Domestic Travellers Power Portugal to 3.3 Million Hotel Guests in May as the British Market Cools

Portugal's tourism engine kept running at record pace in May, but the fuel is changing. The country's hotels, guesthouses and short-stay flats hosted 3.3 million guests during the month — up 3.9% on May 2025 — and logged eight million overnight stays, a 2.8% rise, according to figures released by the Instituto Nacional de Estatística (INE — National Statistics Institute). What stands out is who is driving the growth: Portuguese residents, not foreign visitors.

The numbers behind the record

• Revenue: Total accommodation revenue reached €755.7 million (+5.8%), of which €575.1 million came from room charges alone (+4.8%) — receipts rising faster than guest numbers, a sign of firmer prices.
• Residents lead: Overnight stays by Portuguese residents jumped 7.6% to 2.1 million, far outpacing the 1.1% rise among non-residents, who accounted for 5.9 million nights.
• A softening top market: The United Kingdom remained the single largest source of foreign nights with a 19.0% share, but British demand slipped 1.1%. Brazil (+9.3%) and Germany (+8.6%) picked up the slack, while France fell 11.3%. The ten biggest markets together supplied 76.2% of non-resident nights.

From boom to consolidation

After years of double-digit expansion, 2026 is shaping up as a year of consolidation rather than breakneck growth. Industry forecasts point to roughly 34 million guests over the full year and annual tourism receipts approaching record territory — Portugal's tourism exports hit an all-time high of about €29 billion in 2025. May's data fits that pattern: still growing, still setting records, but at a gentler, more sustainable clip, with domestic travellers cushioning a plateau in some foreign markets.

The mix matters. A tourism recovery led by residents is less exposed to a single wobble abroad — a weaker pound, a bad-news cycle, an airline route cut — but it also concentrates summer demand on the same coastline and cities that locals want to enjoy. And revenue growing faster than volume confirms what anyone booking a room already knows: the average night in Portugal keeps getting more expensive, a dynamic visible in everything from hotel rates to the prime property market.

What This Means for Expats

• Cost of living: Tourism prices ripple outward. Neighbourhoods with heavy short-stay demand tend to see higher rents and pricier restaurants and services — a pressure that compounds Portugal's already stretched housing market, itself the target of new measures like the reduced construction VAT.
• Jobs: Accommodation, restaurants and transport hire heavily for the season. If you work in or run a hospitality business, resident-driven demand spreads spending beyond the classic foreign hotspots and into shoulder periods.
• Getting around: Expect fuller trains, flights and popular sights through summer. New connections such as Vienna–Ponta Delgada keep widening access, while alternatives to the busiest spots — from Almada's archaeological sites to the interior — reward anyone travelling off the beaten path.

Portugal's challenge is no longer attracting visitors; it is managing success. With residents now among the most enthusiastic travellers in their own country, and international demand broadening beyond a cooling British market, the sector looks durable — provided the country can keep the benefits flowing without pricing locals and long-term residents out of the places tourists come to see. One of Europe's competitive edges, its cheap, renewable-heavy energy, helps hold costs down — but the affordability of everyday life is the balance still to be struck.