Where to stay in Algarve Portugal 2021: Algarve towns compared

Out of all popular places to visit in Portugal, the southern Algarve region maintains its reputation as one of the most beloved holiday destinations in Europe. The fact that it’s home to some of the best beaches in Portugal definitely adds to the Algarve’s attraction but that’s not its only charm. Historic cities, spectacular hikes, intriguing castles, thrilling surfs, top-rated golf courses, creepy chapels, towering cliffs and mouth-watering dishes, you’ll find them in the Algarve. With so many interesting must-sees and must-do’s in this vast region, it can be confusing to pick out the best place to stay in Algarve.

Finding that perfect travel base not only depends on the Portugal itinerary of your choice but also on your personal interest and your travel type. In order for you to actually keep your cool, we’ll save you the trouble of figuring out where to stay in Algarve. This also includes some hand-picked accommodation suggestions, from the most stylish boutique hotels to the most unique vacation rentals in the Algarve. The only thing left for you to do, is to pack your bags for an unforgettable beach vacation.


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In a nutshell: Our top suggestions on the best places to stay in Algarve

Best towns in Algarve

By activity

Best place to stay in Algarve for sightseeing
Faro and Lagos
Faro rental: Stylish townhouse with pool
Lagos boutique hotel: Casa Mãe

Best place to stay in Algarve for beach-bumming
Armação de Pêra and Vale do Lobo
Armação de Pêra resort: Vilalara Thalassa Resort
Vale de Lobo rental: Beach house

Best place to stay in Algarve for hiking
Costa Vicentina
Gorgeous resort: Monte da Vilarinha
Rental: Glamping resort

Best place to stay in Algarve for golfing
Vilamoura
Rental home: Lovely villa next to the golf course

Best place to stay in Algarve for surfing
Sagres and the Costa Vicentina
Costa Vicentina villa: Arrifana beach villa

Our favorite places to stay in Algarve
Lagos, Vilamoura and Costa Vicentina
Vilamoura resort: Anantara Vilamoura
Lagos villa: Beach view luxury villa
Costa Vicentina villa: Arrifana beach villa

Map of the best towns in the Algarve

This Algarve map indicates all the best places to stay in Algarve as mentioned in this article.

The Algarve, Portugal’s southernmost region, covers an area of about 5 000 km2 (or 1,930 mi2) and boasts no less than 200 km (or 125 mi) of Atlantic coastline. The main resort towns in Algarve are divided into 3 categories:

  • Eastern Algarve, home to cities Olhão and Tavira as well as the Ria Formosa Natural Park. Think deserted islands, laid-back Algarve towns and a rural vibe.
  • Central Algarve, the region’s most popular stretch of coast and home to cities Faro and Albufeira and the sophisticated Algarve towns of Vilamoura, Almancil, Vale do Lobo and Quinta do Lago which form the Golden Triangle. The outstanding Benagil cave is just a short boat or kayak ride away. The only international airport in southern Portugal is located in culture-packed Faro, making this charming Algarve town the gateway to this spectacular coastal region.
  • Western Algarve, home to cities Lagos, Portimão, Alvor, Sagres and Aljezur, the charming Ferragudo and Carvoeiro fishing villages. as well as the Southwest Alentejo and Vicentine Coast Natural Park and the Monchique mountains. The Algarve beaches and rock formations of its southern coastline are truly spectacular. The south-west coast or Costa Vicentina offers a completely different experience with colorful wildflowers, a variety of birds and some of the coolest surfer towns in the Algarve.

Renting a car in Algarve is advisable, especially if you plan on taking some day trips from Lagos to explore the wider area. Rental cars come pretty cheap in Portugal, just do in take into account that you’ll be paying toll when driving in Portugal. We tend to find the best car rental deals on Rentalcars.com

Now that you know the lay of the land, it’s time to explore each of the Algarve towns mentioned in further detail. Here are our recommendations of the best places to stay in Algarve by travel type and interest as well as our personal suggestions for accommodation in Algarve.

Where to stay in Algarve by travel type

Best place to stay in Algarve for couples

Are you looking to spend some quality time with your loved one? Then you’ll be delighted to learn that the Algarve is more than just a family travel destination. These are plenty of more secluded locations in the Algarve that are perfect for couples.

The Tavira area is our suggestion on where to stay in Algarve for couples

Especially the coastal Algarve towns of Olhão or Tavira are perfect for a tête-à-tête. Go for long beach walks in the Ria Formosa Natural Park, a romantic picnic on one of the Deserted Islands (Ilhas Desertas), a stroll through Olhão’s old medina barrio or a scenic bike tour to the Moinhos da Rocha (Pego do Inferno) waterfall. No fancy resorts here but small and intimate retreats. Here’s our selection of the most wonderful places to stay in Algarve’s eastern corner:

This tree house is one of the most unique places where to stay in Portugal
Image courtesy of Conversas de Alpendre

Our personal favorite? This romantic luxury tree house at the intimate Conversas de Alpendre in Vila Real de Santo António. Other accommodations include suites and a brand new cabin with private pool.

