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Where to Stay in Algarve, Portugal – 8 Best Areas & Towns to Stay in the Algarve

The Algarve region in southern Portugal is one of the most popular destinations in the country, and rightly so. The 4,997 km squared region encompasses the whole Southern coast of Portugal, and part of the Western coast too.

From never ending white sand beaches to hidden coves surrounded by golden cliffs, the Algarve is home to stunning coastal landscapes. But being such a big region, how do you decide where to stay in the Algarve?

Each area and town in the Algarve has its own distinctive vibe, and is best suited for different types of travellers. If you’re looking for a quiet beach holiday, you don’t want to end up in the party town.

So if you’re looking for advice on the best places to stay in the Algarve, Portugal, you’ve come to the right place. In this Algarve accommodation guide I have outlined every area in the region, and who it’s best suited for.

I also included a few accommodation options for every budget. Whether you’re looking for a fun surfing holiday or a relaxing family vacation, I’m sure there is something in this Algarve hotel guide for you.

Without further ado, let’s read on and discover the best areas to stay in Algarve, for every traveller style and budget!

Enjoying the view over Ponta da Piedade in the Algarve, Portugal

Enjoying the view over Ponta da Piedade in the Algarve, Portugal

Best areas to stay in the Algarve at a glance

The Algarve region of Portugal is as varied as it is wide. You could stay anywhere in the Algarve and have a great time, but you want to be sure you’re staying in the right area for your travel style.

Here are all the areas to stay in Algarve for every travel style.

SagresIf you want to surf in the Algarve, Sagres is the place to be. It’s a small town with a very laid back vibe, nice bars and restaurants, and a short drive away from all the best surf beaches.

LagosThe perfect place to stay for first-timers. It’s conveniently positioned close to all the main attractions in the Algarve, making it a great place to base yourself.

AlbufeiraThe party town in Algarve, with lots of affordable hostels, bars and restaurants.

FaroThe capital of the Algarve and biggest city, it’s within easy driving distance to many attractions, plus offers a lively city vibe.

TaviraA small medieval town with an old town centre and gorgeous beaches on its doorstep. Perfect for a relaxed beach holiday.

QuarteiraA romantic small town with pretty beaches and a laid back vibe, perfect for couples.

CarvoeiroThe perfect town to stay in the Algarve for a family beach holiday. A beautiful beach on its doorstep, close to many attractions, plenty of amenities in town and a friendly atmosphere.

PortimaoIf you want to pair a beach holiday with some trendy shopping, Portimao is the place to stay.

View over Praia de Dona Ana in the Algarve, Portugal

View over Praia de Dona Ana in the Algarve, Portugal

Sagres – Best Area to Stay in Algarve for a Surf Holiday

What is an Algarve itinerary without a little bit of surfing? Located close to tons of beaches with plenty of surf spots, Sagres is the perfect place to stay in the Algarve for people who want to surf.

The town itself has a laid back and chill vibe, with lots of cute bars, restaurants and local artesan shops. The beaches are very scenic, with cliffs that tower above sparkling, turquoise seas, making this a fitting destination for surfers.  

Tourists can also discover wonderful locations like Praia de Mareta, or Cabo de Sao Vicente, a lighthouse perched on top of dramatic cliffs, which make it a stunning sunset spot.

Surfing equipment can easily be hired at pretty much any of the main surfing beaches, which makes this spot great for both the novice and expert surfers.

Search for your perfect accommodation in Sagres here!

The cliffs of Cabo de Sao Vincente at sunset

The cliffs of Cabo de Sao Vincente at sunset

Praia do Amado in Portugal

Praia do Amado in Portugal, one of the surfing beaches close to Sagres

Here are some accommodation options in Sagres for every budget.

Budget: The Lighthouse Hostel – This is where I stayed for two nights. This friendly hostel has a vibrant and spacious communal area, with fantastic views of the garden and pool. It’s a lovely location for a relaxed and friendly vibe, especially for the young at heart.

