The Algarve is definitely the first place that comes to mind when you think of the great beaches in Portugal. And for good reason! Located along the Atlantic coast, it is known for its dramatic scenery, with scenic beaches backed by orange sandstone cliffs and sea caves like Benagil. As it’s located just above North Africa, you’ve got at least 300 days of sunshine a year.

It’s no wonder that people are flocking to the Algarve. The region covers the entire southern coastline of Portugal, stretching from the Spanish border to its western tip near Lagos. We loved our time in the Algarve and would recommend it to anyone who is planning to visit Portugal.

One thing that we found a little difficult when we first visited The Algarve region was deciding on where we should stay to best enjoy it. You’ve got Lagos, Albufeira, and small fishing villages like Salema in central and western Algarve. Eastern Algarve has Faro and Ria Formosa Natural Park. There was just so much choice. Each section of the region has a different personality, and we’ll help you narrow down which personality best fits yours.

We know how important it is to find the right neighborhood for your trip. Here’s where to stay in Algarve – with our extra advice on the best hotels and resorts in each area.

Why You Should Listen to Us

We know the Algarve like the back of our hands. You can read all about our adventures in this beautiful region on our blog; in fact, keep your eyes out because we’ll drop in some links to guides based on our experiences when relevant.

We know some people love the social element of a popular tourist resort. In contrast, others prefer a historic old town or a romantic setting on a rooftop terrace. Travel is for everyone, and we want to match you with your ideal area and hotel in the Algarve.

Where To Stay in the Algarve

It’s safe to say that the Algarve is huge. It incorporates 16 different municipalities, and where you choose to stay in the Algarve can massively impact your trip. While you have four main choices (inland countryside, city, towns, or fishing villages), there’s so much variation in each area’s personality and tourist sites.

Whether you want a central location for nightlife, sandy beaches for a relaxed beach holiday, or historical sites for sightseeing, we’ve got you covered. Here’s where to stay in Algarve.

Where We Stayed: Tivoli Carvoeiro Algarve

When we most recently visited the Algarve coast, we stayed at Tivoli Carvoeiro Algarve in the beach holiday town of Carvoeiro. We found this 5-star property absolutely gorgeous, and its location on a cliff overlooking Praia do Vale Covo really blew us away. It’s definitely where to stay in Algarve for luxury and novelty views.

There’s a complimentary shuttle service and a daily breakfast buffet. We liked the complex’s outdoor swimming pools and spa; there’s even a dive center onsite. The rooms themselves offer either balconies or terraces, some of which have ocean views (worth the splurge if you value that outdoor space).

1. Carvoeiro: Our Recommendation

Carvoeiro is an ever-so-slightly sleepy resort town. It’s quieter than Albufeira and even Vilamoura. Still, it offers an alternative base for those who want a less touristy experience in the Algarve. Carvoeiro has some beautiful beaches, including Praia do Paraiso, Praia do Carvoeiro, and the nearby Praia da Marinha. It’s somewhere to stay in Algarve for laidback exploration of its beaches, boardwalks, and clifftop caves.

You can hike the Carvoeiro Boardwalk, which leads you along 570 meters of coastline dotted with explorable caves. The boardwalk eventually leads you to Algar Seco, a beautiful area of rock formations. The town center is full of cafes and bars, while most people spend their days on the beach enjoying those plentiful 300 days of Algarve sunshine.

Carvoeiro might be quiet, but its location makes it an ideal base for sightseeing. You are just a 30-minute bus or 20-minute car ride from Portimao, a port city with an old town and thriving marina. If you rent a car, as we did, you can sightsee nearby attractions like the Fort of Santa Catarina de Ribamar (a medieval fort) or venture to the Moorish Castelo de Silves. And if you really want to be part of the main tourist crowd, you can drive just 30 minutes east to Albufeira and its Benagil Caves.

Highlights of Staying in Carvoeiro

Best Places to Stay in Carvoeiro

Carvoeiro is a small town, so your main option is to stay in the town center or its outskirts. However, it does sprawl a little, spreading inland and along the coastline.

