Europe -  Lisbon, Portugal

Lisbon is one of the oldest cities in the world, predating other European capitals such as London and Rome. The city offers a large variety of cultural and architectural attractions and has the most dynamic economy in Portugal. The service sector employs more than 60% of the working population owing to the heavy concentration of service providers in the capital, public administration and the fact that Lisbon is the largest consumer centre in the country. In recent years, the city has hosted international events such as the 2014 Champions League Final; Rock in Rio, a music festival staged in Lisbon every two years; and the 2016 Web Summit, a technology conference held annually (since 2009) which recently moved to Lisbon, putting the city on the map as a conference destination.

The evolution of passenger movements at Humberto Delgado Airport over the last five years has been among the most impressive in Europe, with a compound annual growth rate of 14% between 2013 and 2017. To cope with growing demand, a new airport has been proposed in Montijo, two kilometres south of the city centre on a site currently used by the Portuguese Armed Forces. The viability and sustainability of this project are still to be established. Additionally, Lisbon is becoming an increasingly popular port of call for cruise ships and the new terminal inaugurated in November 2017 is expected to drive additional demand.

The city has benefitted from the unfortunate circumstances many destinations across Europe are currently experiencing in the wake of terrorism, as illustrated by the substantial increase in the number of visitors. The hotel market experienced another extremely impressive year with a RevPAR growth of more than 20%, driven by both occupancy and average rate. Despite three consecutive years of considerable growth in average rate, the Portuguese capital remains a very attractive and affordable destination in comparison to other European gateway cities.

While a significant number of rooms has already entered the market in recent years, new supply remains extremely strong with another 2,000 rooms (10% of total supply) expected to open by 2020. The pipeline comprises mainly small boutique hotels operated principally by local players with the exception of the 239-room Meliá Lisboa.

Hotel transactions in Lisbon have been limited in recent years. The most recent single-asset transactions include the 95-room Lux Lisboa Park Hotel for €16 million (€168,000 per room) in February 2017 and the 56-room The Vintage Lisbon in December 2017, although the price paid remains undisclosed. Portugal, and particularly Lisbon, is increasingly in the sights of international investors, developers and lenders after the debt rating upgrade from Standard & Poor’s in September 2017, providing further confidence in the market and a reduced cost of debt.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Lisbon RevPAR Change (€Euro)

Lisbon RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA
sperret@hvs.com
  • +44 20 7878 7722 (w)
Simon Hulten
shulten@hvs.com
  • +44 020 7878-7775 (w)