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Best Towns in The Algarve and Where to Stay (Portugal)

Best Towns in The Algarve and Where to Stay (Portugal)

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With so many stunning towns in the Algarve region of Portugal, it can be difficult deciding where to stay in the Algarve.

Each town has something unique to offer, from stunning beaches and natural landscapes to historic buildings or a buzzing nightlife. Below you will find some of the best areas to stay in the Algarve.  

Where to Stay in The Algarve

Below are some descriptions of all of the main Algarve towns to help you choose the best ones to base yourself from.

I’ve also included some hotel recommendations after extensive research for some great options no matter your budget. There are some backpacker budget places to stay in the Algarve below, as well as some mid-range resorts and luxury hotels in the Algarve.

I hope this helps you decide where to stay in the Algarve and if you need more Algarve inspo, these posts will surely help you plan your stay:

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Best Towns in The Algarve and Where to Stay

1. Where to Stay in Odeceixe

One of the lesser known towns in the Algarve region is Odeceixe, but that doesn’t mean it shouldn’t be considered when deciding where to stay in the Algarve.

The town sits on a hillside, opposite the valley of the Ribeira da Seixe, with most of the town built around the main street, which is full of lively bars and cafes, small shops and a couple of minimarkets.

architecture Odeceixe Portugal

Street in Odeceixe

The town is characterized by its laid-back atmosphere and gorgeous beach, which offers great surfing conditions, safe swimming and soft sands.

Odeceixe Hotels

Budget: Residencia do Parque

This residence is a bed and breakfast located in the center of Odeceixe. With Monte Clerigo beach close, there are plenty of attractions and restaurants nearby.

Mid-range: Monte Joao Roupeiro

Located just out of this Algarve town in the Portuguese countryside, a stay here will leave you feeling completely relaxed thanks to the outdoor swimming pool and natural surroundings.

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Luxury: Casa Do Moinho

This 5-star accommodation’s highlight is its outdoor swimming pool, which boasts panoramic views of the surrounding natural park. Rooms have chic, modern furnishings, with some rooms coming with a kitchen and dining area.

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Airbnb Option: Casinha do Mar

Stay in this charming suite near all the markets and cafes. It’s equipped with the essentials and only 3 km from the beach.

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2. Where to Stay in Sagres

Located on the western tip of the Algarve region, Sagres is blessed with a rugged yet beautiful stretch of coastline. When deciding where to stay in the Algarve, Sagres is ideal for those that are looking for adventure, with its dramatic landscapes carved by years of raging seas and bracing winds.

Due to these conditions, Sagres is a popular Algarve town for surfers who come to try their luck on the turbulent seas. Other activities include cycling, hiking over the cliffside trails or simply taking in the sunshine and views from the cliffs and beaches.

Ocean cliffs in Sagres Portugal

Dramatic cliffs in Sagres

The town itself is laid back and peaceful and has multiple beaches, all of which face different directions. The Parque Natural do Sudoeste Alentejano e Costa Vicentina is an area of natural beauty, filled with remote beaches.

Part of the town’s allure is its remote setting, but you’ll also find a number of modern hotels and popular restaurants, making it one of the best areas to stay in the Algarve.

Side note: This is where I choose to stay in the Algarve! It’s become a second home to me and is definitely my favorite Algarve town.

Sagres Hotels

Budget: Apartamentos Atalaia

This place features bright rooms and a large terrace for dining. It is also centrally located with restaurants and attractions nearby, are within walking distance including Sagres beach on the Algarve coast.

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Mid-range: Mareta View

This modern, boutique hotel not only overlooks the beach but also offers a tropical palm garden, sundeck and hot tub. Guests can enjoy a continental breakfast, drinks at the charming ocean bar and 24-hour room service.

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Luxury: Martinhal Sagres

The impressive resort of Martinhal certainly reflects its 5-star status, overlooking the beautiful beaches of Sagres. The resort has a total of 5 pools, boutique style rooms and villas with private balconies, artificial grass tennis courts, 3 restaurants, 4 bars and a number of day time and evening activities.