BOOK HERE on Booking.com

With the many romantic hotels in the area, Carvoeiro and Ferragudo are some of the best Algarve towns for couples

But you’re also spoiled with choice if you prefer a classy resort in the livelier part of the Algarve. Spend the day exploring the fishing villages of Carvoeiro and Ferragudo, discovering the spectacular Benagil Cave, enjoying a scenic cliff hike to the Senhora da Rocha chapel and watching the world go by from a shaded terrace in Portimão. These romantic Algarve hotels and resorts are perfectly located for you to alternate cocooning with sightseeing in the nearby cities:

If you're looking where to stay in Algarve without a car then consider this amazing penthouse, located just a minute walk from Carvoeiro beach
Image courtesy of VRBO The Beachhouse

If you prefer the privacy of your own place, then this gorgeous penthouse might be exactly what you’re looking for. The spacious terrace and inviting jacuzzi overlooking Carvoeiros picturesque beach are the perfect place to spend a romantic evening.

BOOK HERE on VRBO

Best place to stay in Algarve for families

Little girl with flower hat overlooking her Algarve accommodation with outdoor swimming pool

Algarve is one of Europe’s most beloved family travel destinations. And with good reason, thanks to its sunny and mild climate, gorgeous beaches, convivial cities, welcoming locals and… its excellent family-friendly resorts. We stayed in the Algarve with our kids on several occasions and found Vilamoura, Alvor and Lagos to offer the most child-friendly setting. You’ll find miniature golf, water parks, tourist trains, quaint ice-cream shops and a wide selection of water activities. These are our favorite child-friendly Algarve resorts:

This rental villa with pool is the perfect retreat for holidays to the Algarve with kids
Image courtesy of VRBO Casa da Calma

Looking for a family-friendly house rental in Algarve? Then check out this gorgeous family-friendly villa in Vale do Lobo. It’s set amidst a large garden, comes with a gorgeous pool (which can be heated on request) and is located near the beach.

Little girls drinking a cocktail in the Pestana Blue hotel in Alvor, probably the best area to stay in Algarve for families

But the Algarve’s other, quieter regions have plenty to offer as well. Why not spend your family holidays away from the crowds, in a fabulous hotel that goes above and beyond for even the littlest of guests. Your family will feel right at home in these family-friendly Algarve resorts:

One of the most picturesque hotels Algarve can be found in Olhao
Image courtesy of Conversas de Alpendre

Our pick would be Conversas de Alpendre. The stylish rural retreat operates as a small hotel and, in addition to the treehouse, also offers suites, a family apartment, and a gorgeous little cabin with its own private pool.

BOOK HERE on Booking.com

One place not to consider for your family vacation is Albufeira. We even regret heading there for what was supposed to be a lovely afternoon… which we ended up spending in Carvoeiro instead. Continue reading to find out why. There is, however, one family-friendly resort that does give some luster to Albufeira and that’s the Epic Sana Algarve. Combine a stay in this hotel with some excursions in nearby fishing villages – close to Albufeira yet worlds apart in terms of atmosphere – and you’ll have an epic family holiday.

Terrace of a beachfront accommodation Algarve - Portugal
Image courtesy of VRBO Sandra Lazaro

This gorgeous beachfront house could also work. An unbeatable location, airconditioning through-out and 3 bedrooms make this the perfect holiday home for families.

Best place to stay in Algarve for active travelers

The Vicentina Coast is one of the Algarve best places to stay for active travelers

Remember the Algarve’s wild side? The Southwest Alentejo and Vicentine Coast Natural Park offers a sublime setting for active travelers. No beach resorts here, rather boutique retreats that blend in perfectly with the spectacular environment. This area is known for its excellent surfing conditions, scenic hiking trails, deserted beaches, downhill mountain biking, colorful wildflowers and unique wildlife. The Natural Park stretches out from Sagres in the south and even crosses the Algarve – Alentejo border in the north. It’s home to several gorgeous white-washed villages such as Aljezur and Odeceixe. These are our top-picks:

White modern villa with pool overlooking one of the best beaches in Algarve

The luxurious Arrifana Beach Villa, with its private pool and jacuzzi, is located right next to one of the best surfing beaches in Portugal.