Click here to book your stay at The Lighthouse Hostel!

Mid-Range: Pousada de Sagres – This charming hotel is a quick 5-minute walk from the beach. You’ll be delighted with views of the Lighthouse of Cabo de São Vicente and the Sagres Fortress. It’s perfect for mature couples or anyone who loves to surf.

Click here to book your stay at Pousada de Sagres!

Luxury: Martinhal Sagres Beach Resort – This resort caters to families with something for everyone. And for those seeking a blissful getaway, there are a few accommodation options perfect for singles and couples as well. This excellent resort is also right around the corner from stunning beaches. And for the budding surfers, you will have plenty of opportunities to take up surf lessons.

Click here to book your stay at Martinhal Sagres Beach Resort!

The pool and garden of The Lighthouse Hostel in Sagres - a great place to stay in Algarve for surfers

The pool and garden of The Lighthouse Hostel in Sagres

Lagos – Best Places to Stay in Algarve for First-Timers

If it’s your first time visiting this part of Portugal, figuring out Algarve, where to stay and what sights to see, can be quite tricky. Luckily, Lagos is easily one of the most-visited locations in Portugal’s Algarve.

Thanks to the iconic beaches, character-filled surroundings, rich heritage, and great tourist facilities, this area welcomes first-time travellers with open arms.

The level of tourism in Lagos makes it an easy place to feel welcomed and at ease, especially if this is your first trip abroad. The town itself is characterised by the usual cobbled streets and white houses, lined with bars and restaurants.

It offers all the amenities you might need, while also being strategically close to many of the most famous beaches and attractions of the Algarve, so that you don’t have to travel too far.

The heavy tourist presence can sometimes detract from an authentic Portuguese experience, but luckily it’s just a day trip away from places like Olhao or Tavira, which are much more traditional.

Click here to search for your perfect accommodation in Lagos!

Exploring the old town centre of Lagos in Portugal - the best town to stay in Algarve for first timers

Exploring the old town centre of Lagos in Portugal

Praia do Camilo in the Algarve, Portugal

Praia do Camilo in the Algarve, Portugal – one of the beaches close to Lagos

I listed below some options of accommodation in Lagos for every budget.

Budget: TopCity Hostel and Suites – I stayed at Top city Hostel and Suites, and the rooftop and pool views were really cool. However, this hostel may be best suited for younger travellers as there is a heavy party vibe here.

Click here to book your stay at TopCity Hostel and Suites!

Mid-Range: Villas D. Dinis – This adults-only guest house is right near the beach and other amazing sights like the Lagos castle, Fortress and beautiful churches. The Villa also has private patios, exotic gardens and a swimming pool for guests to enjoy.

Check out prices and availability at Villas D. Dinis here!

Luxury: Palmares Beach House Hotel – This hotel is a great fit for first-time travellers or guests that do not want to lift a finger on vacation – except maybe to hike around the gorgeous area. At the Palmares, you can enjoy Mediterranean food at the on-site restaurant or seek out freshly caught fish at one of the region’s many restaurants.

Click here to book your stay at Palmares Beach House Hotel!

The rooftop pool at Topcity Hostel & Suites in Lagos

The rooftop pool at Topcity Hostel & Suites in Lagos

Albufeira – Best Places to Stay in Algarve, Portugal for Nightlife

While some people may prefer to hike or cycle, others may agree that a good night out is just as vital to staying fit while travelling. I would recommend Albufeira for a joyous time dancing the night away.

This coastal city is perfect for letting your hair down, whether you’re experiencing the nightlife or simply cruising along the promenade and sandy beaches.

Albufeira is characterised by its old town with white houses and cobbled streets perched on the hill high above the beach, and the modern strip located below next to the sea. It also has a huge beach just on its doorstep.

After a night out at one of the many beach bars on the promenade you can spend the next day relaxing on the huge beach, exploring the cute streets of the old town above or taking a day trip to one of the famous locations nearby,

Click here to find your perfect accommodation in Albufeira!

