Only Spain and Italy rank as more attractive
Portugal has ranked as the third most attractive destination for hotel investment in Europe in the European Hotels Investor Intentions Survey 2025, carried out by real estate consultants CBRE.
According to CBRE, the survey shows that Portugal is registering “notable growth” in how attractive it is becoming to investors in the hotel industry, with only Spain (first) and Italy (second) ranking higher than Portugal in the survey.
Lisbon in particular is becoming a hotspot for hotel investors, ranking fourth in the list of Europe’s most attractive cities for hotel investment. For context, the Portuguese capital was not even on the list in 2024, reflecting a “significant increase in its competitiveness and appeal to investors,” the consultants point out.
“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 recognised strength and potential for sustainable growth,” said Duarte Morais Santos, Director of Hotels at CBRE Portugal.
Those surveyed cite geopolitical concerns as the main challenge for investment in 2025. However, confidence in the European hotel market remains strong, CBRE reports, with over 90% of investors planning to maintain or increase their capital allocation in the sector.
Spain remains the top destination for hotel investment in Europe for the second consecutive year, backed by “strong market fundamentals and sustained tourism demand”. Italy has overtaken the UK for second place, benefiting from a “diversified hospitality sector and the emergence of new international hotel groups”. Portugal and the UK share the third position, while France and Greece hold fourth and fifth place, respectively.
London has retained its status as 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 milestone for the Portuguese capital.
Urban properties remain the preferred investment choice, with 65% of surveyed investors favouring central business districts and major gateway cities due to their long-term demand from both business and leisure travellers. Meanwhile, secondary cities are gaining traction, with 12% of investors seeing them as the most attractive opportunities, supported by improved infrastructure and evolving 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 witnessing 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, and it is a market known for a diverse range of destinations from vibrant urban centres to idyllic coastal towns. The luxury subsegment, in particular, has stood out with impressive average daily rate growth, and we believe there are still opportunities for those looking to enter the market.”
