How to Finance the Construction or Refurbishment of Hotels and Tourism Developments?

Tourism continues to assert itself as one of the most dynamic sectors of the Portuguese economy, representing an important source of wealth creation, employment and investment. The sustained growth of tourist demand, combined with the international recognition of Portugal as a tourism destination of excellence, has driven the development of new projects in tourist accommodation, hotel units, rural tourism developments, aparthotels, resorts and other tourism infrastructure. However, the construction of new tourism developments or the refurbishment and modernisation of existing units requires significant investment, making the identification of the best available financing solutions essential. The good news is that there are currently various support instruments available to finance a substantial part of these investments, reducing the financial burden on promoters and increasing the economic viability of projects. WHY INVEST IN THE CONSTRUCTION OR REFURBISHMENT OF TOURISM DEVELOPMENTS? The evolution of tourist expectations, the need to adapt to new market trends and the growing demand for differentiated experiences make modernising the tourism offering increasingly important. Building new developments or upgrading existing units makes it possible to increase accommodation capacity, improve service quality, enhance property value, increase occupancy rates, boost operating profitability, strengthen the development’s competitiveness, adapt the offering to new market demands, integrate environmental sustainability and digitalisation solutions, and increase the asset's commercial value. WHAT TYPES OF PROJECTS CAN BE FINANCED? The various tourism investment support lines can support projects for the construction of new tourism developments — hotels, rural hotels, aparthotels, resorts, holiday villages, rural tourism developments, agritourisms, country houses, glamping, eco-resorts and other developments eligible under applicable legislation. In terms of refurbishment and modernisation, eligible actions include the complete refurbishment of existing units, the expansion of accommodation capacity, the upgrading of rooms and common areas, the creation of new facilities, the construction of spas and wellness centres, conference and event rooms, dining areas, swimming pools and leisure equipment, as well as spaces for nature tourism and tourist experiences. MAIN SOURCES OF FINANCING AVAILABLE Turismo de Portugal — Linha de Apoio à Qualificação da Oferta. One of the main solutions currently available for financing tourism projects, it aims to support investments in upgrading and repositioning tourism developments, establishments and activities (including expansion); creating tourism developments, establishments and activities in low-density areas that meet current or potential tourist demand and add value to the region; projects integrated into the Programa REVIVE; and entrepreneurship initiatives (creation and development of innovative, particularly tech-based, solutions up to 500 thousand euros of eligible investment, promoted by SMEs to be established or created less than five years ago). In many cases, projects can benefit from a combination of bank financing and a non-repayable component, significantly reducing the financial burden on promoters. Portugal 2030. Depending on the location of the investment and the nature of the project, financing opportunities may exist through different Portugal 2030 programmes, such as the Sistema de Incentivos à Inovação Produtiva and the Sistema de Incentivos de Base Territorial. Eligibility always depends on the specific characteristics of the project and the calls for proposals currently open. Banks and Financial Institutions. Bank financing continues to play an essential role in the financial structuring of tourism projects. Most investments are financed through a combination of equity, bank loans, public incentives and partner or shareholder loans. Correct financial structuring of the project is fundamental to ensuring its viability and sustainability. THE IMPORTANCE OF THE BUSINESS PLAN Regardless of the chosen financing source, the success of a tourism project depends on the quality of its planning. A well-prepared Business Plan must demonstrate the economic viability of the project, the financial sustainability of the investment, the commercial positioning of the unit, the demand potential, revenue generation capacity, expected profitability and debt repayment capacity. For investors, banks and funding entities, the Business Plan is one of the most important documents in the evaluation process. ENVIRONMENTAL SUSTAINABILITY: AN INCREASINGLY VALUED FACTOR Tourism projects that integrate investments linked to environmental sustainability tend to benefit from significant valuation in analysis and selection processes. Among the most valued investments are photovoltaic panels, heat pumps, solar thermal systems, efficient water management, rainwater harvesting, electric mobility, waste reduction, the circular economy and environmental certifications. In addition to contributing to lower operational costs, these investments reinforce the unit's sustainable positioning and increase its appeal to tourists. DIGITAL TRANSFORMATION: AN ESSENTIAL INVESTMENT Digitalisation is currently one of the most relevant areas in the development of tourism developments. Key investments in high demand include PMS systems, direct booking engines, CRM, Revenue Management, digital check-in, digital keys, mobile apps, Artificial Intelligence, chatbots and integrated management systems. Digitalisation helps increase operational efficiency, enhance the guest experience and boost operating profitability. WHY IS IT IMPORTANT TO STRUCTURE THE PROJECT CORRECTLY? Experience shows that the most successful projects are those that are professionally prepared from the outset. A well-structured project significantly increases the chances of approval and reduces risks during the execution phase. HOW CONSULSTAFF CAN SUPPORT YOUR PROJECT For 20 years, Consulstaff has been supporting investors, companies and tourism promoters in structuring and financing investment projects. Our team provides specialised support in preparing Business Plans, economic and financial feasibility studies, grant applications, negotiations with funding entities, project execution monitoring and project closure. Whether you intend to build a new hotel, develop a rural tourism property, refurbish an existing unit or create an innovative tourism project, Consulstaff has the experience and expertise required to help you turn your vision into a funded project. Consulstaff — Turning opportunities into funded projects for 20 years.