Stay along the coastline if you want ocean views or easy beach access. However, if you’re more of an urban lover, stay in the town center, which means being just a few minutes’ walk from cafes and bars.

Luxury: Tivoli Carvoeiro Algarve

Tivoli Carvoeiro Algarve is the 5-star hotel we’ve just told you about. This place took our breath away. This contemporary hotel sits on a clifftop overlooking Praia do Vale Covo and has a couple of beautiful outdoor pools. Think of sweeping views of the Atlantic Ocean from a dramatic section of coastline.

There are two great on-site restaurants at Tivoli Carvoeiro Algarve, including a special seafood restaurant inspired by Atlantic produce and flavors.

You can also enjoy onsite spa facilities, including an indoor swimming pool, steam room, sauna, and fitness center. Tivoli Carvoeiro Algarve’s facilities and incredible location really set it apart from the rest in Carvoeiro. If you want luxury accommodation, you can’t beat it.

Mid-Range: Castelo Guest House

Castelo Guest House is beautiful. This gorgeously-designed property resembles a castle and sits on a clifftop overlooking the ocean. Its location means guests enjoy sweeping views of the sea and nearby beaches; some guest rooms even feature private terraces.

If you choose to splurge (which we’d recommend), you can wake up and enjoy your coffee with a private terrace view. The guest rooms have ocean-themed decor, though, including blue feature walls and fish-themed backdrops. Castelo Guest House is full of personality; it’s exactly what you want from a mid-range hotel in Carvoeiro.

It doesn’t have an outdoor pool, but with a beautiful beach just 10 yards from its front door, this hotel really wins for its central location.

Budget: Colina da Lapa & Villas

Colina da Lapa & Villas is a little way out of the town center, but for this price, who cares? You can get a standard apartment for some of the lowest rates in Carvoeiro. You get a one-bedroom apartment with a spacious lounge and fully equipped kitchen—fantastic for sticking to a budget by avoiding eating out.

The decor is traditional, with terracotta-style tiles and abundant natural lighting. You’ll love the balcony seating area. You’ve also got all the handy amenities like a washing machine.

Colina da Lapa & Villas has a communal outdoor pool and a kid’s playground. Onsite bike hire is available for a quicker way to the town center.

2. Lagos: Culture-Focused Visitors

If you want a culture-focused trip, Lagos is where you should stay in the Algarve. This beautiful waterfront town has a historic old town, which is dramatically surrounded by a wall that dates back to the 16th century when Lagos needed protection from pirates. It’s got that “stories to tell and cobbles to walk” vibe. And you’ve got aesthetic (we’ll refrain from the word easy) steep wooden steps down to the beautiful beach of Praia do Camilo just outside the town center. It has history and beaches in equal measure – which sets it aside from other options in this guide.

If you want sightseeing and sunbathing, Lagos offers many more cultural attractions. You can walk through the white-painted buildings of the old town, visit the Castle of Lagos, and learn about Catholicism at the beautiful Igreja de Santo Antonio church.

In terms of location, Lagos sits in the far western Algarve. The town is surrounded by fishing village after fishing village, and most of the surrounding day trip regions are arid hills or coastal sea cliffs.

You can venture a little further to Parque Natural do Sudoeste Alentejano Costa Vicentina, which has more greenery and is as lush as Portugal’s hiking trails get. You can also day trip to hotspots like Albufeira relatively easily if you rent a car, taking around an hour one way. Lagos is a little further out of the way, but it is brilliant for any culture lovers.

Best Places to Stay in Lagos

Lagos is a gorgeous place to stay in the Algarve, and it offers quite a bit of variety. If you want historic surroundings and a really traditional environment and accommodation, you could stay in the old town. Alternatively, you could stay outside the old town, in its more funky downtown area, or near the residential suburbs of Ameijeria.

If you prefer to be close to the coast, you can stay in the southeastern region of the town, which has immediate access to Praia Dona Ana and Praia do Pinhao.

