Portugal Source-Market Diversification Index: Top Three Markets at a Record-Low 38.5% of Foreign Nights

How the index is built

The core data is Eurostat's table tour_occ_ninraw: nights spent in hotels, holiday and short-stay accommodation and campsites in Portugal, by the guest's country of residence, for every year from 2005 to 2025. We extracted it on 21 October 2026. Foreign nights are all nights minus those of Portuguese residents: 51,592,254 in 2019 and 60,022,455 in 2025. These are the same counts INE uses in its annual Estatísticas do Turismo, which is why our top-three shares for 2023, 2024 and 2025 match INE's published 40.3%, 39.4% and 38.5% to one decimal.

For each year we computed four measures. The top-one, top-three, top-five and top-ten shares say how much of demand the leading markets hold. The Herfindahl-Hirschman index (HHI) adds up the squared percentage share of every named country, so it is 10,000 if a single market supplies everything and falls toward zero as demand spreads out. The effective number of markets, 10,000 divided by the HHI, translates that into the number of equal-sized markets that would produce the same concentration. Eurostat names 41 countries for Portugal and groups the rest into residual blocks such as "other Asia". Those blocks, 5.5% of foreign nights in 2025, stay in the denominator but out of the index; counting each one as a single market would add between 1 and 9 points.

Two INE series sit behind most press coverage, and they rank the markets differently. The annual series, released each July, covers all tourist accommodation including campsites; Spain is third. The monthly flash series, which feeds the February headlines, leaves campsites out; there the United States is third, with 9.6% of non-resident nights in 2025 against Spain's 9.1%, and the top three hold 38.6%. Campsites add about 480,000 Spanish nights and almost no American ones. Our earlier article on whether the US has overtaken Spain sets out the nine measures on which that race can be called.

What INE said, and what our title got wrong

INE has made the same statement in three consecutive annual releases. In July 2024 it reported that the three main foreign markets held 40.3% of non-resident nights in 2023, "the lowest since 2013" and 7.5 points below that year. In July 2025 the figure was 39.4%, 8.4 points below 2013. On 9 July 2026, as reproduced by ECO, INE wrote that the three main markets "concentraram 38,5% das dormidas de não residentes, o valor mais baixo desde 2013", reflecting "uma maior diversificação da procura turística".

Read quickly, "the lowest since 2013" suggests 2013 was lower still. It was not. Both of INE's point changes imply a 2013 share of 47.8%, and Eurostat gives 47.79% for the same year. INE's annual series by country of residence across all accommodation starts in 2013, so "since 2013" means "since records began". Our plan compressed that into "a 2013 low", which inverts it. The accurate statement is that 2025's 38.5% is a record low, 9.3 points below the series' first year.

Eurostat lets us go further back than INE's annual release does. On the all-accommodation series the top three held 57.9% in 2005. On the hotels-only series, which runs from 1990 with a gap for 1991 to 1994, the top three peaked at 61.4% in 1996 and stood at 40.0% in 2025, its own lowest value. In hotels alone the third market in 2025 was the United States, with 4.64 million nights against Spain's 4.14 million.

Twenty years in two steps

The index fell in two distinct periods with a long plateau between them. From 2005 to 2010 the HHI dropped from 1,437 to 1,097. That first fall was driven by the British market shrinking in absolute terms: UK nights fell from 7.59 million to 5.72 million, and the UK share of foreign nights from 29.9% to 22.5%. It was diversification by loss, and the UK market article traces its recovery to a 2024 peak of 10.55 million nights.

From 2010 to 2016 foreign nights grew from 25.4 million to 44.0 million and the index barely moved, between 1,046 and 1,097. Every market grew at roughly the same pace. France rose to third place from 2015 to 2017 and briefly held 11.5% of foreign nights in 2016, but the top three stayed between 47.6% and 50.6% throughout. 2013 sits in the middle of this plateau, with an HHI of 1,056.

