Portugal has spent years building one of Europe’s most successful tourism economies.
Its beaches, historic cities, mild climate, food, wine and relatively accessible prices have transformed the country into a major destination for travelers from across Europe and beyond.
But new data reveal an intriguing shift in the tourism economy.
Foreign visitors are still spending heavily in Portugal—but the average value of each transaction is falling.
In the first half of 2026, the average foreign-card transaction in Portugal was about €35.70, the lowest level since 2019. At the same time, the number of purchases made using foreign cards increased by 6%, pushing total spending beyond €3.7 billion.
That combination tells a more complicated story than simply saying tourism is growing or declining.
Portugal is attracting plenty of visitors.
They are still spending billions.
But individual purchases are becoming smaller.
And that raises an important question for Portugal’s tourism industry:
Is the country moving toward a tourism model based on more visitors spending less—or can it attract travelers who stay longer and spend more locally?
Britain Remains Portugal’s Biggest Tourism Market
British tourists continue to occupy an especially important position in Portugal’s tourism economy.
In the first six months of 2026, British visitors made around 16 million electronic transactions, representing approximately €518 million in spending.
The importance of the UK market isn’t a temporary phenomenon.
According to Turismo de Portugal, Britain was Portugal’s leading international source market in 2025, accounting for 17.7% of overnight stays by non-residents and about 2.4 million guests. British visitors generated roughly 10 million overnight stays and €4.28 billion in tourism receipts during the year.
That makes Britain an unusually valuable tourism relationship for Portugal.
It is not simply a question of visitor numbers.
British travelers are deeply embedded in Portugal’s tourism economy, particularly in the Algarve.
In 2025, the Algarve accounted for 57% of British overnight stays in Portugal, followed by Madeira at 18.8% and Lisbon at 12.7%.
For Portuguese hotels, restaurants, retailers, tour operators and other tourism businesses, British consumers therefore remain extremely important.
But More Transactions Don’t Mean Bigger Transactions
This is the central paradox in the latest figures.
Foreign visitors made 6% more purchases during the first half of 2026.
Yet the average transaction fell to €35.70.
In other words, tourists are buying more frequently but spending less each time.
That can happen for several reasons.
Travelers may be making more small purchases—coffee, snacks, groceries, public transport, inexpensive souvenirs or casual meals—instead of fewer large purchases.
They may also be becoming more price-conscious.
And that could reflect a broader change in international travel behavior.
After several years of elevated travel demand and rising prices, tourists may still want to travel but are increasingly looking for ways to control the cost of their trips.
The result is a tourism economy that can look extremely healthy from a headline perspective while individual businesses may feel pressure on margins.
Where Are Tourists Spending Their Money?
Retail was the largest category of foreign-card spending in Portugal during the first half of 2026.
It accounted for approximately €1.4 billion.
Restaurants generated more than €1 billion, while accommodation establishments recorded around €735 million in electronic payments.
That breakdown is significant.
It shows that tourism spending extends far beyond hotels.
A tourist arriving in Portugal contributes to the economy through an entire chain of businesses:
hotel → restaurant → supermarket → café → shop → transport provider → attraction → tour operator.
This is why tourism has such a powerful economic multiplier.
But it also explains why the quality of tourist spending matters.
A traveler who stays in an all-inclusive resort and rarely leaves the property can generate significant accommodation revenue while contributing less to independent restaurants, local shops and cultural businesses.
A traveler who spends money across the destination distributes the economic benefits more widely.
Lisbon and the Algarve Dominate
Portugal’s tourism success also has a geographic problem.
More than half of foreign expenditure remains concentrated in two areas:
- Greater Lisbon: 35.7%
- Algarve: 21.6%
Northern Portugal accounted for only 1.9% of tourist purchases in the figures cited by Euronews.
That concentration creates both opportunities and headaches.
Lisbon benefits from its status as a major European city break destination.
The Algarve benefits from beaches, golf, resorts, sunshine and its enormous British tourism base.
But heavy concentration can produce familiar problems associated with mass tourism:
- congestion
- pressure on housing
- rising rents
- overcrowded attractions
- seasonal employment
- infrastructure stress
- environmental pressure
- increased costs for local residents
Meanwhile, areas receiving relatively few tourists can struggle to capture the economic benefits of Portugal’s tourism boom.