Luxury: Marina Club Lagos Resort

Marina Club Lagos Resort is a centrally located 4-star property in Lagos. As an aparthotel, it offers studios and three-bedroom apartments. Marina Club Lagos Resort is absolutely ideal if you want the luxury of a self-catered experience and the spaciousness of your own apartment in Portugal.

Each modernly decorated unit features its own balcony, maximizing your private outdoor space. The grounds are huge, too, with a communal garden and an outdoor swimming pool to enjoy and soak up a tan.

There’s a spa and restaurant onsite, available for guest use at a slight extra fee. Marina Club Lagos Resort is a great luxury option when choosing this Algarve town.

Mid-Range: Infante Guesthouse

Infante Guesthouse is an intimate mid-range accommodation choice right in the middle of Lagos. The guesthouse is only split over two floors, offering a mixture of five single and double rooms. If you prefer a smaller property and more personal stay, this is the place for you.

Each room has air conditioning, a TV, and an en suite bathroom with complimentary toiletries. For more flexibility, you can also book a room with a kitchenette if you feel like eating in.

The real highlight of Infante Guesthouse is its beautiful sun trap of a rooftop terrace, with scenic views of nearby beaches. Your closest is Batata Beach, sitting just 250 yards away. Intimate and brilliantly located, Infante Guesthouse is ideal on a mid-range budget.

Budget: Sol a Sol Hostel

Sol a Sol Hostel is a fun-loving youth hostel that welcomes guests from 18 to 50 years old. It is right in the middle of the town center, and he admits it’s a little noisy. It’s best suited to sociable butterflies and those wanting to party in Lagos.

You can book a private room with an en suite if you prefer privacy. You can also book a spot in a mixed or female-only dormitory.

The facilities at Sol a Sol Hostel include a BBQ area, a sun terrace, and a desk that organizes regular experiences like snorkeling tours. This budget-friendly property is great fun.

3. Albufeira: Nightlife and First-Time Visitors

If this is your first time visiting the Algarve, Albufeira is where you can stay in the Algarve region to let your hair down. It has two main neighborhoods: the old town and the strip. In the old town, you’ll get traditional white-painted buildings, cobbled streets, cute markets, and al fresco seafood restaurants. You’ve got clubs and bars along the strip – perfect for evening entertainment. You can see why Albufeira is so popular amongst visitors to the Algarve. It has a great balance and an exemplary tourist infrastructure.

In the town center itself, you’ve got a really cool escalator to the old town, Praia dos Pescadores, for inner-urban sunbathing and endless traditional plazas and shops. Albufeira really stays “alive” at all hours. You can always find somewhere to sit down and enjoy tasty food. Or historic architecture to admire. And while it lacks the culture of Lagos, it makes up for it with excellent access to sightseeing tours and day trips. Albufeira has plenty of guides available to shuttle you out to find more cultural or historic sightseeing opportunities.

You’ve really got a prime location when you choose to stay in Albufeira. You’ve got easy access to scenic beaches and day trips galore. You are right in the middle of the central Algarve, so nowhere is longer than 1.5 hours away by car. It’s a fantastic choice for first-timers visiting the region.

Best Places to Stay in Albufeira

Albufeira sprawls pretty large. You can stay along the strip, near or in the old town, or down by the coastline.

It’s up to you. We recommend choosing early, though, so you can book in advance without worrying about accommodation being sold out. Here are some of our favorites:

Luxury: Monicca Collection Suites & Residences

Monicca Collection Suites & Residences is a beautiful seafront aparthotel. This 4-star property is built in a striking pyramid shape and offers spacious private balconies for each apartment choice. You can select anything from studios to a deluxe two-bedroom suite that sleeps six adults. It’s a great choice if you’ve got a large group wanting luxury accommodation in Albufeira.

Each apartment has a kitchenette and a spacious living area. A daily continental breakfast and an onsite bar for coffee and cocktails are available.

When you aren’t sightseeing, you can also enjoy a large outdoor swimming pool and garden—perfect for a refreshing dip or building up your tan.

Mid-Range: Alisios Hotel

Alisios Hotel is a tight-knit, friendly hotel set almost directly on the beach. Perched on a grassy slope, you literally step out the front doors and take a few steps before hitting a sandy beach. Its location is to die for.

