Portugal has been named the 7th most attractive country in Europe to invest in hotels.

According to the findings from the ‘2024 European Hotel Investor Intentions Survey’ compiled by CBRE, there are “encouraging prospects for the sector.”

Around 90% of investors are planning to maintain or increase their volume of investments in the country’s tourism sector next year, The Portugal News reports.

“This optimism is fuelled by the solid performance and resilience of hotel assets, which should suffer fewer discounts compared to other types of assets. However, the possible price adjustment is also an important factor for some investors, with 28% citing it as the main reason for increasing investment in hotel assets”, according to the CBRE statement.

Yet despite the confidence, the research underscores the cost of capital which “is the main challenge for hotel investors in 2024, driven by rising interest rates as a way to combat inflation.”

Moreover, the industry is also affected by a shortage of qualified labour, says the study.

“In Europe in particular, geopolitical instability is another topic that investors are following closely”, states CBRE.

The study also shows that Spain leads the list of the most attractive countries for hotel investment in 2024. Portugal appears for the first time in 7th place, “demonstrating great potential,” thanks to its diverse destinations (such as city breaks in Lisbon and Porto, beach destinations in the Algarve and Comporta, and nature experiences in Madeira, the Azores, and Alentejo), as well as the quality of its service.

“The results of this study indicate that the European hotel sector is positioned for a year of good opportunities. Growing investor confidence and strong demand for hotels in key destinations are clear signs that the sector is resilient and ready to face future challenges. With innovative strategies and a focus on added value and offering experiences, we hope to see continued positive evolution in the hotel market in 2024,” stated Duarte Morais Santos, Hotels Director at CBRE.

The '2024 European Hotel Investor Intentions Survey' shows “that the hotel sector continues to be an attractive investment, with strong prospects for 2024. Stability and growth, combined with the popularity of European destinations, make the hotel sector a solid choice for investors,” the report adds.