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The Portuguese vacation rental market surged ahead in 2023, posting revenue growth of nearly 14% despite ongoing inflationary pressures, short term rental (STR) data specialist Key Data reveals today1.
As part of a review of the Portuguese short-term rental market, the company’s analysis reveals that, so far this year, vacation rental revenues in Portugal have powered ahead by 13.8%.
This means Portugal’s property managers are experiencing significantly better growth than key competitor and neighbor Spain and the wider European market, in large part because its nightly rates are so competitive.
ADRs (Average Daily Rates) in Portugal were €148, 16.4% less than the €178 charged in Spain, and also lower than the European average of €156.
RevPAR (Revenue per Available Rental) in Portugal totalled €60.80, thanks in large part to ADRs climbing 9.2%. The fact ADR has increased so strongly in the face of a consumer spending squeeze indicates that demand remains strong, while occupancy has increased by 4%. Here again, Portugal has fared much better than the Spanish market, with occupancy standing at 41% vs Spain’s 33% — with an average 115 nights sold in Portugal as managers entered the final quarter of the year1. In Spain, RevPAR stood at €57.90 this year while ADR improved by a more modest 5%.
Booking windows were also 5 days longer in Portugal at 65.1 days (up 5%), compared with 60.3 days in Spain. This again is likely a reflection of the better value offered by Portuguese property managers.
The performance of Portugal’s vacation rentals also compared favorably with those across Europe as a whole, where ADRs sat at €156 (up 8.5% annually) leaving RevPAR up 8% at €45.70. Average booking windows were 5% higher at 60 days. The Eurozone’s annual rate of inflation fell to 4.3% in September2 meaning all markets saw RevPAR grow in real terms.
*Scraped vacation rental data from Airbnb & Vrbo, for stays Jan 1 to Oct 9 2023 vs 2022
Sally Henry, VP of Business Development EMEA at Key Data, said: “Portugal’s vacation rental property managers have enjoyed a strong year so far. The better value that tourists have enjoyed there this year has no doubt underpinned the demand that has sent revenues and nightly rates soaring.
“This bodes well given the stress that inflation is still placing on economies and industries around the world. It’s often said that leisure travel is protected from downturns to a large degree because consumers are so unwilling to give up their vacation plans, and Portugal has clearly benefited from visitors shunning long haul and choosing to stay closer to home.”