Portugal’s Tourism Sector Reaches New Heights as Economy Shows Mixed Signals in 2025

Tourism Drives Portugal’s Economic Success

Portugal’s Travel & Tourism sector is experiencing remarkable growth in 2025, with the industry projected to contribute €62.7BN to the national economy, representing 21.5% of GDP. This impressive figure towers 38% above the 2019 peak.

The sector is becoming a major employer, supporting 1.2 million jobs – approximately one in four positions across the country. International visitor spending is expected to reach €33.1BN, while domestic spending is forecast to hit €22.9BN, showing significant growth in both international and local tourism markets.

Current Economic Landscape

The beginning of 2025 has presented some challenges, with private consumption experiencing fluctuations and both business and consumer sentiment deteriorating amid geopolitical uncertainty. However, there’s positive news on the inflation front, as it has resumed its downward trajectory in the first quarter of 2025, with projections showing a decrease from 2.7% in 2024 to 2.1% in 2025.

Tourism Trends and Challenges

The latest industry trends show a strong preference for personalised and tailor-made travel experiences, along with increased demand for authentic cultural experiences in cities. However, the sector faces certain challenges. The most pressing issues include a shortage of qualified human resources, cited by 51% of industry experts, rising prices and inflation concerns, and the impact of international conflicts and geopolitical instability.

Future Outlook

Looking ahead, projections for 2035 are optimistic, with Travel & Tourism expected to contribute more than €74.6BN to GDP, accounting for 22.6% of the national economy. The sector is anticipated to support 1.4 million jobs, further cementing its position as a crucial driver of economic opportunity and social development.

In response to growing domestic needs, the government has recently announced increased investment in affordable housing, demonstrating a commitment to managing the country’s rapid growth while addressing local concerns.