"I don't see crowds of tourists moving around the city like in previous years", notes Sofia Maia, a hotel owner in Porto. "And the restaurants don't seem as full as they used to. However, I can't complain about the occupancy of the beds", adds the woman from the northern Portuguese city.
As summer slowly draws to a close, Portugal's tourism sector is making a mixed assessment - the number of visitors is stagnating, and they are no longer spending as generously as before.
Up until 2025, Portugal enjoyed a significant increase in the number of visitors. According to the state statistics institute INE, in 2024 it reached an impressive 9.3 percent, which meant 2.5 million people more than the previous year. In 2025, the number of foreigners increased by only 3.3 percent, and this slower growth seems to continue. "In the first half of the year, we welcomed 3.1 percent more visitors", explains André Gomes, president of the Algarve Tourism Association. "Overnight stays increased by 2 percent and revenues by 7.7 percent."
Has Portugal reached its tourist limit?
The number of foreigners visiting Portugal has reached around 30 million a year, three times the country's population. 11 percent of them are Germans, the second largest group of tourists after the British. According to the statistics office, tourists spent an impressive 29.4 billion euros last year, representing 11.8 percent of Portugal's gross domestic product. And yet, there are already alarming signals: "We have clearly reached the limits of tourism growth", says economics professor João Duque.
But politicians still seem to dream of limitless growth - the planned new airport in Lisbon is to welcome at least 56 million people a year from the middle of the next decade, and almost 200 new hotel buildings with around 11,000 rooms have been approved in the capital Lisbon and Porto. Economist João Duque warns that not all the planned projects will likely be realized. On current trends, a significant surplus is likely to arise.
Prices have skyrocketed
These trends are being observed at already quite high prices. "A simple umbrella and sunbed on the Algarve beach can cost 200 euros a day or more," says Professor Duque. "When visiting a restaurant, the 100 euro per person limit can also be reached quickly." That's why many tourists are shopping in supermarkets and eating at the place where they are staying. This means that more and more tables in restaurants are empty.
"Foreign guests order the cheapest items on the menu and often even share one dish," complains Celeste Botello, who runs a restaurant in Nazaré, a resort extremely popular with surfers. The crowds are more likely to walk around than fill the restaurants, and the days when Portugal was a cheap holiday destination are long gone, Duque emphasizes.
Unlike the tourism industry, however, many Portuguese seem to be enjoying the drop in tourist numbers: "There are seats available again in restaurants," says João Martello from Lisbon. "The waiters are also more friendly to the locals."
Luxury, not mass tourism
A rethinking of the strategy is necessary, says João Duque, and a shift from cheap mass tourism to the expensive and luxurious segment. "Five-star hotels throughout the country are very well filled. There is still room for growth. But special offers should also be offered - from full board with exotic dishes to themed holidays offering unique experiences,", believes the economics professor.
This is exactly what tour operators in the Algarve want to work on, says André Gomes. "We want to offer our visitors increasingly high-quality services. Whether it's gastronomy, golf, coastal walks or boat trips." According to the tourism expert, the times when the number of tourists increased by several million annually are finally over.
This is not necessarily a bad thing, admits hotelier Sofia Maya. "If the growth had continued at this high rate, there was a danger that parts of the country would be taken over by tourists," she says.
Author: Jochen Faget