Europe -  Lisbon

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Lisbon benefits from excellent links by road, rail, sea and air. Portela International Airport is just seven kilometres from the city centre and lies within the city limits. The Port of Lisbon is the busiest on the European Atlantic coast, and it has three berths for cruise ships. The city also has marinas for private boats at various docks, an expanding rail network and an underground (metro) system. Road access is also deemed excellent. Lisbon’s hotel market shows a fairly strong seasonality pattern due to a predominant leisure segment, given the more favourable weather conditions compared to many other European cities. The high season runs from April to July and resumes in September and October. Historically, Lisbon gained substantial recognition by hosting the Expo 98, the 2004 European Football Championships (the largest sporting event in Portugal’s history) and the EU presidency in 2007. A major inducer of demand is Rock in Rio Lisboa, one of the biggest pop/rock festivals in the world, with an attendance of roughly 350,000. The event, originally planned for June 2020, was postponed due to COVID-19 and is now expected to take place in June 2022. The Web Summit and Fish & Flavours Lisbon are other key demand inducers. The city hosted the 2020 UEFA Champions League quarter-finals, semi-finals and the final in August 2020. However, the matches did not generate real additional demand as they were played behind closed doors.

Between 2014 and 2019, more than 4,400 hotel rooms were added to the market and, according to Turismo de Lisboa, Lisbon hotel openings for 2022 amount to 12 projects, providing some 1,800 additional hotel rooms. The city’s five-year pipeline of 45 projects is substantial, at 16.6% of the existing room supply. Over the past ten years, occupancy grew from the mid-60s to the mid-70s in 2019, reaching just below 80.0% in 2017, before reducing slightly over the next two years due to supply growth and more subdued visitor growth. Meanwhile, Lisbon’s average rate performance increased significantly over 2014-2019, growing at a compound annual rate of 7.9%. This resulted in an impressive RevPAR CAGR of close to 10.0% over the same period. Since the start of the COVID-19 pandemic, Lisbon’s performance has been strongly impacted, with RevPAR shrinking to around 20% of the 2019 level in 2020 and 25% in 2021, a loss somewhat more pronounced than those of other gateway European cities.

The Lisbon hotel market is becoming increasingly liquid with several major transactions taking place in 2019/20, including the three-hotel Minor PTG portfolio acquired by Invesco Real Estate for around €313 million in June 2019 and the four properties sold as part of the Bernardino Gomes portfolio for a reported €36 million in February 2020. More recently, in 2021 four properties transacted in Lisbon for a total volume of €59.5 million. The assets traded include the 188-room B&B Lisbon Airport, the 130-room Exe Saldanha, the 90-room Diplomatico Hotel and the 59-room InterContinental Estoril. Our 2021 HVI analysis indicates that hotel values in Lisbon increased by 5.3% in 2021 over the previous year.

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: More than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA

[email protected]
  • +44 20 7878 7722 (w)
Nikola Miljković

[email protected]
  • +44 20 7878-7724 (w)
  • +44 7 593572865 (m)
Mathilde De Bona

[email protected]