Published on
November 18, 2025
Revenue from tourist lodging in Portugal has been estimated to be over €5.7 billion between January and September of 2025, which translates to an annual increase of approximately 7.6% and €4.4 billion in lodging revenue, with an annual increase of 7.4%. Therefore, Portugal was able to showcase an annual growth in both domestic and international tourism. According to INE (Instituto Nacional de Estatística), PortugalÕs tourism industry has been showing strong numbers which has proven to be an essential contributor towards PortugalÕs economy.
Strong Performance in Tourist Accommodation
During the first nine months of 2025, Portugal’s tourist accommodation establishments recorded a total of 25.3 million guests, a 3% increase compared to the same period in 2024. These guests stayed for a total of 65 million overnight stays, reflecting a 2.2% rise from the previous year. The figures indicate that Portugal continues to attract a steady influx of both domestic and international visitors.
Regional Breakdown: Algarve Dominates
The Algarve remains the top destination for tourists in Portugal, accounting for the highest concentration of overnight stays. Between July and September, the region accounted for 29.8% of the total overnight stays, followed by Greater Lisbon with 20.6% and the North of Portugal with 17.5%. The Algarve’s popularity during the summer months highlights its ongoing dominance in Portugal’s tourism sector, offering sun, beach, and cultural experiences that attract both residents and international tourists alike.
The region also saw the highest number of overnight stays by both residents and non-residents. Non-resident overnight stays in the Algarve reached 30.7% of the total, while resident stays accounted for 27.8%. The Algarve’s appeal, with its Mediterranean climate and coastal resorts, remains a significant driver of the national tourism economy.
The Growth of Greater Lisbon and Madeira
While the Algarve leads in terms of overall overnight stays, Greater Lisbon also saw strong performance, accounting for 20.6% of total overnight stays in the third quarter of 2025. The capital city and its surrounding areas remain a prime destination for both international tourists and domestic visitors, driven by cultural landmarks, vibrant city life, and easy accessibility.
Madeira, an archipelago known for its stunning landscapes and year-round mild weather, recorded 79.5% of its overnight stays from international markets. This marked an increase in the region’s reliance on foreign tourism, similar to the trend seen in Greater Lisbon. Madeira’s scenic beauty, rich culture, and increasing international recognition continue to make it an attractive destination for tourists from around the world.
The Shift in Foreign Market Dependency
Despite strong performance across Portugal, there has been a slight shift in the dominance of foreign markets in Portugal’s tourism industry. In the third quarter of 2025, foreign markets accounted for 67.8% of the total overnight stays, a decrease from previous years. This marks the lowest share of foreign tourists since the third quarter of 2022. While international visitors still make up the majority of tourists, domestic tourism has seen a slight increase, with overnight stays by residents rising by 5.5% to 9.2 million during the same period.
The dependence on foreign markets remains highest in Greater Lisbon, where 83.2% of overnight stays are from international visitors. Madeira and the Azores also have high levels of dependence on foreign tourism, with 79.5% and 76.6% of overnight stays coming from international travelers, respectively. In contrast, the Alentejo and Central regions have a lower reliance on foreign markets, with only 30.7% and 36.1% of overnight stays, respectively, coming from international tourists.
Factors Driving Growth
Portugal’s tourism revenue growth is largely attributed to its diverse range of destinations, from sun-soaked beaches in the Algarve to the cultural riches of Greater Lisbon and the natural beauty of Madeira. The country’s rich cultural heritage, world-renowned cuisine, and diverse landscapes continue to attract visitors from around the world.
Additionally, the increase in domestic tourism reflects a trend where Portuguese residents are exploring their own country more, a shift that has been particularly noticeable in recent years. The resurgence of interest in local travel is attributed to factors such as the ease of access to domestic destinations and a renewed interest in cultural and nature-based tourism experiences.
Future Prospects for Portugal’s Tourism
Looking ahead, the tourism sector in Portugal is expected to continue its upward trajectory. The government’s efforts to promote sustainable tourism, protect cultural and natural heritage, and invest in infrastructure development are key factors that will help maintain the country’s competitive edge in the global tourism market.
As foreign markets remain a crucial element of Portugal’s tourism economy, efforts will also focus on enhancing the experience for international tourists while ensuring that local communities and smaller businesses benefit from the influx of visitors. The growth of both international and domestic tourism will be vital in sustaining Portugal’s tourism industry and ensuring its long-term success.
Conclusion: A Bright Future for Portugal’s Tourism Sector
Portugal’s tourism sector is experiencing strong growth, with revenue from tourist accommodation and lodging reaching new highs in 2025. The Algarve, Greater Lisbon, and Madeira continue to be key drivers of this growth, attracting millions of tourists each year. While foreign markets remain dominant, domestic tourism is on the rise, reflecting a balanced and sustainable growth strategy for Portugal’s tourism industry. As the country continues to diversify its tourism offerings and invest in sustainability, it is poised for continued success in the years to come.
