Where to Stay in The Algarve: 9 Best Algarve Towns

With so many stunning towns in the Algarve, choosing where to base yourself isn’t easy. Each one has something different to offer, from dramatic surf beaches and remote landscapes to historic old towns, buzzing nightlife, and world-class resorts.

The good news is that the whole region is only about 1.5 hours end to end, so you really can stay in one spot and explore from there. Here’s a breakdown of the best towns in the Algarve and the best places to stay in each one.

A rental car makes everything significantly easier, I rent one every time I visit.

Where to Stay in The Algarve

1. Odeceixe

One of the lesser-known towns in the Algarve, Odeceixe sits on a hillside with a relaxed main street full of bars, cafes, and small shops.

Its beach is the real draw: great surf, safe swimming, and soft sand. If you want to escape the tourist trail without sacrificing a beautiful Algarve experience, this is a solid choice.

• Casa Dorita – Two minutes from the beach with sea views from the outdoor dining area. Great value.
• Monte Joao Roupeiro *RECOMMENDED* – Set in the Portuguese countryside just outside town with an outdoor pool and peaceful natural surroundings.
• Casas Do Moinho – Five-star accommodation with panoramic pool views over the natural park. Modern rooms, some with kitchen and dining area.
• Nature House – Beautiful detached home surrounded by fruit and olive trees with a private terrace. Just outside Odeceixe.

2. Sagres

Sagres sits on the western tip of the Algarve with dramatic, wind-carved cliffs, rugged coastline, and a remote feel that’s completely different from the busier resort towns further east.

It’s a haven for surfers, hikers, and anyone who wants wild scenery and a genuinely laid-back pace of life.

Multiple beaches face different directions so you can almost always find a sheltered spot, and there are good restaurants and modern hotels despite the remote setting.

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

• Martinhal Sagres *RECOMMENDED* – Five-star resort overlooking Martinhal Beach with five pools, three restaurants, a spa, kids’ center, and watersports center. The best luxury option in Sagres.
• Lighthouse Hostel – Friendly hostel with dorms, private rooms, and bungalows. Garden, rooftop terrace, BBQ area, and pool.
• Apartamentos Atalaia – Bright rooms with a large terrace, centrally located with Sagres beach within walking distance.
• Mareta View – Modern boutique hotel overlooking the beach with a tropical garden, sundeck, hot tub, and ocean bar.
• Salmon House – One-bedroom apartment with a large terrace right in the center of Sagres, short walk to the beach.

3. Lagos

Lagos is one of the best bases in the entire Algarve. It has it all — stunning beaches with dramatic rock arches and clifftop trails, a beautiful historic Old Town full of monuments and history, great restaurants and bars, and a lively nightlife scene.

The Ponta da Piedade coastline alone is worth basing here for. It’s central enough to reach most of the Algarve easily by car and has a great range of accommodation for every budget.

• Boutique Taghostel – Right on the marina with a great rooftop terrace and sea views. Vintage-style hostel, 5 minutes walk from everything.
• Dona Ana Garden – Budget-friendly with clean spacious rooms, heated pool, free parking, and a 10-minute walk to the center.
• The Salty Lodge *RECOMMENDED* – Stylish apartments in the heart of the historic center. Great for privacy and flexibility.
• Casa Luma B&B – Contemporary rooms with private terraces, optional breakfast, free wifi, and a calm atmosphere.
• Boutique Hotel Vivenda Miranda – Five minutes to the beach with Atlantic views, outdoor spa pool, sauna, and uniquely furnished rooms. The romantic option.
• Casa do Monte – Old fisherman’s cottage right on the beach in Luz with a sunny terrace overlooking the sea.

READ MORE: 19 Best Things To Do in Lagos, Portugal!

4. Portimao

One of the Algarve’s biggest towns with a proper city feel, great shopping, a beautiful scenic promenade, waterside seafood restaurants, and a rich history as a fishing and shipbuilding port.

The pedestrianized center is full of Portuguese charm, and just south of town is Praia da Rocha, a long golden stretch of sand backed by impressive cliffs. A good base if you want urban convenience alongside beach access.

• My Guesthouse – Simple, clean hostel in the middle of town with a private pool and a short walk to three beaches.
• Hotel Made Inn – Modern themed rooms with terraces and panoramic views. Budget-friendly and centrally located.
• Jupiter Marina Hotel *RECOMMENDED* – Rooftop infinity pool, Balinese beds, and beautiful marina views. Set in the former Facho cannery with lots of character.
• Bela Vista Hotel and Spa – Gorgeous boutique hotel in a historic building at Praia da Rocha with direct beach access and al fresco terrace dining.
• Praia da Rocha Apartment – Modern two-bedroom apartment right on the beach with sea views from the balcony.

5. Carvoeiro

Carvoeiro is the Algarve at its most charming. A former fishing village turned gorgeous resort town set against rugged cliffs and golden beaches.

It hits the sweet spot between lively and relaxed, with a beautiful main beach right next to the town center, the stunning Algar Seco rock formations a short walk away, and the Seven Hanging Valleys trail starting here.

Great for couples, families, and anyone who wants beauty without the chaos of bigger resort towns.

• O Quintal Guesthouse – Cozy B&B with terrace, pool, and just 200 meters from the beach. Great value.
• O Castelo Guesthouse – Boutique B&B with some of the best views in Carvoeiro. Sea-view rooms and breakfast on the ocean-front terrace.
• Rocha Brava Village Resort – Clifftop resort with 3 pools, 4 tennis courts, lush gardens, and on-site restaurant, bar, and supermarket.
• Algar Seco Parque *RECOMMENDED* – Clifftop resort named for the rock formations it sits above. Studios, suites, apartments, villas, and bungalows — all with private balconies and ocean views. Multiple pools, free wifi, 10-minute walk to Carvoeiro center.
• Tivoli Carvoeiro – Five-star hotel with elegant rooms, fitness center, spa, pools, and on-site restaurants.
• Casa Eliza – Spacious penthouse apartment with a private rooftop terrace and pool on site. Minutes from the beach.
• Terraços De Benagil – Stunning clifftop apartments with epic ocean views, communal pool, WiFi, and AC.