Praia dos Pescadores in front of Albufeira city centre, with Albufeira old town behind it

Praia dos Pescadores in front of Albufeira city centre, with Albufeira old town behind it

Here are some suggestions for fun places to stay in Albufeira for every budget.

Budget: ​​Sunfield Guest House – This guest house is ideally located for a night of dancing, especially with a free shuttle service to get you to and from your favourite attractions. Sunfield is also close to The Strip, Albufeira shopping centre, and a few beaches.

Click here to see prices and availability at Sunfield Guest House!

Mid-Range: Vila Recife Hotel – This hotel is ideal for when the party needs to come to you. It has a games room, garden-side bar, and pool area. The staff is also very friendly and will help you make arrangements to move around the town safely.  

Click here to book your stay at Vila Recife Hotel!

Luxury: Epic Sana Algarve Hotel – This beachfront hotel is elegantly decorated, with bright, open spaces and colourful views from the private balconies. You can enjoy the spa, pools, restaurants, and so much more, right on the shores of Falésia Beach.

Book your stay at Epic Sana Algarve Hotel here!

Exploring the streets of Albufeira Old Town - a great place to stay in Algarve for party goers

Exploring the streets of Albufeira Old Town

Faro – Best Place to Stay in Algarve for City Life

In the Algarve region, Faro is perfect for city living. The exceptional character, colour and cobbled streets of Faro will steal a piece of your heart.

It’s not as big as Lisbon, Porto or Sintra, the main cities in Portugal, but it’s characterised by a strong city vibe. That’s not to say it doesn’t offer easy access to gorgeous beaches and natural attractions.

If you’re looking for sandy beaches and unique attractions like walls decorated with bones, Faro is the perfect place to stay.

Visit the Capela Dos Ossos or the Ilha Deserta before spending your days entrenched in the city’s quaint cobbled streets or discovering wildlife at the Natural Park.

Check out all the best places to stay in Faro!

Sunset in Faro Marina, Portugal - the place to stay in Algarve for city life

Sunset in Faro Marina, Portugal

I listed below where I stayed in Faro, and some other suggestions for other budgets.

Budget: Hostellicious – In my personal experience, this hostel is one of the best places Algarve has on offer for budget travellers. It can get a bit loud, but it’s perfect for the young, spirited traveller.

Click here to book your stay at Hostellicious!

Mid-Range: Sunlight House This gorgeous house offers amazing terrace views with bright decor and a great variety of rooms and restaurants to choose from. Guests can socialise in the living room or enjoy one of the many activities available in the surrounding area.

Check out prices and availability at Sunlight House here!

Luxury: AP Eva Senses – This luxury hotel is located right in the city centre. The spacious rooms make for a great location whether you’re visiting for business or pleasure. For the ultimate relaxation, you can enjoy the spa or a cocktail on your balcony overlooking the Ria Formosa Natural Park.

Click here to book your stay at AP Eva Senses!

Exploring Arco da Vila in Faro, Portugal

Exploring Arco da Vila in Faro, Portugal

Tavira – Best Areas to Stay, Algarve, Portugal, for a Quiet Beach Holiday

Tavira is one of Algarve’s best places to enjoy some tranquillity.

While most people will mention Carvoeiro, we’ve chosen Tavira based on its beaches, churches, and the Gilão River. This city boasts protected waterways and untouched countryside.

This area attracts fewer tourists than any other part of the Algarve region, which makes for a spectacularly serene stay.

You can relax on the beach and catch up on your favourite book or experience the cultural attractions on your way back to the hotel. The town itself is really cute, characterised by the recognisable Portuguese white houses and cobbled streets.

Click here to find your perfect place to stay in Tavira!

Exploring Tavira in the Algarve by tuk-tuk

Exploring Tavira in the Algarve by tuk-tuk

Rooftop views in Tavira, Portugal - a lovely town to stay in Algarve for a quiet beach holiday

Rooftop views in Tavira, Portugal

Here are some great places to stay in Tavira for every budget.