Northern Portugal Is the Missing Piece
The tiny share of foreign-card purchases attributed to Northern Portugal in the latest figures highlights a broader issue.
Portugal is not just Lisbon and the Algarve.
The north offers Porto, the Douro Valley, historic towns, wine tourism, Atlantic beaches, mountains, rural communities and an enormous cultural heritage.
Porto has already become an international tourism success story.
But the challenge is spreading visitors and spending beyond the country’s best-known destinations.
This matters because tourism policy is increasingly shifting from:
“How do we attract more tourists?”
toward:
“How do we distribute tourism more effectively?”
Getting another million visitors is not necessarily better if they all arrive at the same places during the same months.
Portugal Is Still Growing Overall
It would be a mistake to interpret falling average transaction values as evidence that Portugal’s tourism industry is collapsing.
The broader numbers tell a different story.
In 2025, Portugal’s tourist accommodation sector recorded approximately 32.5 million guests and 82 million overnight stays.
Total tourism revenue reached about €7.13 billion, an increase of 6.9%, while international markets accounted for 69.5% of overnight stays.
Official Portuguese tourism data also showed around 19.7 million foreign guests in 2025, up 1.9% from 2024.
So the country is not experiencing a straightforward tourism downturn.
Instead, Portugal appears to be experiencing a more nuanced transition:
visitor numbers remain strong, total revenue remains strong, but spending behavior is changing.
2026 Has Continued the Growth Story
The first months of 2026 also point toward continued tourism demand.
According to Turismo de Portugal’s June 2026 outlook, January through May recorded about 12 million guests and 28.7 million overnight stays.
The UK remained the largest source market, accounting for 12.8% of overnight stays during that period, followed by the United States at 11.6% and Spain at 10.7%.
Tourism revenue from January through May reached €10.3 billion, up 4.5% year on year.
Britain accounted for 14.3% of those revenues, followed by Germany, the United States, Spain and France.
That reinforces the central point:
Portugal is not running out of tourists.
The challenge is extracting sustainable economic value from the tourists who are already arriving.
Why British Tourists Matter So Much
British travelers have a particularly long-standing relationship with Portugal.
The connection is especially strong in the Algarve, where British tourists have helped shape the region’s international tourism economy for decades.
British visitors also benefit from extensive air connectivity.
In 2025, airlines carrying British tourists included Ryanair, easyJet, Jet2.com, TAP Air Portugal and British Airways, among others.
Frequent flights make Portugal accessible for both long holidays and shorter breaks.
That accessibility can encourage repeat visits.
A British traveler may visit the Algarve for a week-long summer holiday one year, return for a winter escape the next, and eventually become a regular visitor.
From Portugal’s perspective, repeat visitors are particularly valuable because they often require less destination marketing.
The traveler already knows where to stay, where to eat and what to do.
The American Tourist Is Different
The latest spending data also reveal an interesting contrast between British and American travelers.
British visitors made far more transactions in Portugal.
But American tourists were among the groups with the highest average transaction value, at around €45 per transaction in the data cited by Euronews.
That distinction matters.
There is a huge difference between:
high volume × moderate spending
and
lower volume × high spending.
A tourism destination needs both.
British visitors provide enormous volume and consistent demand.
American visitors can provide higher-value spending.
This helps explain why Portugal has increasingly attracted travelers from the United States.
The Rise of the High-Spending American Traveler
The broader European tourism market has seen strong growth in American travel.
American visitors often stay relatively long, travel across multiple countries and spend heavily on hotels, restaurants, experiences and transportation.
Portugal benefits from that trend because it can serve as both a primary destination and part of a wider European itinerary.
An American traveler might combine:
Lisbon + Porto + the Algarve
or:
Portugal + Spain
or:
Portugal + France + Italy.
That makes Portugal particularly attractive to long-haul visitors.
But the country needs to ensure that these visitors don’t simply pass through Lisbon before moving elsewhere.
Why Average Spending Could Be Falling
Several factors could explain the decline in average transaction size.
1. Cost-of-living pressure
Travelers are still traveling, but many are watching their budgets more closely.
Higher accommodation prices, airfares and restaurant costs can force visitors to economize elsewhere.
2. More low-value transactions
Digital payments make it easier to record small purchases.
A tourist who previously made one €60 cash purchase may now make three separate €20 card transactions.
That changes the average without necessarily changing total spending dramatically.
3. Longer stays with more everyday spending
A traveler staying for two weeks may make many small purchases instead of a handful of large tourist expenditures.
