Madeira Challenges Algarve's Summer Crown: Who Truly Dominates Portugal's Tourism?

Algarve's Summer Dominance

There's no surprise when the Portuguese destination chosen for summer holidays is the Algarve. In fact, it's a tradition, even with prices driving away some Portuguese citizens. Data released by the Portuguese Hotel Association (AHP), covering the four summer months, shows that the Algarve region continues to be the "champion" across the board, but it must be cautious.

Between June and September, the southernmost region of mainland Portugal grew in all segments and performed above the national average: occupancy rate, average price, RevPAR (Revenue per Available Room), and average stay. Indeed, except for June when schools are still open, the Algarve was "the star region" of the hotel industry.

At the start of summer, Algarve occupancy stood at 84%, with the average price fixed at 169 euros. In the following month, with temperatures inviting a dip in the sea, the occupancy rate rose and the average price soared to 222 euros, staying 37.9% above the national average. In August, it surpassed itself again, with the hotel industry recording an average price of 256 euros, 30.6% above the 169 euros national average, while RevPAR was at 238 euros and the occupancy rate at 93%, the highest in the entire territory.

With September already included in the summer balance, occupancy positioned at 87%, only surpassed by Madeira, while the average price remained at 256 euros, above last year's 250 euros, and revenue per available room settled at 238 euros.

"The Algarve is clearly the champion region in August, whether in terms of occupancy, average price, or RevPAR. It managed to pull up the national average," said Cristina Siza Vieira, vice-president of AHP, when presenting the data.

Strong Competition for the Traditional Algarve

Despite the Algarve continuing to shine, the head of the hotel association admits that another region stood out in the summer, even starting to nip at the heels of the Algarve beaches.

Throughout the four months, the Autonomous Region of Madeira threatened to dethrone the Algarve, managing to take the crown in three months. In June, Madeira achieved an occupancy rate of 90%, surpassing the 84% in the south, with its revenue per available room just two euros short of the Algarve (140 euros).

The same happened in July, with occupancy in Madeira rising to 91%. Although the average price rose to 183 euros, the value fell short of the competing region.

In terms of total profits, 97% of respondents in Madeira, as part of this balance, considered their performance in June superior to the same period last year, pushing the Algarve to second place.

In August, despite some distance between the two, the Algarve and Madeira were the only regions to exceed the national average. The occupancy rate of this Autonomous Region rose to 91%, but the average price remained at 192 euros and RevPAR was at 175 euros, well below the Algarve's 238 euros. However, the region led by Miguel Albuquerque recorded an improvement in total profits at the peak of summer.

With the return to school, Madeira once again stole the crown from the "champion" by assuming an occupancy rate of 92% in September, against the 87% recorded in the Algarve. Although it remained above the national average in average price and RevPAR, Madeira could not compete with the most expensive Portuguese region. Even so, total profits grew compared to 2024.

In the aggregate of these four summer months, AHP shows that the two divided the honors. The Algarve conquered a higher average price, in the order of 206 euros, while Madeira took the occupancy award, with a rate of 91%.