, and Melgaço are excellent options, where you’ll be within striking distance from stunning Natural Parks, such as Parque Nacional Peneda-Gerês, the Douro Valley, and also not far from Porto and the Spanish border.
An affordable option
For property buyers looking to snap up property in lesser-known parts of Portugal or who want to capitalize on the growing popularity of interior areas amongst tourists, they will also find that property prices — for the most part — are much more affordable than in other parts of the country.
The average asking price for properties in the North of Portugal stood at €1,740 per square meter in 2023, while in the Center, the average asking price was €1,864. The Alentejo was slightly more expensive, with the average asking price standing at €2,685, but is still very affordable compared with other regions. Also, note that these are average asking prices, and sales prices are often lower than this as sellers look to sell by a specific date.
The Growing Appeal of the Alentejo
The Alentejo region, with its quaint, whitewashed towns, vast vineyards, and incredible local produce, has just begun to gain international attention. The region has long been a firm favorite with Portuguese locals, who seek the Alentejo out whenever the opportunity arises to enjoy the green rolling hills, incredible scenery, and some of the best produce that Portugal has to offer– the region contains just under 50 percent or Portugal’s utilized agricultural land. But, it is only now that internationals are starting to visit — and fall in love with — this culturally rich and relatively undiscovered gem in Portugal.
New Trends in the Alentejo
The beauty of the Alentejo, combined with increased interest in the region, paves the way for a variety of investment opportunities. This includes wellness retreats, with many already popping up in the region, including yoga, mindfulness, and arts and crafts retreats.
Alongside this, Alentejo wines are regarded as some of the best in the world — think robust, fruity, and full-bodied reds. This presents an alluring tourist opportunity, whereby tourists wish to experience the art of winemaking and, given the history of wine here, there could perhaps be no better spot.
With many more tourist attractions, from hot air balloon trips close to the capital of the region, Évora, to water skiing, the future looks bright for tourism in the Alentejo region, and investors should definitely take note.
Your peaceful luxury escape
For a more luxurious feel, look to the west coast of the Alentejo, where Tróia, Comporta, and Melides have helped establish this part of Portugal as one the most exclusive destinations in Europe. The great location, just an hour south of Lisbon, is another great selling point, making it easy for tourists and expats to head for a long weekend away from the capital.
Tróia is a jutting-out peninsula, home to pristine, sandy beaches, boutique hotels, and incredible gastronomy. You’ll be able to relax by the beach, explore the stunning Serra da Arrábida Natural Park, which has some of the very best views of the Atlantic in all of Portugal, or dolphin watch. The Sado Estuary Nature Reserve, which has its fair share of unique species and is a top spot for birdwatching, is also close by.
Slightly further south, you have Comporta, commonly referred to as the “Hamptons of Europe. Comporta is one of the best secret beach destinations in Europe, dotted with rice paddies and salt pans, while Melides, close by, has become highly sought after by leading European architects and designers who marvel at the intricate, traditional Alentejo architecture that now blends wonderfully with eco-friendly building techniques and modern design, all against a truly local scene and endless olive groves. It is a wonder why it has taken tourists so long to discover the unrivaled beauty of Melides.
Your Expert Guide to Buying Property in Portugal
If you are looking to snap up property in one of Portugal’s lesser-known areas, then the definitive book Your Expert Guide to Buying Property in Portugal by Goldcrest Real Estate arms you with everything you need to know about the world of Portuguese real estate. From providing a deeper understanding of key regions in Portugal, to offering an easy-to-read step-by-step guide, you’ll have everything you need to know at your fingertips.
So, whether you are looking for a lovely countryside house in the depths of the Alentejo, a luxury retreat to capitalize on changing tourist trends, or want to explore hidden parts of the country of the beaten track, take note of the interior regions of Portugal. They look set to flourish in 2024.
Data sources
Tourism figures data taken from the National Statistics Institue (INE) and the Bank of Portugal for January-November 2023, with an estimation for December from Turismo de Portugal.
Property price data taken from Confidencial Imobiliário.
