12 Oct, 2017
Lisbon: One Of The Best Place To Grow
Following three consecutive strong years in RevPAR growth, we forecast continued growth in Lisbon’s hotel market. Limited new supply and large conferences and events planned in the city are expected to push ADR further with occupancy reaching record high levels.
Lisbon is the capital of Portugal and the oldest city in Western Europe. Its history, culture, gastronomy and sunny sky are some of its major attractions. In 2016 Lisbon was awarded with the Wallpaper Design Award for ‘Best City', and the World Travel Awards for Europe’s leading cruise destination and cruise port. Moreover, it is third in the Time Out City Index for most animated cities and is in TripAdvisor’s Top 25 Worldwide Destinations. China Daily describes Lisbon as a ‘city for lovers', due to its architecture and history, including Sintra landscapes.
Five Lisbon hotels won awards in 2016 including: Europe’s leading business hotel, leading design hotel, leading landmark hotel, luxury hotel & conference centre and luxury rooftop view hotel. Lisbon figures in the list of 100 best reputation hotels of the world, by Trivago.
Occupancy levels in 2016 grew 1.0% when compared to the previous year. ADR grew 7.2% to €98 and the RevPAR reached €73, which represented an increase of 8.2% when compared with 2015.
During 2017, 13 new hotels are expected to open in Lisbon, adding about 1,000 new rooms to the city (5% of actual supply). Additionally 120 rooms will be added by extensions to existing hotels. The supply increase focus mainly on new upscale and small boutique hotels.
Lisbon is both a cultural and business city with a good safety and security record and this is expected to help increase Lisbon’s visibility in 2017 and 2018.
According to Portugal’s tourism statistics, air traffic to Lisbon grew 11% during 2016 when compared with previous year. Among others, Ryanair announced five new routes to Lisbon (Bologna, Glasgow, Luxemburg, Toulouse, Wroclaw); Delta Airlines will open a New York-Lisbon route and Capital Airlines will provide an air bridge between Lisbon and Hangzhou (China).
Lisbon hosted some major events in 2016. Most will repeat. Web Summit was considered an absolute success and the event will stay in Lisbon at least until 2018 (some foresee 2020), which promises to attract even more participants than the first meeting (53,000 attendees in 2016, expected to reach 60,000 attendees in 2017). Another major event being held in Lisbon in 2017 will be the European Association for the Study of Diabetes conference that should bring about 18,000 tourists to Lisbon. In 2017, the city will be the Ibero-American Capital of Culture. In addition there are plans to host several cultural conferences.
The Portuguese economy continued its slow recovery in 2016 with GDP growth of 1.2%, slightly low of expectations, and unemployment falling further to 11.0%. The economic recovery is expected to continue at 1.2% in 2017 and 1.1% in 2018, lower than previously expected, largely due to uncertainty in the banking sector holding back investment and an unemployment rate that remains high.
Following three consecutive strong years in RevPAR growth, we forecast continued growth in Lisbon’s hotel market. Limited new supply and large conferences and events planned in the city are expected to put further pressure on ADR with occupancy reaching record high levels.
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