The second fall began in 2016 and has a different cause. Between 2016 and 2019 the HHI dropped from 1,051 to 864 as the United States, Brazil and Asian markets grew faster than the European core: the American share rose from 2.5% in 2013 to 5.3% in 2019, Brazil's from 3.9% to 5.8% and Asia's from 2.1% to 4.2%. The pandemic interrupted it. In 2020 long-haul travel collapsed, Europeans who could drive or fly short distances kept coming, and the index jumped back to 974. Since 2022 it has set a new low every year: 872, 825, 802 and 775. The effective number of markets has nearly doubled since 2005, from 7.0 to 12.9.

Who gained share and who lost it

The five markets that built Portuguese tourism, the UK, Germany, Spain, France and the Netherlands, held 70.9% of foreign nights in 2005, 66.8% in 2010, 57.3% in 2019 and 51.3% in 2025. Between 2019 and 2025 they lost 6.0 points of share while still adding 1.25 million nights, a rise of 4.2%. Germany added 758,000 nights, the UK 683,000 and the Netherlands about 258,000. France lost 406,000 and Spain 47,000.

North America took most of the share the core gave up. The United States went from 2.3% of foreign nights in 2010 to 5.3% in 2019 and 9.1% in 2025, the largest gain of any market in both periods. Canada went from 0.9% to 1.9% and then 3.1%. Together they added 3.61 million nights between 2019 and 2025, 42.8% of all foreign growth; the US alone added 2.76 million, which is more than Britain, Germany, Spain, France and the Netherlands combined. Our American market article shows that this was a volume story: spending per American night rose only about 4% in real terms over the period.

The rest of the gain was spread thinly. Other European markets, led by Ireland, Italy, Poland, Switzerland and the Czech Republic, added 2.94 million nights and 1.8 points of share. Asia added 0.53 million nights but only 0.3 points, because China is still below its 2019 level. Brazil went the other way: its registered nights fell 18.7% and its share from 5.8% to 4.1%, even as INE's count of Brazilian tourists rose 12%. Before 2019 Brazil was one of the diversifiers. Since then its growth has moved into private lodging and residence.

It depends what you count

Concentration is a property of the measure as much as of the market. Spain is the clearest case. INE estimates that 7.12 million Spanish residents visited Portugal in 2025, 23.8% of all non-resident tourists, yet they accounted for 9.4% of foreign nights and about 10% of travel receipts, because most Spanish trips are short and many are by road. On headcount the top three, Spain, the UK and France, held 46.6% in 2025, down from 53.5% in 2019. A partial HHI for 2023 headcount, using the eleven countries INE lists, comes to about 1,125, far above the nights index.

Money is the least concentrated measure and the one that has fallen fastest. Banco de Portugal's travel credits, as reported to Eurostat, give the top three markets 50.3% of receipts in 2010, 42.7% in 2019 and 37.2% in 2025 on provisional data. The receipts HHI over 21 named partners fell from 1,040 to 770. France was the largest single source of receipts in 2012 and 2013 and again in the pandemic years, the UK in every other year. In 2025 Germany passed France for second place for the first time since 1996, with €3,367 million against €3,243 million on Banco de Portugal's current vintage. The United States earned Portugal €3,143 million, 10.8% of receipts, against 3.9% in 2010.

Air traffic is the most stable measure because it counts residents of Portugal flying out and diaspora travel in both directions. On Eurostat's partner-country data the UK, France and Spain carried 44.5% of international passengers at Portuguese airports in 2019 and 42.1% in 2025. France and Switzerland rank far higher on air passengers than on hotel nights, which is what a large Portuguese community abroad looks like in the statistics.

The least concentrated in southern Europe

We ran the same calculation for five competitors. In 2025 Spain's foreign demand had an HHI of 1,103, with the UK alone supplying 25.3% of foreign nights and the top three, the UK, Germany and France, 50.3%. Croatia stood at 966, up from 919 in 2019 as Germany's share rose to 24.6%. Italy fell to 831. France rose to 816 and Greece, whose 2025 data Eurostat had not yet published, to 800 in 2024. Portugal, at 775, is the lowest, and only Portugal, Spain and Italy became less concentrated after 2019.

