Crisis in Portugal as tourists ditch 'expensive' hotspot almost as pricey as the Caribbean

Holidays in this popular region of Portugal are now so expensive that a week at a five-star hotel in the Caribbean is cheaper. While hotel occupancy in the Algarve, the southernmost region in Portugal, is above 80%, the tourism sector expected more, and its beaches are far from full.

Thursday's Bank Holiday (Corpus Christi) is not bringing as many Portuguese tourists to the region, and those who are there are complaining about the prices. According to the latest data provided by the National Association of Travel Agencies, cited by SIC Notícias, a week between Albufeira and Vilamoura, from June to August, can exceed €1,500 (£1,280). Meanwhile, in the Caribbean, that amount could get you into a five-star hotel, all-inclusive.

As a result, Portuguese residents are packing their bags, but not for a staycation, but for holidays beyond the country's borders. The demand for holidays abroad, to destinations including the Cape Verde, Tunisia, Morocco and Mexico, rose by 15% in the first quarter of 2025.

Travel agencies have said: "We have packages starting from 400 euros". In the Algarve, for that amount, you might be able to rent a sunbed with a (side) view of the sea for two days, but without a cushion.

In March, data from the Algarve Hotels and Tourist Enterprises Association (AHETA) showed that room occupancy rates were 51.9% - a 3.4% drop compared to the same period last year.

In 2024, the Algarve experienced record-breaking tourism figures, with over 5.2 million guests. This included both domestic and international tourists, with international visitors reaching an impressive 3.8 million, also a new high.

Faro Airport, the main gateway to the Algarve, handled a record 9.8 million passengers, a 2% increase compared to 2023.

However, with prices as they are currently, in Portugal, it may be more common to hear that locals are going to Punta Cana in the Dominican Republic rather than spending a week at a hotel in Armação de Pêra.