It wouldn’t make sense not to have a panoramic deck with this type of view, and Alisios Hotel’s deck doesn’t disappoint. The deck has a food service and an all-day bar if you don’t fancy walking into Albufeira. You’ve also got a heated saltwater pool, plus private balconies in each guest room. There are views at every corner of Alisios Hotel, which ironically caught our eye.

The old town is roughly 1km away, and you can rent bicycles onsite to make the journey a little smoother. It’s peacefully located, hugging the coastline and beaches rather than the dense sightseeing and party crowds. But you aren’t too far away that you can’t join them when you want to.

Budget: Musical Hostel

Musical Hostel has a mixture of casual dormitory rooms, all featuring bunk beds with privacy curtains as a thoughtful touch. It is basic but fantastic for those on a budget – something that’s reflected in its glowing reviews.

You get access to a shared kitchen, which is great for saving money in Albufeira. It’s also located smack bang in the middle of the town center. Being centrally located is valuable for sightseeing and even walking back to your hotel after a night on the strip. It’s comfortable being located close to all the main happenings.

As a nice twist, the Musical Hostel also has a hot tub, so bring a swimming costume!

4. Vilamoura: Golfing and Luxury Resorts

Vilamoura has the nickname of “Portugal’s Monaco”. This white-painted luxury resort town is where you’ll find peaceful golf courses and luxury resorts with a grand outdoor swimming pool and 5-star amenities. Vilamoura is your best bet if you want a luxurious stay in the Algarve. It has some of the fanciest resorts and best hotels, most of which come with access to at least one golf course and nearby beaches. It’s where to stay in Algarve if you have a taste for the finer things in life and prefer a more serene atmosphere.

Vilamoura’s flashy marina is the perfect backdrop for an evening stroll along the waterfront. You can also see Cerro da Vila, an archaeological museum containing the remains of a Roman villa. You’re also within a medium-length walk from the fishing village of Olhos de Agua, a working fishing village at the other end of Praia da Falesia. You’ve got a central location for sightseeing and day-tripping to places like Albufeira but a quiet base for those “at home” days. Vilamoura is a little bit hidden in plain sight.

You’re only a 30-minute drive from Faro and the major Faro Airport, making this a convenient place to stay on the Algarve coastline. Luxe and refined, Vilamoura is a lovely place for anyone seeking solace.

Best Places to stay in Vilamoura

Luxurious Vilamoura is ideal for anyone who likes a slower pace on holiday. It has plenty of greenspace thanks to its golf courses and easy access to a sandy beach or two. What more could you want?

Vilamoura definitely gets our vote for a luxury trip to the Algarve. Here are the best hotels you should consider:

Luxury: Four Seasons Vilamoura

Four Seasons Vilamoura doesn’t need much introduction. Everyone knows the Four Seasons chain, and this property doesn’t let it down. This resort has a lagoon-style pool and overlooks the Pinhal championship golf course. For avid golfers, the private entrance to this 18-hole course is a real luxury.

True to its resort approach, Four Seasons Vilamoura has plenty of onsite entertainment and restaurants. The buffet and a la carte dishes are available, and there is a well-stocked pool bar for cocktails on the loungers.

There’s a spa for guest use, including hot tubs and a sauna. And in terms of rooms, you can book anything from studios to two-bedroom apartments. All of the options come with kitchenettes, giving you that extra bit of flexibility.

Mid-Range: Dom Pedro Vilamoura

Dom Pedro Vilamoura is a gorgeous 4-star property just a couple of minutes away from Vilamoura’s marina. It offers easy access to all the hubs of activity that Vilamoura offers, with restaurants and bars right on your doorstep serving cocktails and seafood galore.

Within the property’s boundaries, you can access a private outdoor swimming pool. On the days you don’t feel like an outside dip, there’s a spa onsite with an indoor pool, gym, and jacuzzi.

The elegant guestrooms range from classic doubles to family room suites. Some even have private balconies and ocean views.