4. Greater use of supermarkets and self-catering
Travelers increasingly mix restaurant meals with supermarket shopping and apartment cooking.
That can reduce the average restaurant bill.
5. Changing traveler demographics
Not every visitor is a luxury traveler.
Portugal attracts backpackers, families, retirees, digital workers, city-break travelers and budget-conscious tourists.
The average therefore conceals enormous differences between individual travelers.
The Average Tourist Doesn’t Really Exist
This is an important statistical point.
A €35.70 average transaction does not mean a typical tourist spends €35.70 on a meal or €35.70 per day.
It is the average value of a transaction made using foreign cards.
That is a completely different measurement.
A traveler might spend:
- €8 on breakfast
- €15 on lunch
- €5 on coffee
- €30 on dinner
- €100 on shopping
Each transaction enters the dataset separately.
The average transaction therefore measures payment behavior, not total holiday spending per visitor.
That distinction is crucial when interpreting the figures.
Cash Still Matters
Another limitation is that card-payment data do not capture every euro spent by tourists.
Portugal has become highly card-friendly, but cash still exists.
Some smaller businesses may have different payment patterns, and visitors may use cards issued through different payment systems.
The SIBS data provide an important real-time indicator of spending behavior, but they should not be interpreted as a complete accounting of all tourist expenditure.
This is why accommodation statistics, tourism receipts, hotel data and card transactions should be viewed together.
Each measures a different part of the tourism economy.
Tourism Revenue Is Still Rising
Perhaps the most encouraging point for Portugal is that total tourism revenue has continued to grow even as average transaction values fall.
That suggests the country may be benefiting from volume growth and higher overall activity.
In 2025, tourism revenue rose 5%, while the number of guests increased 3% and overnight stays rose 2.2%, according to Turismo de Portugal.
The industry therefore isn’t necessarily facing a spending crisis.
It may instead be entering a new phase of maturity.
Early tourism growth is often about attracting more visitors.
Mature tourism economies increasingly focus on:
yield, quality, seasonality and distribution.
The Next Goal: More Value, Not Just More Visitors
Portugal’s tourism strategy may need to evolve accordingly.
Instead of measuring success primarily through visitor numbers, policymakers and businesses can increasingly focus on:
- average length of stay
- spending per visitor
- spending outside major cities
- local business participation
- repeat visitation
- off-season tourism
- cultural tourism
- nature tourism
- rural tourism
- premium experiences
The objective is simple:
Get more economic value from every visitor without necessarily increasing the number of visitors.
That is a much more sustainable proposition.
Can Portugal Escape Overtourism?
This is becoming one of Europe’s biggest tourism questions.
Portugal is still attractive partly because it offers good weather, culture and relatively accessible prices compared with some other Western European destinations.
But success creates its own problems.
Lisbon and the Algarve can become expensive and crowded.
Housing markets can feel the pressure of short-term rentals.
Local residents can become frustrated when tourism dominates neighborhoods.
Infrastructure must accommodate seasonal population spikes.
And environmental pressure increases in coastal areas.
The answer isn’t necessarily fewer tourists.
It may be better tourism.
Spread Tourists Beyond Lisbon and the Algarve
Portugal has an obvious opportunity.
If more visitors could be encouraged to spend time in the north, the center, the Alentejo and less-visited inland areas, the country could increase tourism revenue without concentrating even more pressure on Lisbon and the Algarve.
This could also help smaller communities.
Rural hotels, wineries, restaurants, craft businesses and cultural attractions could benefit from international visitors.
The tourism industry would become less geographically concentrated.
And travelers would discover a more complete version of Portugal.
The Opportunity in Food Tourism
Food could be one of the easiest ways to increase tourist spending locally.
Portugal has a powerful culinary identity:
- seafood
- grilled fish
- regional cheeses
- cured meats
- pastries
- olive oil
- wine
- port
- craft beer
- traditional sweets
Food tourism also distributes spending across smaller businesses.
A visitor can spend money at a local bakery, market, restaurant, winery and food producer rather than concentrating the entire budget in a multinational hotel.
That makes gastronomy a strategic tourism asset.
Wine Tourism Could Do the Same
Portugal’s wine regions provide another opportunity to increase both visitor spending and geographic distribution.
The Douro Valley is already internationally famous.