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Airbnb Option: Estudio S – Atlantic Sagres

Beautiful studio overlooking central Sagres and only a 5 minute walk to Tonel beach.

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3. Where to Stay in Lagos

Lagos is one of the best areas to stay in the Algarve thanks to its perfect combination of modern attractions and rich history. The monuments and buildings that line the streets tell a story about the many different people who have called the town their home, and impressive natural harbor has been the start of many maritime adventures.

Beach in Lagos, Algarve

Lagos beach

The beautiful beaches are also a major attraction to this part of the Algarve, and there are many to choose from. Stone archways and cliffs separate the tiny coves, all of which have been blessed with picturesque blue waters. Popular family attractions include a few water parks and a zoo that gives you the opportunity to swim with dolphins.

At night, the streets change, and buskers and street entertainers emerge as the many restaurants, bars and clubs fill with people who party long into the warm Portuguese evenings.

Lagos Hotels

Budget: Dona Ana Garden

Although a budget option, the rooms here are clean and spacious, with the center of this Algarve town just a 10-minute walk away. The hotel features a heated pool, free parking and wi-fi.

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Mid-range: Casa Luma B&B

With clean, contemporary rooms and the option of a continental breakfast every morning, the Casa Luma is a popular accommodation choice. Rooms have free wi-fi, a private bathroom and a terrace.

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Luxury: Boutique Hotel Vibenda Miranda

Only a 5-minute stroll to the beach, this boutique hotel features an outdoor spa pool, sauna, a range of massage options and Atlantic Ocean views. And rooms are uniquely furnished and have their own private balcony or terrace.

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Airbnb Option: Beco Attic by Seewest

Amazing views from Beco Attic in Lagos, with all the entertainment you need just a few miles away from the studio.

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4. Where to Stay in Portimao

Portimao is one of the biggest Algarve towns, traditionally a town used for shipbuilding, sardine fishing and fish processing, today, the town is a bustling tourist hub. Head to Portimao for its extensive shopping opportunities, its beautiful scenic promenade and a wide range of historic buildings.

The waterside restaurants all serve a range of freshly cooked seafood, and the countless bars and coffee shops will satisfy even the fussiest foody.

When deciding where to stay in the Algarve, note that the town center is full of Portuguese charm, with pedestrianized streets linking the open-air plazas, many of which are filled with pavement cafes.

The Museu de Portimao is a great place to stop and learn about the history of the city, while the impressive buildings of the Camara Municipal de Portimao and the La Rosa Factory are well worth a look.

Just south of town is the popular beach resort of Praia da Rocha, with a long golden stretch of sand.

Portimao Hotels

Budget: Hotel Made Inn

With modern, themed rooms, terraces with panoramic views and buffet breakfast, this hotel is the ideal accommodation if you are on a budget. Surrounded by shops and restaurants it is in the ideal location in the center of this Algarve town.  

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Mid-range: Jupiter Marina Hotel

Located on the city riverside, this lovely hotel features a rooftop, infinity swimming pool, Balinese beds and beautiful views. The hotel is set in the former cannery of Facho factory, and each room has modern décor, air-con, flat-screen TV and balcony.

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Luxury: Bel Vista Hotel and Spa

This beautiful hotel is set in a stately, historic building offering boutique accommodation in the Praia da Rocha part of town. With direct access to the beach and al fresco dining on the terrace restaurant, the hotel simply oozes charm and sophistication.

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Airbnb Option: BeHappy Apt

This fully renovated and modernized apartment is minutes away from Central Portimao, with a private swimming pool for you and your guests.

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5. Where to Stay in Carvoeiro

Carvoeiro is the definition of a Portuguese resort town, set to a backdrop of rugged cliffs and golden beaches, it is one of the best areas to stay in the Algarve. If you are a looking for a relaxing break away from it all, then Carvoeiro is your destination.

The beaches of Praia de Carvoeiro and Praia do Vale Centeanes are some of the most picturesque in the region, framed by towering cliffs and a collection of beachside amenities.

Carvoeiro beach in Algarve

Carvoeiro beach

In addition to enjoying the beaches, Carvoeiro is also likely to appeal to nature lovers, with options to kayak along the coast, take on challenging cliffside hiking routes and cycle the twisting roads.

