The decrease is still small, but businesses are already noticing a difference during what is normally the busiest month of the year, RTP reports.

August has traditionally been the peak of the summer season in the Algarve, when beaches, hotels and restaurants are at their busiest. However, the cost of spending a holiday in the region has continued to rise.

A week in a two-bedroom apartment in the Algarve can cost around €1,700 in August, making a summer holiday in the region increasingly expensive for Portuguese families.

The higher cost of accommodation is not the only expense visitors have to consider, with meals, travel and other holiday costs adding considerably to the final bill.

For some Portuguese tourists, this is making other destinations more attractive.

This summer, the Alentejo coast has been gaining popularity among Portuguese holidaymakers, with a recent study by IPAM indicating that it has overtaken the Algarve as their preferred summer destination.

RTP reported in July that the Alentejo coast had become the top summer choice among Portuguese people surveyed, with the Algarve moving from its traditional position at the top.

Despite the change, the Algarve remains one of Portugal's main holiday destinations and continues to receive large numbers of international visitors.

The real impact on this year's summer season will become clearer once the final figures for August are available. For now, the decline being reported is relatively small, but the cost of an Algarve holiday appears to be having an increasing influence on where Portuguese residents choose to spend their summer break.