Christie & Co Report on Portugal 2018

Main Photo: The Landscape in Portugal 2018

Date: April 2019

Location: Portugal

Name: The Portuguese Hotel Market 2018

Who and What: Christie & Co have updated the “Portuguese Hotel Market” report, released for the first time in 2016. The report analyses the four main regions of the country (Lisbon, Porto, Algarve and Madeira for the first time), with the intention of determining the evolution of its main indicators in 2018.

In the report they analyse the economic, tourism and hotel frameworks of each region using public information sources, including INE, Travel BI and Turismo de Portugal, as well as Christie & Co’s own sources.

Over the last few years, Portugal has experienced robust economic recovery with
record numbers in its GDP, as well as an important decrease of the unemployment

The tourism sector, which benefited from the instability of its Mediterranean
competitors (Turkey, Tunisia or Egypt), also registered significant increase in demand,
supply and profitability. The entrance of new players in the market (Minor International
and Curio Collection) and international investment have contributed to the
professionalisation of the sector.

Portugal benefits from a wide variety of demand generators, with Lisbon and Porto
identified as the country’s prime urban destinations. The recovery of the
Mediterranean competitor markets will present a challenge for the Portuguese hotel
sector, which experienced its first decrease in occupancy rates in 2018, mainly in the
resort destinations of Algarve and Madeira.

Driven by a positive macro economic environment, high interest from international
hotel groups and improvement in the overall quality of supply, Portugal is expected to
record another year of positive hotel performance in 2019, principally sustained by the
urban markets. From an investment prospective, robust appetite from investors and
the creation of the REIT (SIGI) regime is expected to boost investment.

However, despite yields above the European average, we sense overseas actors will be
challenged by the lack of opportunities fitting their return requirements.

What Did They Say: Key Observations:

1. Strength of the urban destinations: whilst the volume of overnight
stays in Lisbon has maintained a stable position, RevPAR experienced a
robust growth of 7.9% in 2018. On the other hand, Porto experienced a
new record in demand with 7.9m overnight stays (+5.9%), resulting in an
overall RevPAR increase of 9.0%

2. Slow occupancy decrease in the resort destinations: the decline of
the main international feeders markets (UK and Germany) and the
political and economic stabilisation of competitive Mediterranean
destinations have generated a correction in the volume of overnight
stays in 2018, resulting in occupancy drops ranging from 1% to 5%

3. Improvements in the quality of the hotel supply: 4-star and 5-star
hotels have increased their presence, representing more than 63% of
the total room supply in 2018

4. ADR as the main profitability growth driver: in 2018 ADR was the
main driver of the RevPAR growth. Nevertheless, this price surge has
affected occupancy levels, driving RevPAR stabilisation during the first
months of 2019

5. Limited air accessibility: the relevant increase in the number of
passengers has caused the airports of Lisbon and Faro to reach their
maximum capacity, limiting air accessibility

Size: 14 page PDF

Cost: Free

How To Get A Copy: Via THPT or direct from Christie & Co 

THPT Comment: Put together by Immaculada Ranera, MD of Christie & Co, Spain & Portugal, this is a concise report with useful information on the Portugal market for interested investors.

First Seen: Christie & Co website

The Hotel Property Team (THPT) is a small group of highly experienced business professionals. Between us, we provide a range of skills and experience which is directly relevant to those involved in the hotel property market.

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