Budget: Conii Hostel & Suites

Conii Hostel & Suites is a fantastic place to stay just along the coastline in Vilamoura. Vilamoura isn’t known for its budget-friendly accommodation, so snap this one up with both hands. You can enjoy a mixture of dormitories and private rooms throughout the 1896 renovated property.

A communal kitchen area is a blessing when it comes to saving money on Vilamoura’s steep restaurant prices. You can also catch a daily breakfast here.

5. Faro:

Finally, we’ve got the gem of the eastern Algarve. Faro is the regional capital and where to stay in Algarve for serious sightseeing and access to quieter beaches in its offshore islands. Most tourists flock to centrally located destinations like Albufeira, bouncing straight out of Faro Airport into a taxi to accommodation further up the coastline. Whether you choose Faro or not, don’t make this mistake; it’s a great place to visit even for half a day.

You’ve got the Faro Marina, Igreja de Santa Maria, and the Regional Museum of the Algarve. There’s beautiful architecture, too, like the Arco da Vila and Igreja da Ordem Terceira de Nossa Senhora do Monte do Carmo. Faro’s a perfect storm of formal cultural attractions and aesthetic streets where you can just wander and admire the architecture at leisure.

That’s also all without addressing its stunning beaches. Because most tourists rush off to the beaches in the center of the Algarve, Faro’s beaches stay comparably quiet. You’ve got the beautiful expanse of Barrinha Beach, Praia de Faro Este, and Lighthouse Beach. All of these are located on barrier islands off the mainland, many of which are only accessible by boat shuttles. You’ve also got access to all the natural beauty of Parque Natural da Ria Formosa, where you can take kayaking tours and birdwatch.

Faro is the most major city in the Algarve and the largest hub in the east. Just an hour’s drive further east takes you to the Spanish border, passing smaller resort towns less frequented than those in the western Algarve. It feels a bit like the end of the road or the Algarve’s last real outpost.

Best Places to Stay in Faro

The city center is your main option when staying in Faro. In central Faro, you’ll find a rich selection of accommodation options, all within walking distance of the marina and main attractions.

Alternatively, you could stay on one of the more built-up islands like Culatra. This way, you have easier access to the nearby beaches while still just being a boat ride away from central Faro and its attractions. It all depends on what you prefer – beaches or sightseeing. For the sake of this section, though, we’ll give you the best hotels in central Faro.

Luxury: 3HB Faro

3HB Faro is a chic 5-star property just to the east of the city center. The hotel is set on a cobblestone street, and its exterior opens into a massive infinity pool overlooking the old town of Faro. Guests can enjoy al fresco dining and drinks on a dreamy rooftop terrace or slink back to spacious rooms for 24/7 room service.

Guestrooms range from standard twin rooms with a private bathroom to elaborate suites with added living space. The interior design is modern and warm, with yellow lighting and plenty of wooden tones.

As if all that wasn’t enough, 3HB Faro really comes into its own with its extra facilities. You get an indoor pool, spa area, and a gym to squeeze in a workout or two during your stay. It’s a luxurious base to call home when visiting Faro.

Mid-Range: Luxury Guest House_Opus One

Luxury Guest House_Opus One is beautiful. The guesthouse has a private outdoor pool, set serenely in a courtyard and lit by candles at night. Guests can also access a garden, shared lounge, and terrace to relax outdoors in the Algarve sunshine. It has an intimate feel and is much quieter than some major resorts further up the coastline.

Aside from all those facilities, you can also access a hammam and an onsite bar—perfect for socializing. The guestrooms range from standard double and twin rooms to suites with a spa bath on your private terrace. There’s plenty of range to suit either end of the mid-range budget spectrum.

Before you leave each morning, you can also choose between an a la carte or continental breakfast onsite. This property keeps everything comfortable and convenient.

Budget: Tilia Hostel

Yellow-painted Tilia Hostel just has such a feel-good vibe. You can choose from various dormitory rooms, each decorated with chunky wooden-cut bunk beds. There are mixed and female-only dorms, so you can pick whichever makes you feel most comfortable.

