Hotel Investment Surge: Portugal Ranked 4th in Europe as 2026 Deals Already Outpace 2025

Portugal real estate is heating up — and hotel investors have noticed

Portugal real estate is catching fresh investor attention after the latest CBRE survey placed the country fourth among Europe’s most attractive destinations for hotel investment in 2026. The finding is more than a rank on a chart; it reflects a shift in capital flows into hospitality assets across southern Europe, and it has immediate implications for anyone watching the property market in Portugal.

The headline numbers are hard to ignore: Portugal is 4th in country rankings, Lisbon is 6th among European cities for hospitality investors, and CBRE reports that more than 90% of investors plan to maintain or increase hotel allocations in 2026. Nearly one-third of respondents expect to significantly expand spending this year. Those facts set the stage for what CBRE’s local head calls a potentially record-breaking year for hotel deals in Portugal.

In our analysis, these results matter because they combine investor sentiment with tangible activity on the ground: according to Gilberto Martins, Head of IP Hotels at CBRE Portugal, investment volume in the first four months of 2026 has already exceeded the total invested during the whole of 2025. That is a concrete signal that demand is not just talk.

What the CBRE survey actually shows (key findings)

The European Hotel Investor Intentions Survey 2026 by CBRE is the source of the ranking and the market sentiment. Key takeaways you need to know:

• Portugal ranks 4th among European countries for hotel investment attractiveness in 2026.
• Lisbon moves up to 6th among European cities for hospitality investment interest.
• More than 90% of surveyed investors plan to keep or increase hotel investment in 2026.
• Nearly one-third expect a significant increase in hotel spending in 2026.
• The Iberian market together with Italy now account for more than 40% of total hotel investment intentions across Europe.
• Investor appetite is strongest for value-add opportunities: assets that can be renovated, repositioned, or otherwise upgraded to raise income and asset value.

Those findings show strong demand and a clear preference for repositioning plays rather than pure core, fully stabilized hotels.

Why Portugal is attracting hotel capital now

There is no single cause for rising investment interest in Portuguese hotels. Instead, a cluster of factors is aligning to make the country attractive to hotel investors looking for yield and upside.

• Market inefficiencies: Some hotel stock in Portugal is older or under-managed, which creates scope for refurbishment and repositioning to lift revenues and margins.
• Operator interest: Global and regional hotel brands are actively seeking to expand in gateway cities like Lisbon and in coastal resort markets, making partnership models viable.
• Regional momentum: Southern Europe — especially the Iberian Peninsula and Italy — now carries over 40% of investor intent in Europe’s hotel sector, amplifying flows into Portugal.
• Strong investor confidence: Despite macroeconomic instability and geopolitical tensions reported in the survey, investor confidence in the hotel sector remains high.

From a strategic viewpoint, Portugal offers investors a set of trade-offs: rental yields and operational upside that are often higher than in northern European core markets, but with risks tied to tourism concentration and seasonal demand. That mix is exactly what drives interest in value-add hotel deals.

What “value-add” means for hotel investors in Portugal

The CBRE survey highlights value-add as the most attractive strategy. In concrete terms, value-add hotel investment in Portugal typically includes:

• Renovation and refurbishment to upgrade guest experience and justify higher room rates (ADR).
• Repositioning a property from budget to midscale or lifestyle segments, widening the target customer base.
• Operational overhaul through changes in management, new revenue management systems, and sales and marketing optimization to lift occupancy and RevPAR (Revenue per Available Room).
• Asset consolidation or conversion — for example, turning underused commercial space into additional rooms, F&B outlets, or event facilities.

Value-add strategies are attractive because they can deliver step-change returns when executed well. But they need more active asset management, more upfront capital expenditure, and a realistic timeline for re-stabilizing operations.

What this means for different types of investors

We see three broad investor profiles active in Portugal’s hotel market, each with different implications:

• Institutional investors / funds
  • Seeking scale and portfolio diversification, often via platform deals or joint ventures.
  • Prefer professional management contracts or equity stakes in local operating companies.
• Private equity and opportunistic investors
  • Focus on value-add plays where capex and repositioning can materially increase valuations.
  • More willing to accept operational risk in return for higher IRR targets.
• High-net-worth individuals and family offices
  • May pursue single-asset strategies or conversion projects with mixed-use potential.
  • Often rely on local partners for operations and compliance.

For all types, financing conditions and leverage appetite will shape transaction structures. Lenders are scrutinizing pro forma performance, operator strength, and exit assumptions more closely than before, so realistic underwriting of occupancy and ADR ramp is essential.

Risks and headwinds investors must weigh

The CBRE survey notes investor confidence is strong, but it is not unconditional. Several risks are relevant for those targeting Portugal’s hotel and property market:

• Macroeconomic volatility: Economic instability in Europe can reduce discretionary travel and corporate demand, pressuring occupancy and rates.
• Geopolitical tensions: Shifts in source markets for tourism can create sudden demand changes.
• Seasonality: Portugal’s coastal and resort hotels face concentrated summer demand, which can compress cash flows outside peak months.
• Construction and capex inflation: Renovation budgets can escalate; contingency planning is essential.
• Operational risk: Repositioning projects depend on recruitment and retention of skilled hotel managers and staff.
• Regulatory and tax changes: Any shifts in local hospitality or property taxation, short-term rental rules, or zoning can alter projections.

We advise investors to stress-test cashflows under multiple scenarios and to build realistic timelines for stabilization after renovation or repositioning.

Practical steps for investors entering the Portuguese hotel market

If you are considering hotel investment in Portugal — either directly or through funds — here are practical steps based on market experience:

1. Market and submarket analysis
   • Identify whether you want city-centre Lisbon assets, airport hotels, or coastal resorts. Each segment has different demand drivers and seasonality.
2. Operator and brand due diligence
   • Assess the quality of management companies, their cost structure, and their distribution capabilities. Operator selection is a major value driver.
3. Underwrite conservatively
   • Use conservative occupancy and ADR ramp assumptions, and include a realistic schedule for capex and soft costs.
4. Build in capex contingency
   • Budget for higher-than-expected refurbishment costs and possible delays in permitting or construction.
5. Consider JV structures
   • Local partners can provide operational knowledge and help navigate regulatory or labour markets.
6. Exit planning
   • Have a clear exit thesis: refinance, lease-up sale, or listing in funds.