READ MORE: 9 Captivating Things To Do in Carvoeiro, Portugal

6. Albufeira

Albufeira is the most popular and touristy town in the Algarve, and for good reason. The main beach is large and beautiful, there are several incredible beaches to choose from nearby, and the town buzzes with energy.

The Strip is legendary for nightlife, while the cobbled Old Town offers a completely different, more relaxed atmosphere by day. There’s also a range of waterparks, theme parks, and plenty of things to do making it a popular choice for families too.

• Salgados Dunas Suites *RECOMMENDED*– Beachfront luxury resort with six pools, tennis courts, spa, fitness center, rooftop bar, and a seasonal raw food restaurant. Direct access to Salgados Beach.
• Windmill Hill – Three-bedroom apartment with split-level lounge, modern kitchen, and a rooftop terrace with built-in BBQ and ocean views.
• Son of a Beach Hostel – Social hostel in the Old Town with a shared kitchen, rooftop terrace, and bar. Close to beaches and restaurants.
• Alisios Hotel – Award-winning hotel steps from Alemães Beach with restaurant, terrace bar, and indoor pool.
• Grand Muthu Oura View Beach Club – Ocean-front resort with outdoor pool, gym, restaurant, pool bar, and direct beach access.
• Vila Gale Cerro Alagoa – Four-star hotel with two outdoor pools, heated indoor pool, sauna, and traditional Portuguese breakfast.
• Sunny Penthouse – Bright two-bedroom apartment in the historic district with a balcony and short walk to Praia dos Pescadores.
• Pine Cliffs Resort *RECOMMENDED* – Luxury clifftop resort with Atlantic views, golf course, tennis courts, spa, kids’ club, and direct access to Praia da Falésia.

RELATED: 23 Amazing Things To Do in Albufeira, Portugal

7. Vilamoura

Vilamoura is the Algarve’s most upscale resort town — stylish, sophisticated, and built around a stunning marina lined with million-dollar yachts, gourmet restaurants, and chic bars.

It’s also home to some world-class golf courses and beautiful soft-sand beaches with great watersports. If you want luxury and a more polished experience, this is your spot.

• Parque Mourabel Oasis *RECOMMENDED* – Two outdoor pools, kitchenettes, balconies, live music evenings, tennis courts, and hotel bikes. Great value for the facilities.
• Vilamoura Garden Hotel – A mile from the marina with a beautiful outdoor pool and sun terrace. Modern, tastefully decorated rooms.
• The Lake Resort – Five-star luxury with a natural sandy beach pool, floating restaurant, spacious rooms, and full spa facilities.
• Peace on the Sand – Renovated apartment overlooking a quiet garden, close to the fish market and 200m from the beach.

8. Faro

Faro is far more than just an airport town. The historic center is framed by ancient walls, with quaint pedestrianized streets, lively plazas, and pavement cafes; it’s genuinely lovely to wander through.

By night it transforms into a buzzing hub. The nearby Ria Formosa nature park is a mecca for wildlife lovers, and there are beautiful local beaches a short trip away. If you want authentic Portuguese city life as your Algarve base, Faro delivers.

• Hostel Casa d’Alagoa *RECOMMENDED* – Charming historic villa converted into a hostel with dorms and private rooms. Organized activities and close to the Old Town.
• The Pocket Pillow House – Clean, charming guesthouse in the center of town with rooms for a range of budgets and bike hire available.
• Sunlight House – Pastel rooms near the Old Town with shared kitchen or included breakfast. Simple, lovely, and good value.
• Hotel Faro and Beach Club – Downtown Faro overlooking the Old Town, Marina, and Ria Formosa. Rooftop terrace restaurant and free shuttle to the beach club.
• Faro Carmo Lodge – Charming loft-style home in downtown Faro, minutes from the historic district and harbor.

9. Tavira

Tavira is one of the most beautiful and authentic towns in the Algarve, an old Moorish town with quaint churches, cobbled streets, a river running through the center, and charming plazas lined with historic buildings.

It’s far less touristy than the western Algarve hotspots, which is a big part of its appeal. To the south you’ll find some of the least developed beaches on the coast.

• HI Tavira – Simple, clean rooms and dorms with a shared kitchen. Budget-friendly and convenient.
• Vila Gale Tavira *RECOMMENDED* – Elegant rooms with private balconies on the banks of the Ria Formosa. Outdoor pool, spa, health club, restaurant, and bar.
• Fazenda Nova Country House – Ultra-modern suites with all the luxury extras — continental breakfast, bathrobes, summer pool, and on-site restaurant.
• Free Spirit – Large three-bedroom apartment in downtown Tavira, close to the river and all the city has to offer. Great for groups.

More Portugal

More Around Portugal

17 Algarve Beaches You Have to Visit (Portugal)

Read More

A Perfect 3-7 Day Algarve Itinerary: Hike, Surf + Beach Bum! (Portugal)

Read More

A 5 Day Off-The-Beaten-Track Azores Itinerary: Flores And Corvo, Portugal

Read More

11 Adventurous Algarve Tours Worth Taking (Portugal)

Read More

Which Algarve town are you most excited about? Let us know in the comments!

Pin this post for later!