Carvoeiro Hotels

Budget: Carvoeiro Beach and Pool

Just a short distance to the beach and with an outdoor pool, the accommodation provided is perfect for a budget stay. With a helpful reception team, you can really get the most out of your holiday to the Algarve.


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Mid-range: Rocha Brava Village Resort

Situated on a clifftop the resort offers its guests the choice of 3 swimming pools, 4 tennis courts and a gym. The many apartments are surrounded by lush gardens, and with on-site restaurant, coffee shop, bar, supermarket and crazy golf, you won’t even have to leave the property to have a fantastic holiday.

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Luxury: Tivoli Carvoeiro

This 5-star hotel boasts large, impeccably decorated rooms, all of which have an elegant and temporary design and come with air conditioning, wi-fi, a minibar, TV and large private bathroom with complimentary amenities. You can also enjoy the fitness center, spa, pool and on-site restaurants during your stay.

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Airbnb Option: Carvoeiro Apartment for 2

Enjoy this 5-star apartment with a beautiful top story deck, with a short walk to the center of town and the beachfront. 

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6. Where to Stay in Albufeira

The town of Albufeira is arguably one of the best areas to stay in the Algarve, it is the most touristy in the region, and simply bursts with energy and things to do. The main beach is large and picturesque, curving around the coast with plenty of room for everyone. But there are several beaches in Albufeira to check out.

Beach in Albufeira Portugal

Albufeira beach

One of the things this vibrant Algarve town is well known for is its nightlife scene, with its ‘Strip’ street a riot of color, bars, clubs and drinks deals. There are also a range of waterparks and theme parks, making it a desirable location for families too.

The Old Town couldn’t be more contrasting to the strip, with cobbled streets and small pubs, which makes for a lovely place to explore during the day.

Albufeira Hotels

Budget: Alfagar Cerro Malpique

This hotel offers a number of self-catering apartments across two buildings. Each apartment comes with a fridge, coffee maker, balcony and satellite TV, providing everything you need for a comfortable stay. For relaxation, head to the hotels steam bath, or sip a drink on the terrace, complete with sea views.

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Mid-range: Hotel Baltum

In the center of Albufeira, this hotel is the perfect choice for travelers looking to immerse themselves in the bustling streets of the town. As well as a range of rooms with private bathrooms, the hotel also has a range of fully-equipped apartments, an attractive terrace, and an onsite restaurant.

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Luxury: Vila Gale Cerro Alagoa

A little piece of luxury in the heart of the Algarve, this hotel features an interior heated pool and sauna as well we two exterior pools, a varied breakfast and on-site restaurant, serving traditional Portuguese cuisine. All rooms are impeccably decorated with chic furnishings and offer a mini-bar, air-con and work desk.

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Airbnb Option: Oceanview Studio

Here you can relax atop an ocean view terrace and be within a few minutes walk to all the nearby markets.

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7. Where to Stay in Vilamoura

Offering world-class golf courses, stunning beaches, and a bustling marina, it is no wonder that Vilamoura is such a popular Algarve town. The town is both stylish and sophisticated, home to gourmet restaurants, chic bars, and million-dollar yachts.

Ship in the sea Vilamoura Quarteira Portugal


The beaches on this area of the coast have soft, golden sands and aqua blue waters, as well as a range of water sports options to entertain the whole family.

Vilamoura Hotels

Budget: Parque Mourabel Oasis

With two outdoor pools, kitchenettes[VP1]  and balconies, a stay in Parque Mourabel Oasis certainly will not feel like a budget option. Enjoy live music or karaoke in the evenings, and spend your days on the tennis court, sunbathing or using the hotel bikes.

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Mid-range: Vilamoura Garden Hotel

This beautiful hotel is located a mile from the Marina, however, with a beautiful outdoor pool and sun terrace, you may not want to leave. Rooms are modern and tastefully decorated, with some even having an additional private seating area.

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Luxury: The Lake Resort

For 5-star luxury, this resort not only offers a natural sandy beach pool, but also a floating restaurant, spacious rooms, a spa area and more.

