Portugal, the new hotspot for hotel investment

Portugal has been reported as the third most attractive country for hotel investment in Europe, according to a survey made in 2025 by real estate consultants CBRE.

Above Portugal ranks just Spain and Italy.

The survey shows that Portugal has seen significant growth in its appeal to hotel investors, with Lisbon, the country’s capital, in particular being a hotspot.

Lisbon is among the most attractive for hotel investment

Lisbon surged to fourth place on the list of Europe’s most attractive cities for hotel investment, a remarkable jump from not being listed at all in 2024. This change reflects the city’s increased competitiveness and growing appeal to investors.

“The Portuguese hotel sector has established itself as one of the most dynamic in Europe, driven by resilient tourism and an increasingly more sophisticated market. Portugal’s four-place rise in the ranking demonstrates the country’s recognized strength and potential for sustainable growth,” said Duarte Morais Santos, director of hotels at CBRE Portugal.

Despite geopolitical concerns being a major challenge for investment in 2025, confidence in the European hotel market remains high, with over 90% of investors planning to either maintain or increase their capital allocations to the sector.

Spain and London, the top destinations

For the second consecutive year, Spain remains the top destination for hotel investment in Europe. Spain is supported by strong market fundamentals and sustained tourism demand.

Italy has overtaken the UK for second place, benefiting from a diversified hospitality sector and the rise of new international hotel groups. Portugal and the UK share the third position, while France and Greece hold fourth and fifth places, respectively.

London continues to be the most attractive city for hotel investment, followed by Madrid and Rome, which climbed from fourth to third place. Lisbon and Barcelona complete the top five, marking a significant milestone for the Portuguese capital.

According to the same survey, urban properties remain the top investment choice, with 65% of surveyed investors favoring central business districts and major gateway cities due to their long-term demand from both business and leisure travelers. Secondary cities are also gaining interest, with 12% of investors viewing them as the most attractive opportunities, bolstered by improved infrastructure and shifting travel patterns.

“The ongoing imbalance between supply and demand across Europe remains a key driver for the sector,” noted Kenneth Hatton, CBRE’s head of European hotels. “We are seeing strong bids from buyers seeking prime assets, reflected in last year’s hotel investment volume, which surged by 34% compared to 2023—the highest annual growth of any sector in the region.”

Ronald Chan, CBRE’s European Hotels Research Lead, added, “Europe was the most visited region worldwide last year, offering a diverse range of destinations from vibrant urban centers to idyllic coastal towns. The luxury subsegment, in particular, has seen impressive growth in average daily rates, and there are still opportunities for those looking to enter the market.”