That ranking is new. In 2019 Portugal's index of 864 was third-lowest of the six, behind Greece and France, and its top-three share of 42.1% was second-highest after Spain. Measured by top-three share, Portugal's fall since 2019, 3.6 points, is the largest of the group. Two caveats apply. Italy and France report about 9% of foreign nights in residual groups, which lowers their HHI mechanically, and Croatia's domestic series shows a break after 2019 that does not affect foreign shares but should be noted by anyone using its totals.

Regions: the Algarve is still a British market

National diversification hides very different regional pictures. INE's 2025 annual release gives the share of each region's non-resident nights held by its largest market and, for some regions, its top three. The Algarve is the most concentrated on both measures: the UK supplied 34.4% of its non-resident nights and the top three 56.8%. Madeira follows, with Germany at 23.8% and a top three of 54.9%. Grande Lisboa is the least concentrated, with the United States as its largest market at 16.6% and a top three of 32.2%.

The most quoted Algarve figure measures something else. In 2025, 57.3% of all British nights in Portugal were spent in the Algarve, down from 63.4% in 2019. That is the UK market's dependence on the region. The region's dependence on the UK is the 34.4%, which has fallen from 37.3% in 2019. Our Algarve statistics article covers what that means for the region's airport and winter season. Every region with a published top-three share became less concentrated between 2024 and 2025: the Algarve by 0.6 points, Madeira by 1.1, Grande Lisboa by 0.5 and the Setúbal peninsula by 2.6.

Spain leads five regions, the Centro, Oeste e Vale do Tejo, the Norte, the Alentejo and the Setúbal peninsula. Its 24.1% of the Centro's foreign nights makes that region more concentrated on the top-one measure than Madeira. In the Azores the two statistical offices disagree on the leader. INE's preliminary figures put the United States first with 17.0%; SREA, the regional statistics service, counts 524,365 German nights against 490,115 American ones, which makes Germany first with 16.3%.

Seasons: winter is Portugal's most diversified time of year

Concentration also moves through the year, and in the opposite direction to what the seasonality debate might suggest. On INE's monthly series the top three markets held 33.7% of non-resident nights in January 2026 and 35.0% in February, then 42.0% in May and 43.2% in June. The UK is the largest market in every month we found, but its share runs from about 14% in winter to 20.8% in June 2026. In November 2025 Britain and Germany were almost level, at 13.8% and 13.0%.

Each summer market has its own peak. The United States reaches about 11% of non-resident nights in May, June and September. Spain jumps to 15.6% in August, France to about 10%. The top ten markets held 70.0% of non-resident nights in November 2025 and 79.2% in August 2026. Winter demand comes from a longer list of countries, many of them in central and northern Europe, which is one reason Portugal's seasonality rate fell to 36.4% in 2025, the lowest INE reports since 2013.

2026: the trend has paused

The decline in concentration depended on foreign demand growing, and in 2026 it barely did. Eurostat's monthly data show foreign nights up 0.35% between January and August. In the first half of the year the UK, Germany and the United States held 4.67 million, 3.09 million and 2.60 million of 25.97 million non-resident nights on INE's monthly series, a combined 39.9% against 39.3% in the first half of 2025. Germany grew 3.6% and the US 5.4%, while France fell in every published month and Brazil weakened from July.

Over January to August the top three held about 38.4% against about 37.9% a year earlier. Both are approximations built from rounded monthly totals, and Spain may rank third or fourth over the period, but neither reading supports further diversification this year. The American market, the main source of the change since 2019, fell 3.1% in July 2026 before recovering 5.8% in August.

