In the most recent survey on the hotel market, Colliers International studied the performance of Lisbon and Porto’s hotel market and concluded that 2016 will be a year with new highs. The growth pace of occupancy and prices, in both cities, is quite unusual in the European scene.
This survey approaches the most important variables in both cities hotel market and answers the most pressing questions.
Will tourism continue to grow?
Yes, in 2016 tourism growth will be unusual. Gustavo Castro, Colliers Research, adds that “to combine fast paced increase in rates and occupancy is the goal for any hotel manager. In 2016, Lisbon and Porto’s occupancy rate will close above 70% and Lisbon’s RevPAR will stay above 70 euros”. This increase has attracted new players into the market, prolonging an on-going trend of new hotels in Lisbon and Porto.
And how many new hotels will open?
Colliers expects, at least, 2.500 new hotel rooms, in Lisbon and Porto, over the next 2 years, which represents a 10% increase. This is an on-going trend, since over the last 3 years, 3.500 new hotel rooms opened in both cities. Joaquim Chambel, Colliers International MD, points that “opening a hotel is, usually, time consuming, but over recent years, a welcome combination of simpler administrative procedures and strong interest from hotel operators, allowed for these new openings”. Obviously, “the increase in supply will impact the future market performance” alerts Joaquim Chambel.
What will happen in the near future?
The increase in supply at the described pace will always bring consequences to occupancy and, consequently, to rates. However, tourists growth will tend to mitigate this trend, not being expectable any reduction in the growth rate, which along the years, has stayed in a steady growing pattern. Gustavo Castro highlights that “supply increase may decrease occupancy, making some hotels tempted to lower rates in order to hold occupancy high”. However, “since an important slice of demand has preferred different forms of accommodation, hotels will have an interesting challenge in addressing that slice, which may help them match this increased competitiveness”.
In conclusion, in 2016, Lisbon and Porto’s hotel market will reach new highs, while 2017 will bring new challenges, both for the hotel management, but also for the hotel ownership. For hotel managers, 2017 will be another year with tailwind, however in a more troubled sea.