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By LiveAlgarve on 15th August 2025 - 4-5 m. reading time
While the Western Algarve’s property market remains strong, a less‑discussed yet equally important factor driving returns is tourism infrastructure and accessibility. In 2025, the region is benefitting from new flight connections and a recognition as Europe’s best‑value holiday destination - developments that are set to enhance rental yields and long‑term capital growth.
Faro Airport Record Passenger Growth and New Routes
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Record traffic – Faro International Airport handled 9.8 million passengers in 2024, nearly doubling its traffic since 2010, and is expected to surpass 10 million passengers in 2025. This surge underscores the Algarve’s popularity and the importance of efficient air links for the western towns of Lagos, Portimão and Praia da Luz.
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First US route – On 17 May 2025 United Airlines launched the first direct flight from Newark (EWR) to Faro, operating four times weekly during the summer. This seasonal service provides seamless connections from major U.S. cities, making the Algarve more accessible to North American visitors and investors.
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Expanded network – In August 2025 Faro offers nearly 90 destinations, with London Gatwick as the most‑served airport. Ryanair alone operates 274 flights per week, reflecting a strong schedule (airserviceone.com). The UK remains the top market with 109 weekly departures, ensuring a steady flow of British tourists to the Western Algarve.
The Algarve Named Europe’s Best‑Value Destination
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Lowest tourist costs – The 2025 Post Office Holiday Money Report ranked the Algarve the cheapest destination in its global cost barometer, with a basket of eight tourist items (such as meals and drinks) costing £58.95 (travelweekly.co.uk). This marks the first time in nine years that the region has taken the top spot, beating destinations like Cape Town and Bali.
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Britons plan more travel – A survey of over 2,000 UK adults found that 60% plan to travel abroad in 2025 and 73 % intend to holiday in Europe (travelweekly.co.uk). With the pound stronger against many foreign currencies, British travellers enjoy more spending power, further boosting demand for Algarve holidays.
What This Means for Property Investors
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Higher rental demand – Increased passenger numbers and affordable tourist costs translate directly into more bookings for holiday rentals. In Lagos, typical rental yields for modern villas with pools currently range between 5% and 7%, and the influx of visitors helps maintain these returns.
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Enhanced visibility – Direct flights from the United States open the Western Algarve to a new demographic of buyers. American investors already represent a growing share of foreign acquisitions in Portugal; easier access via Newark‑Faro flights could accelerate this trend.
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Long‑term growth – Tourism growth supports infrastructure investment and amenities, from improved highways to upgraded marinas, which, in turn, increase property values. The recognition of the Algarve as the best‑value destination helps maintain a broad visitor base even as other destinations become more expensive.
Tips for Buyers Considering Tourism‑Driven Investments
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Prioritise proximity to transport hubs – Properties within easy reach of Faro Airport or main highways (e.g., around Lagos Marina or Portimão’s riverfront) will likely benefit most from increased visitor numbers.
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Check licensing regulations – Recent reforms to Portugal’s Alojamento Local (AL) licences introduced transferable and permanent licences.
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Consider year‑round appeal – To reduce seasonality risk, look for properties near golf courses, hiking trails or cultural sites that attract off‑season visitors.
Conclusion
The Western Algarve’s appeal goes beyond sunny beaches and lifestyle; its growing air connectivity and best‑value status are drawing more visitors and underpinning property returns.
With record passenger numbers at Faro Airport and the first direct U.S. route in operation, the region is set to welcome an even broader international audience. Combined with the Algarve’s affordable tourist costs, this surge in visitation bolsters rental yields and provides long‑term support for property values.
Looking to benefit from these trends? Live Algarve can help you identify properties in the Algarve that maximise tourism-driven returns, navigate licensing requirements and capitalise on the Western Algarve’s unique combination of value and accessibility.
Contact us today to explore opportunities in areas such as Lagos, Carvoeiro, Portimão, Praia da Luz and more.
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