Tourism in Portugal closes 2025 with very positive prospects for Christmas and New Year’s Eve, but the largest hotel chains are already anticipating a possible slowdown in 2026, particularly in the Algarve, if a drop in the British market is confirmed, according to data provided to Lusa.
This year-end, the Algarve once again asserts itself as one of the most sought after destinations in national tourism. Estimates, in the region and in Madeira, are occupancy rates of between 65% and 80% at Christmas and between 90% and 95% on New Year’s Eve, with average stays longer than in the rest of the country – around four nights at Christmas and five at the end of the year. The group emphasizes that, in the Algarve case, the Christmas season is expected to register a growth of 5% to 7.5% compared to 2024, while New Year’s Eve is expected to remain in line with the previous year.
In hotels in Lisbon, Porto and Pousadas de Portugal, Pestana points to occupancy rates between 65% and 85% at Christmas and between 85% and 95% on New Year’s Eve, with average stays of two nights. Tourism in the group anticipates “a higher performance than the previous year” in Porto and similar levels in Lisbon. In Pousadas, expected growth varies between 4% and 17%, depending on the region, with the average price per room and revenue increasing between 5% and 8%, reflecting the demand for differentiated experiences.
The Vila Galé group also describes a “positive” December compared to 2024, with “interesting and superior” demand in several regions. According to the marketing and sales director, Pedro Ribeiro, the Portuguese market remains the main source of guests in most units, followed by the English market in the Algarve, where the British presence continues to be decisive for hotel performance.
At Grupo Hoti Hotéis, the executive president, Miguel Proença, indicates global forecasts of 70% occupancy at Christmas and 90% at New Year’s Eve. Demand is evolving “in line with last year, with a stabilization perspective”, although there are different realities in the 20 units that the group owns in Portugal. Madeira emerges as the area with the greatest demand throughout the festive season, while in the remaining regions – which includes the Algarve – the pressure is concentrated mainly on New Year’s Eve, reflecting the impact of tourism.
Despite this favorable context, the Pestana Hotel Group anticipates a more challenging 2026. The group admits that “expectations point to a scenario of market slowdown, with some pressure on prices in several European capitals, resulting from the increase in supply and stabilization of demand”. In the specific case of the Algarve, challenges associated with the eventual collapse of the British market are expected, particularly sensitive in a region where UK tourism is traditionally one of the main sources of tourists. For Madeira, the group still foresees a positive year, albeit with a more moderate growth rate.
Another risk factor identified involves airport infrastructure, with Pestana warning of the effect that the experience at airports could have on the attractiveness of the destination Portugal. “The big problem could arise from airport infrastructure. The experience of airport users in Portugal, in Lisbon throughout the year and in high seasons in the Algarve, is extremely bad and this will obviously have an impact on future demand”, says the group.
After a 2025 that the chains classify as “positive” for tourism, the sector enters the Christmas season and the New Year with high occupancy rates and good revenue prospects, but with the eye already set on 2026. In the Algarve, where tourism is one of the pillars of the regional economy, the evolution of the British market and the response to airport limitations emerge as decisive variables to prevent next year from putting a brake on the growth that the region has been experiencing. register.
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