Portugal – Portugal has emerged as the third most attractive country for hotel investment in Europe, according to a recent 2025 survey conducted by the esteemed real estate consultancy firm, CBRE. This significant rise in appeal places Portugal alongside established powerhouses Spain and Italy, which secured the first and second positions, respectively.

The CBRE survey highlights a remarkable surge in Portugal's attractiveness to hotel investors, with its capital city, Lisbon, taking center stage as a particularly desirable market.

Lisbon's Meteoric Rise in Investor Appeal

Lisbon has experienced a dramatic ascent in the ranking of Europe’s most attractive cities for hotel investment, jumping to fourth place. This is a significant leap from 2024 when the city was not even listed among the top investment hotspots. This change underscores Lisbon's growing competitiveness and its increasing allure for investors seeking promising opportunities in the hospitality sector.

Duarte Morais Santos, Director of Hotels at CBRE Portugal, commented on this impressive growth: "The Portuguese hotel sector has firmly established itself as one of the most dynamic in Europe, fueled by resilient tourism and an increasingly sophisticated market. Portugal’s four-place rise in the ranking clearly demonstrates the country’s recognized strength and significant potential for sustainable growth in this sector."

Strong Confidence Despite Geopolitical Concerns

Despite prevailing geopolitical uncertainties identified as a major challenge for overall investment in 2025, confidence within the European hotel market remains robust. The survey reveals that over 90% of investors are planning to maintain or even increase their capital allocations to the hotel sector, signaling a strong belief in its continued performance and potential returns.

Spain and London Retain Top Positions

For the second consecutive year, Spain has held its position as the leading destination for hotel investment in Europe. This sustained dominance is attributed to the country's strong market fundamentals and consistent, high tourism demand.

Italy has climbed to second place, surpassing the United Kingdom. This shift reflects the benefits of Italy's diversified hospitality sector and the emergence of new international hotel groups establishing a presence in the country. Portugal now shares the third position with the UK, further solidifying its status as a key investment market. France and Greece follow in fourth and fifth places, respectively.

At the city level, London continues to be the most attractive for hotel investment. Madrid has maintained its strong appeal in second place, while Rome has risen to third from its fourth-place ranking in the previous year. The inclusion of Lisbon in fourth place, alongside Barcelona in fifth, marks a significant achievement for the Portuguese capital, highlighting its growing prominence on the European investment map.

Urban Centers Remain the Preferred Choice

The CBRE survey also indicates that urban properties continue to be the top investment choice for the majority of investors. Approximately 65% of those surveyed favor central business districts and major gateway cities. This preference is driven by the consistent long-term demand from both business and leisure travelers in these prime locations.

Interestingly, secondary cities are also gaining traction among investors, with 12% identifying them as the most attractive opportunities. This growing interest is supported by improvements in infrastructure and evolving travel patterns that are making these secondary locations more appealing to a wider range of travelers.

Kenneth Hatton, CBRE’s Head of European Hotels, emphasized the fundamental drivers of this investment trend: "The ongoing imbalance between supply and demand across Europe remains a key driver for the sector. We are witnessing strong competition among buyers seeking prime assets, which is reflected in last year’s impressive hotel investment volume, showing a surge of 34% compared to 2023—the highest annual growth of any sector in the region."

Ronald Chan, CBRE’s European Hotels Research Lead, further elaborated on the positive outlook for the sector: "Europe was the most visited region worldwide last year, offering a diverse array of destinations, from vibrant urban centers to picturesque coastal towns. The luxury subsegment, in particular, has experienced impressive growth in average daily rates, and there are still significant opportunities for investors looking to enter or expand within this dynamic market."

Portugal's Thriving Tourism Sector: A Key Driver

Portugal's ascent as a hotel investment hotspot is closely linked to its thriving tourism industry. In 2024, Portugal welcomed a record-breaking estimated 30 million tourists, demonstrating the country's enduring appeal to both domestic and international travelers. This robust tourism sector provides a strong foundation for the hotel industry, ensuring consistent demand and attractive occupancy rates. Lisbon, in particular, has benefited from this growth, attracting a significant portion of these visitors with its rich history, vibrant culture, and increasing number of high-quality accommodations.

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