Tourism Surge Highlights Growing Demand for Holiday Rentals in Portugal

Portugal’s tourism sector is experiencing an exceptional rise in activity. Recent figures from SIBS Analytics show a 30% increase in tourist purchases and cash withdrawals compared to last year, alongside a 22% rise in overall spending. With visitors from Spain, the United Kingdom, France, the United States and Brazil leading the way, Portugal continues to strengthen its appeal as a prime holiday destination.

This growing influx is reshaping the property market, particularly in regions like the Algarve, where demand for holiday rentals is surging. Investors looking at property in Algarve Portugal now have a rare opportunity to capitalise on this momentum.

Lagos Sees a Strong Uptick in Tourism-Driven Demand

Lagos, a historic coastal town in the Algarve, is one of the standout locations benefitting from the tourism boom. According to SIBS, Faro, the gateway to the Algarve, recorded a 95% rise in transactions from Lisbon visitors and a 62% increase from Porto residents, a clear sign of heightened domestic and international interest in the region.

Those seeking property to buy in Lagos Portugal are finding that holiday rentals are becoming an increasingly profitable venture. The town’s blend of beaches, culture and lifestyle is drawing longer stays, family groups and digital nomads alike, making Lagos more attractive for investors focused on rental income.

How Tourism Trends Are Changing Investment Strategies

The average spend per tourist may have dropped slightly (€39 this year compared to €42 last year), but the volume of transactions has significantly increased. This suggests tourists are spending more frequently and staying longer creating a sustained demand for flexible accommodation options like holiday rentals in Portugal.

Investors looking at Lagos along with the broader Algarve, are tapping into this trend, with many buyers prioritising features that appeal to tourists such as modern amenities, private outdoor space and proximity to beaches and restaurants.

Why Portuguese Real Estate Remains a Strong Asset

Portugal’s real estate market continues to offer strong fundamentals for buyers. Beyond the Algarve’s appeal, Portuguese real estate in general benefits from stability, attractive property prices compared to other European destinations, and a supportive legal framework for foreign buyers.

This makes it an ideal time for investors to explore property here as part of a holiday rental strategy or for personal use with strong rental potential when not in residence.

Summary

With a 30% jump in tourist activity and growing interest from key markets like Spain, the UK and France, Portugal’s Algarve and Lagos in particular offers exceptional opportunities for holiday rental investment.

If you already have a property here which you’re interested in renting out, get in touch with our team at Resort Rentals Algarve. Our Inspired Property group also looks after long term rentals through Lagos Long Lets; or, if you haven’t yet found a property but are keen to take advantage of the positive market, be sure to browse our properties for sale through B&P Real Estate.