The industry has noticed the British slowdown more than the overall picture. In a survey of 403 establishments published on 20 October 2026, the hotel association AHP found 49% of hoteliers named the UK among their three main summer markets, down from 55%, while Spain rose to 44%. That is a count of mentions, not a market share. The confederation CTP's president, Francisco Calheiros, said in March that the British market "tem estado a arrefecer" and called for new markets in Latin America, North America and Asia.

Diversified toward what?

A lower HHI means no single market can sink a season. It does not mean the risks are spread evenly. North America now supplies 12.2% of foreign nights, against 3.4% in 2005, and those nights share one route type, one gateway and largely one currency. The euro rose from $1.08 in 2024 to $1.13 in 2025 and $1.18 in February 2026. Almost half of American nights, 48.9%, are spent in Grande Lisboa, which is why the US is that region's largest market.

Most of that traffic arrives through Humberto Delgado, where passenger growth has outrun the number of flights the runway can handle, as our Lisbon airport capacity analysis shows. The transatlantic network also depends on TAP, for which Lufthansa was chosen on 14 October 2026 to buy a 44.9% stake; our TAP privatisation explainer covers what the new owner could change on North American and Brazilian routes. A market mix that relies on long-haul seats into one constrained airport is diversified by country and concentrated by infrastructure.

Portugal has no official target for any of this. The Estratégia Turismo 2027 sets goals for 80 million nights, €26 billion of receipts and the lowest seasonality rate on record, but none for the mix of markets. Turismo de Portugal's 2025 activity plan includes an objective to improve the value of the market mix and a target to reach 20 markets with marketing actions. The Estratégia 2035, presented in December 2025, is framed around value added, with a projected €53 billion of receipts by 2035; we found no quantified diversification measure in any published summary. Turismo de Portugal's president named the UK, France, Spain, the Netherlands, Germany and the US as strategic markets in December 2025 and announced new offices in South Korea, Australia, Mexico and on both US coasts.

Nine claims, tested

The table below sets out the claims we checked. Most of the errors concern the measure rather than the number: a share of nights reported as a share of visitors, a share of a market reported as a share of a region, or a ranking that changes when campsites are counted. One of them is ours.

What this means for travelers, businesses and analysts

Travelers: Portugal's visitor mix is broadest in winter, when no market holds more than about 16% of non-resident nights and the top three about a third. If you want fewer compatriots in the hotel bar, the season matters more than the region: the Algarve is a third British across the year, while Grande Lisboa's largest market supplies only a sixth of its foreign nights. American visitors are at their largest share in May, June and September, and Spanish visitors fill the north and the Alentejo in August. Our Portugal itinerary shows how to combine the regions.

Tourism businesses and investors: The national HHI of 775 is the least concentrated in southern Europe, but regional concentration is what an operator actually carries. An Algarve business with 34% of demand from one country, or a Madeira hotel with a top three above 50%, is exposed to a single currency, aviation tax or border rule in a way a Lisbon hotel is not. The new concentration is infrastructural. A sustained fall in American nights, a cut in TAP's North American network after the sale, or a Lisbon slot freeze would reverse part of the post-2019 diversification quickly. Three thresholds would change our assessment: North America above 15% of foreign nights, the national HHI back above 850, or the Algarve's UK share back above 37%.

Journalists and analysts: Safe to cite: the top three markets held 38.5% of foreign nights in 2025, the lowest in INE's series, down from 47.8% in 2013 and 57.9% in 2005 on Eurostat's data; the HHI fell from 1,437 to 775; the US and Canada supplied 42.8% of foreign growth from 2019 to 2025; the top three held 37.2% of travel receipts in 2025 on provisional data; Portugal's HHI is the lowest of six southern European destinations. Do not repeat that the top-three share is "at a 2013 low", that the Algarve gets 57% of its visitors from Britain, or that Americans have overtaken the French on receipts. The series finding this article adds is that diversification has come almost entirely from growth elsewhere: between 2019 and 2025 no core market except France and Spain lost nights, and the index stopped falling as soon as foreign demand stopped growing.