Algarve Accommodation Costs Under Scrutiny Amid Tourism Boom

As summer temperatures rise, the affordability of vacations in the Algarve region of Portugal is being questioned, with some Portuguese travelers seeking alternatives due to rising costs.While the president of the Algarve Hotels and Tourism Enterprises Association (Aheta) insists that the Algarve is “not a more expensive destination than other destinations,” a recent survey casts doubt on the availability of budget-kind accommodations.

The Great Algarve Price Debate

Hélder Martins, president of Aheta, stated that hotel prices have increased by 3% to 5%, attributing the rise to standard supply and demand dynamics [[1]]. He also claimed that a search on Booking.com revealed approximately 4,500 accommodations available for a week in August,with 5% priced between 20 and 50 euros per day and 25% between 50 and 100 euros per day.

did You Know? Portugal saw a 14.4% increase in tourism revenue in the first quarter of 2024, reaching €3.8 billion [[2]].

reality Check: Accommodation Availability

Though, an autonomous survey conducted on a Saturday afternoon, referencing accommodations for two people, challenged these figures. While approximately 4,452 accommodations were indeed listed as available for a week in August, the number of truly affordable options was significantly lower.

Contrary to Martins’ claim that 5% (225) of accommodations would cost between 20 and 50 euros per day, the survey found only six such options. These included a caravan, bunk beds in a youth inn, a room with a shared bathroom in Mértola (far from the Algarve coast), and only one private room without breakfast.

The survey also disputed the claim that 25% (1,125) of accommodations were priced between 50 and 100 euros daily. Rather, only 161 accommodations fell within this range, with only six located directly on the beach. A significant portion of these options involved shared rooms or bathrooms, caravans, or chalets, with only a small number including breakfast.

Pro Tip: Consider traveling to the Algarve during the shoulder season (spring or fall) for possibly lower prices and fewer crowds.

Impact on Portuguese Tourists

The discrepancy between the advertised and actual availability of affordable accommodations has raised concerns about the accessibility of the Algarve for portuguese tourists.”We regret – and we have always regretted – that there are many Portuguese who have a smaller pocket and that cannot reach [these prices],” acknowledged the president of aheta.

Martins questioned whether the Algarve should focus on selling rooms at 20 euros, ultimately answering “No.” He argued that the region needs to increase quality to justify higher prices and improve wages for employees. “We have to see the price/quality ratio and this in the Algarve is arguably better,” he stated, drawing a comparison to the French Côte d’Azur and suggesting that some Portuguese tourists may need to travel during off-peak seasons.

Shifting Focus: International Tourism

Martins emphasized that hotels and companies in the Algarve are increasingly focused on attracting international tourists rather than solely catering to the Portuguese market. This shift reflects a broader trend in the region’s tourism industry, which is prioritizing higher-spending visitors and premium experiences.

Will the Algarve remain a popular destination for Portuguese tourists,or will rising prices force them to seek more affordable alternatives? How can the region balance the needs of both domestic and international visitors?