Can Location be a Competitive Factor for Hotels in Low-Density Territories? A Study in Alto Alentejo

The tourism sector holds significant importance and impact in Portugal. The fact that Portugal is a country predominantly bordered by the Atlantic Ocean makes “sun and beach” tourism one of its main tourist products. This has led to a strong concentration of tourist demand and, consequently, of tourist supply along the coast. On the other hand, inland regions, classified as low-density areas, face challenges but also present opportunities to develop a distinctive tourism model. To remain competitive in tourism sector, the hotel industry must adopt strategies that enable differentiation from competitors. These strategies can be based on various factors; however, hotel location is undoubtedly one of the most critical and irreversible decisions in terms of positioning and the target audience a hotel aims to reach. The aim of this chapter is to analyze whether location is considered an important competitiveness factor in low-density areas. A quantitative research methodology was used, and a questionnaire was administered to 25 hotel establishments in the Alto Alentejo region, resulting in a sample size of 68%. The results indicate that the territory’s unique natural and cultural resources are essential to hotel development. Respondents expressed confidence in their hotel’s location, recognizing it as a factor that enhances their market competitiveness. Being located in a low-density rural area is perceived as an opportunity for hotels to differentiate themselves. This study provides practical insights to support hotel managers, investors, and destination management organizations in attracting new hotels to the region.Keywords: Tourism, Low-density areas, Competitiveness, Location, Alto AlentejoDOI: https://doi.org/10.54663/2182-9306.2025.SpecialIssueMBP.85-100