If you do want that extra privacy, you can reserve standard twin rooms and double rooms. Obviously, these have higher prices—plan for a more mid-range budget with private rooms.

With a shared kitchen onsite, you’ll be able to save tons on eating out. Just pick up some groceries and settle in for a chilled night.

FAQs: Visiting the Algarve

The Algarve coast is beautiful. You’ve got some of Europe’s best beaches at your fingertips and really striking orange cliffs, along which you’ll find plenty of hiking trails and sea cave attractions. In addition, the inland area is just as scenic, with white-washed cottages decorated with yellow or blue woodwork and products like carobs hanging from trees.

Whether you want a city break for a few days or a beach holiday for a week, it has a destination to suit you. But before you finalize your choice, what about some quick FAQs? You never know; these could just sway your decision.

What is the best area of the Algarve to stay in?

Albufeira is the best place to stay as a first-time visitor, as you can experience Benagil Cave and the beautiful old town.

What is the most beautiful part of the Algarve?

All of the Algarve is beautiful, but the central Algarve has the most impressive beaches, caves, and orange cliffs. The eastern Algarve has Ria Formosa Natural Reserve if you prefer green space, and the western Algarve is better for fishing villages and major towns.

Is Lagos or Albufeira better?

Lagos is a bit smaller, but it has more historical attractions and authenticity. Albufeira is larger and very geared towards tourism and nightlife, but it still has amazing attractions like Benagil and its traditional old town.

What is the most charming town in the Algarve?

Lagos is beautiful, and its historical attractions and stories give it a unique sense of charm. It’s a little bit quieter than other destinations like Albufeira; think of it as the pretty wallflower of the region.

Where Not to Stay in the Algarve

The Algarve is very safe in terms of crime level. As long as you take basic safety precautions, you won’t have any issues in any of the regions. However, there are some areas we’d recommend avoiding when it comes to where to stay in Algarve.

For a start, we’d steer away from choosing accommodation near any airports, especially Faro Airport, which is really distanced from anything else. You’ll get tons of noise pollution. And as a general rule, airports in the Algarve are set away from anything and everything they could disturb. This is great for the surrounding communities, but it means you don’t want to be booking accommodation with proximity to the airports in mind.

We suggest that you’re cautious about booking rural inland accommodation. Don’t get us wrong, there are so many beautiful rural villas to rent in the Algarve countryside. However, we recommend booking these if you feel comfortable renting a car, as public transport in these areas is severely limited. You should also have a good understanding of wildfire risks. Always have an evacuation plan and a basic understanding of how wildfires spread and how to stay safe in the event of one.

If you aren’t confident in car hire or managing wildfire risks, we’d suggest staying along the coast. There is plenty of transport and town center accommodation where you can walk everywhere.

Geography of the Region

To truly consolidate the Algarve regions, you must understand how this works together. What’s the layout of the Algarve?

Well, the Algarve sits on Portugal’s southern coastline, stretching horizontally and facing North Africa. It stretches from the Spanish border to a western tip marked by a rocky headland with a historic lighthouse.

In the western Algarve, you’ve got fishing towns and villages, as well as the main town of Lagos. It has plenty of rocky headlands and steep coastal cliffs and is perfect for a quiet holiday. In central Algarve, you’ve got Albufeira, the main hub of nightlife and organized tourism, and quieter towns like Vilamoura, famed for its golf courses and luxury resorts. The central area of the Algarve is the best choice if you’re a first-time visitor wanting an easy-to-navigate tourist infrastructure.

In the eastern Algarve, you’ve got the regional capital of Faro, with its major airport and coastal wetlands of its nature reserve. Further east towards the Spanish border, you’ve got smaller resort towns better suited to those who have already visited the Algarve a few times.

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As you can tell, deciding where to stay in Algarve really depends on what you enjoy doing. Do you want sightseeing tours and boat tours? Multiple resort swimming pools? Or a quiet outdoor swimming pool in the Portuguese countryside? Whatever you choose, we hope you have a fantastic time. If you need further information, check out our ultimate 3-day Algarve itinerary and guide on how expensive Portugal is to visit.