Budget: Bea’s Bed & Breakfast – This bed and breakfast has uniquely decorated rooms with earthy tones and bright colours. The modern rooms are fully equipped with everything you will need for a quiet holiday, just a few kilometres away from the beach.

Check out prices and availability at Bea’s Bed & Breakfast!

Mid-Range: Quintinha da Foz Guest House – This elegant guest house is perfect for solo travellers or couples. The pet-friendly property is within walking distance from the city centre with beaches and natural attractions around the corner.

Click here to book your stay at Quintinha da Foz Guest House!

Luxury: AP Maria Nova Lounge – Deciding which resort in Algarve is best will be easy after checking out this stunning luxury lodging. This beautiful Lounge is situated in the quiet hillside and features modern rooms with exclusive balconies.

Click here to see prices and availability at AP Maria Nova Lounge!

Igreja do Santa Maria do Castelo in Tavira, Portugal

Igreja do Santa Maria do Castelo in Tavira, Portugal

Quarteira – Best Place to Stay in Algarve, Portugal for Couples

This region is particularly popular with Portuguese tourists and is considered the first resort town within the greater Algarve region. This makes it a wonderful spot for couples looking to enjoy an authentic Portuguese experience.

Quarteira is very popular also out of season, and you will find many travellers searching for that tranquil European winter sun experience.

Since it is a local treasure, travellers can expect reasonable prices even throughout the peak season. The multitude of great restaurants, boat tours, and dolphin watching makes this the perfect spot for you and your better half.

Find the perfect place to stay in Quarteira for you and your better half here!

Admiring the rock formations and boats cruising at Ponta da Piedade

Admiring the rock formations and boats cruising at Ponta da Piedade

Here are my suggestions for where to stay in Quarteira!

Budget: Hostel Conii & Suites Algarve – This hostel is perfect for budget-conscious travellers. It is especially great for couples who love to meet new people and partake in activities like golfing or bike rides around the area.  

Click here to book your stay at Hostel Conii & Suites Algarve!

Mid-Range: Zodiaco Hotel – This brightly coloured hotel offers an outdoor pool, billiards table as well as easy access to the beach, just 10 minutes away. Couples can enjoy horse-riding, refreshing drinks, and delicious local cuisine at the surrounding restaurants.

Click here to book your stay at Zodiaco Hotel!

Luxury: Dom Jose Beach Hotel – As far as Algarve’s beach resorts go, this is an ideal spot for luxury honeymoons or just some special time with your significant other. This hotel boasts a private beach, massage services, and amazing views of the Atlantic Ocean.

Check out prices and availability at Dom Jose Beach Hotel here!

The golden cliffs and coastline of Ponta da Piedade

The golden cliffs and coastline of Ponta da Piedade

The stunning views of Ponta da Piedade, Portugal

The stunning views of Ponta da Piedade, Portugal

Carvoeiro – Best Place in Algarve, Portugal, for Families

This region has some of the best beaches in the Algarve area, and the serenity you can find here makes this a double winner.

With its iconic white houses perched right above the beach, Carvoeiro is, in my opinion, one of the prettiest towns in Portugal.

On the one hand, Carvoeiro is a special place for calming beach holidays, but the amount of fun activities here also makes this a wonderland for the kids.

This best of both worlds town offers hiking trails, boat tours, and a few theme parks as well. Take a trip to the famous Benagil cave, enjoy the beautiful Praia do Carvoeiro beach, or take a trip to Slide and Splash water park.

Families will most enjoy Carvoeiro during the summer season.

Click here to find the perfect hotel for your family in Carvoeiro!

View over the beach and town of Carvoeiro in the Algarve, Portugal

View over the beach and town of Carvoeiro in the Algarve, Portugal

I listed below some family friendly accommodation options in Carvoeiro below.

