Karina Simões, Vice-President Portugal of the Hotels & Hospitality Group at JLL, commented, “The perspectives for tourist activity in these three regions are very positive for 2017, envisaging more tourists, and mainly tourists with a grater financial capacity, with a direct impact on profits and RevPAR. Parallel to this increase in demand, the amount of hotel accommodation will be increased, as well as being more diverse and higher quality.”
On the other hand, she stresses that, “The investment market already benefitted from this positive combination of factors in 2016 and investors are paying increasing attention to Portugal, showing greater confidence in the potential for change in tourist demand. This fact, together with the opportunities opening up with the increased hotel space predicted for these three regions, will boost even more investment in this kind of activity.”
The attractiveness of Lisbon owes much to a record year on the part of RevPar, which grew 8.1% to 74 euros, boosted especially by the 7.1% rise in the average price per room to 100 euros, with an occupancy rate of 74.3%. In this scenario, 10 new hotels opened in the city, and in the next 2 years, another 21 hotels are due to open.
In Porto, with an increase of 16.9% in RevPar to 61 euros and 73.7% occupation, it is also important to note that 15 new units opened last year, with 6 more expected for this year. 10 other hotels are awaiting council approval, according to JLL.
A consolidated tourist destination, the Algarve attracts more attention from private capital investors, high net worth individuals and institutional investors. In 2016, average occupation was 60.6%, with a RevPar of 69 euros. There are 138 units at present, with 18,000 rooms, 80% of which are 4 and 5 stars.
Karina Simões also notes in relation to hotel investment that. “The great challenge will be to reconcile supply and demand. All the euphoria surrounding tourism has an obvious impact on asset value and some proprietors are beginning to demand yields in line with countries like Spain, France and the United Kingdom, when, from the operational point of view, indicators are still far from these realities, in spite of strong growth. This clash in expectations could render the completion of some transactions inviable.”