Algarve strengthens lead as Portugal’s top tourism destination – Portugal Resident
The Algarve has reinforced its position as Portugal’s leading tourism destination, with industry leaders highlighting a successful shift towards higher-value tourism after accommodation revenues continued to rise despite a slight fall in overnight stays last year.
According to the National Statistics Institute’s (INE) Tourism Statistics 2025, the Algarve remained the country’s most popular tourist region, accounting for 25.6% of all overnight stays nationwide and retaining the largest accommodation capacity in Portugal.
While overnight stays slipped by a modest 0.2% in 2025 following slower growth in 2024, tourism income continued to climb. Total revenues at tourist accommodation establishments increased by 6.1%, reflecting what sector representatives describe as a healthier, more sustainable growth model.
“The Algarve is today a mature and consolidated destination that no longer competes on volume, but on the quality of the experience it offers throughout the year,” said André Gomes, president of the Algarve Tourism Board (RTA).
“The slight moderation in overnight stays recorded in 2025 does not affect that trajectory. On the contrary, it is the natural reflection of a destination that has chosen to grow in value in a sustainable way.”
Gomes pointed to more recent figures as evidence that the strategy is paying off, noting that accommodation revenues in the Algarve rose by 10.5% in May this year to €179 million.
The region also continued to dominate Portugal’s tourism infrastructure, with 1,235 tourist accommodation establishments and the country’s largest bed capacity, representing 23.3% of the national total.
Although Portugal’s overall tourism sector continued to expand in 2025, growth moderated after several years of exceptionally strong performance. The country welcomed 29.9 million international visitors, up 3.3% on the previous year, while accommodation establishments recorded 89.7 million overnight stays, an increase of 1.6%.
The Algarve continued to attract the largest share of international visitors, accounting for 28.7% of all overnight stays by foreign tourists in Portugal. British and Irish visitors remain particularly important, with the region receiving 57.3% of all UK overnight stays and 73.1% of Irish overnight stays recorded nationwide.
Executives argue that this reflects the Algarve’s enduring appeal in its core markets while efforts continue to diversify demand and attract visitors with greater spending power.
Cristina Siza Vieira, executive vice-president of the Portuguese Hotel Association (AHP), said the industry’s objective is not to reduce visitor numbers but to achieve sustainable growth through fair pricing and stronger market positioning.
“The strategy has not changed,” she said. “We have refined the markets where we want to attract more tourists and the type of visitor we are looking for.”
She added that Portugal has been gaining market share in several international markets whose travellers are willing to spend more during their holidays.
Gomes also stressed that the official figures underestimate the Algarve’s true tourism performance because they exclude local accommodation establishments with fewer than 10 beds.
“This represents a very significant share of the Algarve’s accommodation offer, with an estimated potential of more than eight million overnight stays a year,” he said. “The region’s real tourism weight is therefore substantially greater than the official statistics suggest.”
The Algarve remains one of Portugal’s strongest tourism pillars alongside Greater Lisbon and Madeira, with Lisbon and the Algarve together generating more than half of all tourism accommodation revenues in the country last year.
While challenges such as seasonality and reliance on key international markets remain, industry leaders say the figures underline the Algarve’s successful evolution from a destination focused on visitor numbers to one increasingly driven by quality, value and year-round appeal.