Budget: Pestana Palm Gardens – These townhouses are fully furnished. The warm and sunny decor make these country-style houses a wonderful place for kids. Families can enjoy tennis courts, sports and two swimming pools.

Click here to find the best deals and dates at Pestana Palm Gardens!

Mid-Range: Monte Santo Resort – This resort is perfect for bigger families, with secluded areas and private security to keep you and your family safe. It also features a Kids’ Club to entertain the younger ones (so that you can enjoy a stress-free massage).

Click here to book your stay at Monte Santo Resort!

Luxury: Tivoli Carvoeiro – This exceptional hotel boasts views of Vale Covo, making this 5-star hotel a perfect fit for energetic families. The Tivoli offers professional childminders that offer a range of activities for kids.

Book your stay at Tivoli Carvoeiro here!

Me in Benagil Cave at 7:30AM

Exploring Benagil Cave – a famous sea cave close to Carvoeiro

Portimao – Best Place in Algarve for Shopping

While this region is best known for the popular beach of Praia da Rocha, the city boasts beautiful architecture and a great history. You can see beautiful historic locations like the catholic church of Igreja Matriz de Portimão.

But, the region is best known for the plethora of markets and shops that line streets like Diogo Tomé and Portades da São João. Besides the fantastic retail outlets, you can also indulge in freshly caught fish.  

Portimao is a great place to stay in the Algarve if you want to combine your iconic beach holiday with a little shopping spree.

Click here to find the perfect place to stay in Portimao!

Walking down the famous wooden stairwell of Praia do Camilo in Portugal

Walking down the famous wooden stairwell of Praia do Camilo in Portugal

Whatever budget you’re looking at for your Portimao accommodation, I have some options for you below.

Budget: Algarve Race Resort – If the shopping is for her, the race resort is most certainly for him. The resort is located 23km away from the city centre and is within close range to the various international circuits in Portimao. The comfortable self-catering apartments are a great snag for guests looking to stay outside the major city.

Click here to see prices and availability at Algarve Race Resort!

Mid-Range: Morgado Golf and Country Club – This hotel is excellent for anyone looking to break up their shopping trip with a few putts during the day. It is surrounded by golf courses and is fully kitted with outdoor pools, breakfast buffet and restaurants which makes this as entertaining as the city it is located in.

Click here to book your stay at Morgado Golf and Country Club!

Luxury: Bela Vista Hotel & Spa – Relais & Chateaux – Nothing quite pairs with shopping like a relaxing spa day in a fabulous 5-star boutique hotel. This lodging offers al fresco dining with traditional Algarve food. The new marina is just 800m away from this beautiful building sitting atop the cliffs of Praia da Rocha.  

Click here to see the best deals at Bela Vista Hotel & Spa – Relais & Chateaux!

View over the beach and town of Carvoeiro in the Algarve, Portugal

View over the beach and town of Carvoeiro in the Algarve, Portugal

Final Thoughts on where to stay in Algarve, Portugal

There you have it, the ultimate guide on where to stay in the Algarve, Portugal! Have you stayed in a different area or town of the Algarve? How did you find it? Let me know in the comments below!

I was lucky enough to spend a large chunk of my Portugal itinerary in the Algarve. I personally stayed at quite a few of the hotels and hostels I suggested, and have visited all these beautiful towns.

The Algarve is a stunning region, and it’s easy to see why it features in so many Europe bucket lists. To make your Algarve vacation all the more special, make sure to choose the best area to stay for your travel style and budget.

I hope you find my guide useful in deciding what area of the Algarve to stay in. If you have any questions, just let me know in the comments below!

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Photo collage of Carvoeiro Beach, Praia de Dona Ana, a blonde girl standing in Benagil Cave and a blonde girl standing in front of the Ponta da Piedade cliffs with text overlay saying "Where to stay in Algarve, Portugal"

Photo collage of the cliffs of Ponta da Piedade and the view of Carvoeiro beach with text overlay saying "8 best places to stay in Algarve"