What the numbers actually show
Statistics Portugal (INE) released its annual tourism figures this month, and the pattern is a familiar one for anyone tracking household finances here: Portuguese residents are doing more with less. They took more trips in 2025 than ever before, but each one cost noticeably less than it would have the year before.
The average expenditure per trip settled at €265.10, a 4.2% decrease compared to 2024. That’s not a small correction — it reverses a period of rising travel costs and suggests households are actively trimming discretionary spending even as they keep travelling.
The volume side of the story looks upbeat at first glance. Portuguese residents took 26 million tourist trips in 2025, a 13.7% increase compared to the previous year, split between domestic trips, up 14% to 22.2 million, and trips abroad, up 12.5% to 3.9 million. Overnight stays followed the same domestic-first pattern: overnight stays by residents within the country rose 3.5% to 29.5 million, compared with modest 0.6% growth in overnight stays by foreign visitors, which totalled 60.2 million.
Put those two trends side by side and the picture is clear: people are travelling more often, closer to home, and spending less each time. For trips within the country, average expenditure per person fell 2.9% to €171.60, while the drop was even sharper for trips abroad, with average spending falling 4.8% to €803.20.
Why this matters beyond the tourism sector
INE’s own reading of the data is telling. Although Portuguese families are not foregoing leisure, vacations, and rest, they are resorting to stricter saving strategies to accommodate travel costs within their household budgets. That’s a euphemism for a squeeze most foreign residents in Portugal will recognise instantly: shorter stays, cheaper accommodation, fewer restaurant meals, more staying with family instead of booking hotels.
For expats, this isn’t just a curious data point about Portuguese holiday habits — it’s a signal about the broader cost environment they’re living in too. If domestic households, many with two incomes and long-established local networks, are cutting travel spend by mid-single digits, it says something about how tight budgets have become across the board — on groceries, rent, utilities and services, not just weekend getaways.
The timing lines up with what’s been happening to prices generally. After a relatively calm 2025, headline inflation picked back up sharply in early 2026. Portugal’s economy faced a series of unexpected shocks at the beginning of 2026, starting with severe storms in January and February, followed by a steep surge in energy prices in March and April. The European Commission now expects headline inflation to reach 3.0% in 2026 before decreasing to 2.3% in 2027. That’s a meaningfully faster pace than the 2.3% average recorded in 2025, and it’s landing at the same time wages, rents and everyday costs are already stretched for newcomers still adjusting to Portuguese price levels.
The practical read for foreign residents
None of this means Portugal has become unaffordable overnight, but it’s a useful reality check for anyone budgeting a move or planning their first year here. Foreign residents often assume that because Portugal remains cheaper than the UK, Germany or the US on paper, day-to-day costs will stay comfortably manageable. The travel data suggests the margin locals are working with has narrowed — and if Portuguese households with local salaries, no relocation costs and established support networks are cutting back, expats living on fixed foreign pensions, remote salaries, or D7/D8 income thresholds should build more slack into their own budgets, not less.
Practically, that means treating the minimum income figures used for D7 and D8 visa applications as a floor, not a comfortable target, and revisiting recurring costs — insurance, subscriptions, dining out — the same way Portuguese families evidently are. Anyone assessing whether their finances still stack up for D7, D8 or a permanent move should look at our visas hub for the current income and savings thresholds, since these get reassessed periodically and haven’t moved in step with 2026’s inflation uptick.
What to watch next
Keep an eye on INE’s quarterly consumer price releases and the Bank of Portugal’s household consumption surveys over the coming months — both will show whether this spending caution is a temporary reaction to the early-2026 energy shock or a longer-term shift in how Portuguese households, and by extension the broader cost environment foreigners are budgeting against, manage discretionary spending. If the pattern holds through the second half of the year, it will likely show up in slower growth for restaurants, retail and domestic tourism operators — sectors that also matter to expats running small businesses or freelancing on recibos verdes in exactly those industries.
For now, the message is straightforward: Portugal isn’t in crisis, but the room for error in a household budget here has gotten smaller. Expats planning their finances around 2024-era cost assumptions should update them.
Sources
This article was produced with AI assistance and editorial oversight in line with our editorial policy. It is general information, not legal or tax advice.