But Portugal also has wine-producing areas across the country, including Alentejo, Dão, Bairrada, Vinho Verde and the Setúbal Peninsula.
Wine tourism encourages visitors to travel beyond the major urban destinations.
It also tends to involve higher-value experiences such as tastings, tours, meals and accommodation.
That makes it particularly useful for a tourism strategy focused on value rather than sheer volume.
Why Longer Stays Matter
One of the easiest ways to increase tourism revenue without dramatically increasing visitor numbers is to convince tourists to stay longer.
A three-day city break produces less economic activity than a 10-day trip.
A week-long Algarve holiday combined with several nights in Lisbon or Porto spreads spending across multiple regions.
A two-week itinerary through Portugal can benefit hotels, restaurants, attractions, transport companies and local retailers.
This is why destination marketing should increasingly promote routes, not just individual cities.
Instead of selling:
“Visit Lisbon.”
Portugal can sell:
“Spend two weeks discovering Portugal.”
That’s a much more valuable tourism proposition.
British Travelers Could Be Part of the Solution
Britons already have a strong relationship with Portugal.
The challenge is encouraging repeat visitors to explore beyond the familiar.
A British tourist who normally spends seven nights in an Algarve resort might be encouraged to add:
- two nights in Lisbon
- a wine trip in the Alentejo
- a food experience in Porto
- a rural stay in the north
That doesn’t necessarily require attracting a new tourist.
It simply means extracting more value from an existing one.
Portugal’s Tourism Economy Is Entering a New Phase
The latest spending figures should therefore not be interpreted as a warning that tourists are abandoning Portugal.
The opposite is closer to reality.
Portugal continues to attract millions of visitors.
International tourism remains dominant.
British travelers remain the country’s most important foreign market.
Tourism revenue continues to grow.
But the spending data show that the nature of tourism is changing.
Visitors are making more transactions while spending less per transaction.
That could reflect budget pressure.
It could reflect changing payment habits.
It could reflect the growing diversity of Portugal’s tourist population.
Or it could be a combination of all three.
The Real Challenge Is Quality
Portugal has already won the first battle.
It has convinced the world to visit.
Now it faces the harder question:
How can tourism remain economically valuable without becoming socially and environmentally overwhelming?
The answer is unlikely to be simply more tourists.
Portugal may instead need:
more spending per visitor,
longer stays,
more off-season travel,
more regional distribution,
more local businesses benefiting,
and more experiences beyond the traditional tourist hotspots.
That is a fundamentally different tourism strategy.
Britain Will Remain Central
For all the changes taking place in global tourism, one thing seems unlikely to change soon.
British travelers will remain extremely important to Portugal.
They are numerous.
They return regularly.
They have strong connections to the Algarve and other Portuguese destinations.
And they generate enormous amounts of spending.
But the latest data also show why visitor numbers alone can be misleading.
British tourists made millions of purchases and generated hundreds of millions of euros in electronic spending during the first half of 2026.
The challenge is ensuring that this spending creates broad economic value rather than simply reinforcing the same crowded destinations.
Portugal’s Tourism Paradox
Portugal now faces a rather enviable problem.
It has too much demand in some places and not enough economic distribution in others.
It has huge visitor numbers but falling average transaction values.
It has a globally successful tourism brand but growing concerns about affordability and overtourism.
It attracts both mass-market European travelers and increasingly affluent long-haul visitors.
And it has extraordinary potential beyond the destinations tourists already know.
The smartest response is not to chase ever-higher visitor numbers.
It is to make every visitor count for more.
The Bottom Line
Portugal’s tourism industry isn’t shrinking.
It is evolving.
British travelers remain the country’s biggest foreign tourism market, while American visitors demonstrate the potential of higher-spending long-haul tourism. Overall foreign-card purchases increased 6% in the first half of 2026, surpassing €3.7 billion, even though the average transaction fell to €35.70.
That apparent contradiction is actually the story.
Portugal has plenty of tourists. What it needs now is more value from tourism.
The next chapter of Portuguese tourism may therefore be less about filling hotel rooms and more about convincing visitors to stay longer, explore further, eat locally, discover smaller communities and spend their money across a wider part of the country.
Because the future of tourism isn’t necessarily:
more tourists.
It may be:
better tourists, better distribution and better value.
And for Portugal, that could be the difference between simply having a tourism boom—and building a tourism economy that remains successful for decades.
Sources Euro News
