While local holidaymakers decrease in the Algarve, hotels are filled with foreign demand

Rising prices and pressure on purchasing power are reducing the number of Portuguese visitors, according to the Algarve Hotel and Tourism Business Association. Demand from the UK, USA, Canada and Northern Europe keeps hotel occupancy above 90 percent.

While hotels in the Algarve maintain high occupancy rates during the summer season, it is stated that the rate of local tourists preferring the region has decreased.

Hélder Martins, President of the Algarve Hotel and Tourism Enterprises Association (AHETA), said in a statement to Rádio Renascença that the rise in prices and the loss of purchasing power have led many Portuguese to more affordable options. According to Martins, some families prefer to postpone their holiday plans and stay in their own regions.

Despite the decline in domestic demand, the occupancy rate in Algarve hotels remains above 90 percent at the end of August. AHETA illustrates this picture with visitors from the UK, USA, Canada and Northern European markets.

The Union expects occupancy to drop to approximately 80 percent in September and October. According to the statement, the number of visitors may decrease during this period; However, the spending power of incoming tourists is expected to be higher.

AHETA estimates that Algarve tourism could finish 2026 around 1 to 2 percent below 2025's record level. International conflicts and high fuel prices are also among the influential factors in this forecast.

PTNewsHub review: While strong foreign demand in the Algarve keeps hotels full, rising prices are making it harder for Portuguese people to access their own country's resort destination. When tourist density and price pressure increase at the same time, the risk of the region becoming more expensive and less accessible for domestic visitors increases. AHETA's statement stated that this impact does not cause occupancy loss for tourism businesses; However, it shows that holiday preferences are changing.

Sources reviewed:

- Rádio Renascença – AHETA's statement on domestic and foreign demand in the Algarve

- Turismo de Portugal / TravelBI – Algarve Sustainable Tourism Observatory 2025 report