Global Tourism Research Series: Portugal, Europe's Backyard

Mild winters, hot summers, and a diverse array of coastal and mountain destinations make Portugal an ideal holiday destination in Europe, so much so that in 2022 the country was listed as one of the best self-drive destinations in Europe for reasons including weather, safety, affordability, and landmarks.

Portugal is surrounded by the Atlantic Ocean to the west and south, and borders Spain to the north and east. For statistical purposes, the country of 10 million people is officially divided into seven regions: five continental regions and two island regions (the Azores and Madeira). Lisbon, Portugal's smallest continental region and home to the country's eponymous capital, is Portugal's most popular destination for international tourists in 2021 by a wide margin. However, visitors to other parts of Portugal tend to stay longer at their destinations.

Number of international tourist arrivals in Portugal in 2021, by country of residence (in thousands) Data source: Statista.com

The role of tourism in the Portuguese economy

Before the pandemic, tourism accounted for nearly a fifth of Portugal's economy. However, the global crisis caused the contribution of tourism to GDP to fall by more than half in 2020. Despite the setback, Portugal remained among the top three most tourism-dependent countries in the European Union in 2020 and 2021. For the year, Portugal's tourism balance of payments (showing the difference between inflows and outflows of international tourism) was close to 6.4 billion euros, compared with nearly 5 billion euros recorded in the first year of the pandemic.