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Airbnb Option: Apartment Vilamoura

With plenty of space for guests, enjoy two balconies in a calm area of Vilamoura. Only 10 minutes from Vilamoura beach and Falesia beach.

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8. Where to Stay in Faro

With a fascinating history, surrounded by beautiful nature and with an abundance of Portuguese charm, Faro is one of the best Algarve towns to base yourself in to see all that this stunning region of Portugal has to offer.

As an airport town, it is one of the most easily accessible, yet is so much more than just a point of entry to the southern coast.

The historic center of the city is framed in ancient walls, inside of which you can find quaint pedestrianized streets, lively plazas and an abundance of pavement cafes and inviting shops. By night, the city transforms into a buzzing hub of activity, with plenty of nightlife options to enjoy.

The nearby Ria Formosa nature park is made up of mudflats and saltwater lagoons, a mecca for nature lovers thanks to the number of birds and wildlife that call the area their home. There are also a number of pristine, soft sand beaches which are popular with locals and tourists alike, helping to make it one of the best areas to stay in the Algarve.

Faro Hotels

Budget: Residencial Condado

Located in the heart of Faro, the rooftop terrace of this hotel offers some great views of the city. Rooms are simply decorated with a satellite TV, and some come with a balcony. With 24-hour tea and coffee, luggage storage and free wi-fi, it is a great budget venue to base yourself.

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Mid-range: Hotel Monaco

Modern, spacious rooms, a central location and outdoor pool have all helped Hotel Monaco become a popular hotel. The stylish bar is the perfect place to relax with a drink after a long day, or alternatively make use of the various spa treatments available.

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Luxury: Hotel Faro and Beach Club

This beautiful hotel is located in downtown Faro, overlooking the Old Town, Marina and Ria Formosa Natural Park. The spacious rooms all come with a balcony and the rooftop terrace restaurant offers incredible views. The hotel’s beach club is easily accessible thanks to the free shuttle.

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Airbnb Option: Cozy Apartment in Faro

Renovated and equipped with everything you need, this cozy apartment is in a nice and quiet area surrounded by two main churches in Faro. 

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9. Where to Stay in Tavira

As an old Moorish town, Tavira has managed to maintain much of its original charm, character, and heritage, as well as being a popular tourist hub. The town is located along the coast of the Gilao River and is made up of quaint churches, cobbled streets, tiny plazas, and a plethora of historical buildings.

Don’t let the old town charm fool you, however, as by night the town comes alive with families dining al fresco in the many restaurants of the historical center, and the buzzing Ubi club is one of the best areas in the Algarve to party, set in a huge old factory you can dance until the sun rises.

Architecture building Portugal

Quaint streets in all of the Algarve towns are what you can expect.

To the south of town you’ll find some of the least developed beaches on the coast, simply oozing rugged, natural beauty. For the more active individual, there are a number of hiking paths, golf courses, cycling routes and waterways just waiting to be explored.

Tavira Hotels

Budget: HI Tivira

With double rooms, twin rooms or shared dormitories, this hotel offers accommodation to suit a range of budgets. Rooms are simple and clean, and the shared kitchen is helpful if you don’t fancy eating out.

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Mid-range: Vila Gale Tavira

These elegant rooms come with a private balcony and classy furnishings. The hotel features an outdoor pool and spa, health club, restaurant, and bar, and is situated on the banks of the Ria Formosa.

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Luxury: Fazenda Nova Country House

The ultra-modern suites here come with all the added extras for a truly luxurious stay, including continental breakfast, seating area, toiletries, a bathrobe, and slippers. With a summer pool and on-site restaurant, you’ll never have to leave the resort.

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Airbnb Option: Apartment Town Tavira

Only a few minutes away from the city center and with access to the beaches, enjoy this newly refurbished apartment.

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What To Do in The Algarve

If you’ve found the best area to stay in the Algarve and are now wondering what you can actually do around the area, these posts will help you plan everything you need:

What are you most excited about doing? Where did you decide to stay in the Algarve? Let us know in the comments!

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Best Towns in The Algarve and Where to Stay

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