BOOK HERE on Booking.com

Best place to stay in Algarve for jet-setters

If you're wondering where to go in Algarve for some exclusivity then Vilamoura with its fancy marina is an excellent choice

The Golden Triangle sounds like music to your ears? Then the area where you’ll want to stay at evolves around the Algarve’s liveliest resort town of Vilamoura and Almancil, including the renowned gated communities of Vale do Lobo and Quinta do Lago. The Golden Triangle features palm-fringed lanes, sparkling yachts anchored in the Vilamoura marina and the towering cliffs of Falesia beach. It’s dotted with luxury hotels, high-end villas and four Michelin starred Algarve restaurants (Gusto, Henrique Leis, São Gabriel and Willie’s). Of the many luxury hotels and resorts in the Golden Triangle, here are our recommendations:

Luxury accommodation in the Algarve in Vilamora
Image courtesy of VRBO SAPvillas

Or how about this luxurious 5-bedroom villa with private pool on the outskirts of Vilamoura? A tranquil setting yet at walking distance from the Marina and Falesia beach.

Best place to stay in Algarve for eco-lovers

Tavira and the Deserted Islands are one of the best places to stay in Algarve Portugal

If a pure and natural retreat in a pristine environment is what you’re looking for, then an escape towards the outer corners of the Algarve is your winning strategy.
The area around Tavira offers plenty of natural delights, from uninhabited islands to lagoons and marches in the Ria Formosa natural reserve. It’s an area that’s free of high-rise, instead dotted with warm and inviting small-scale retreats that are in line with the environment. Here are an eco-lover’s best places to stay in the Algarve region around Tavira and Olhão:

  • Agroturismo Quinta dos Perfumes amidst an orange grove, featuring a salt water outdoor swimming pool and biological garden.
  • Ecological floating homes such as the well-equipped Barco Casa Fuzeta or Casas da Ria houseboats in the heart of the Ria Formosa Nature Park.
Boat anchored in the remote Ria Formosa location Algarve
Image courtesy of VRBO Mulubinba SeaHouse

Our personal pick would be the Mulibinba SeaHouse, anchored in paradise and bathed by the unique waters of Ria Formosa.

If you prefer a destination near a livelier Algarve town, then the Casa Vale Da Lama Eco Resort in Odiaxere might check your sustainable boxes. It’s located inland yet close enough to Lagos to enjoy the best of both worlds.

Best place to stay in Algarve for party people

Albufeira is the place to be to dance the night away, especially at The Strip in the Montechoro district. But, that’s about it. It was the only Algarve town that disappointed us when exploring southern Portugal. We were aware of its reputation as the party capital of the Algarve but still expected to find some local charm during the day. Albufeira is home to some beautiful beaches nearby and enjoys a privileged location in the heart of the Algarve’s south coast, after all. So setting-wise, this is a lovely Algarve city. But the overload of cheap souvenir shops, tacky bars and daytime drunks kind of ruined the experience for us. Then again, we’re not the city’s target audience either. If pub crawls, karaoke and dance clubs are what you’re after, then you’ll find them in Albufeira. Just don’t expect the fanciest party scene.

This Albufeira houseboat is among the best places to stay Algarve Portugal holidays
Image courtesy of The Homeboat Company

Looking to stay as close as you can to the beaches and nightlife of Albufeira? Then check out this super-original and well-appointed houseboat.

BOOK HERE on Booking.com

If you’re looking for an alternative with a lively party scene that does have more to offer on the side, then Praia da Rocha is a good choice. Spot 3 and NoSoloÁgua are said to be the places to be. The Caniço Club near Alvor enjoys quite the reputation too. And also Vilamoura offers plenty of nightlife, as well as a casino.

Trendy apartment in Vilamoura Portugal Algarve
Image courtesy of VRBO JOY Style by Elena

Looking for a classy apartment close to the action? This stylish hideout enjoys a location at the Vilamoura Marine with plenty of restaurants, cafes and a gorgeous beach at your doorstep.

Best places to stay in Algarve by activities

Where to stay in Algarve for sightseeing

The two main cities in Algarve are Faro, the region’s capital, and Lagos, the region’s former capital. Both are incredibly charming and are home to some of the top tourist attractions in the Algarve. We dedicated an entire post to both Lagos and the Faro. Here’s where to stay in the Algarve’s main cities:

Apartment in Lagos Portugal with views over the cobbled streets and cultural landmarks
Image courtesy of VRBO Rental Valley

Or how about this fabulous top-floor apartment? The terrace overlooking the Lagos rooftops is a wonderful place to spend the evening.

BOOK HERE on VRBO

Where to stay in Algarve for beach bumming

Carvoeiro and Lagos are where to stay in Algarve if you like beaches

With such a stretch of coastline, the region is home to some of the best beaches in Portugal. The – in our opinion – most interesting and picturesque Algarve beaches are located near Carvoeiro, Lagos and in the Southwest Alentejo and Vicentine Coast Natural Park. These form the perfect travel base to go beach-hopping in Algarve. Here are some of the best beach hotels and resorts to do so:

Terrace and living room views of a vacation rental just steps away from the sandy beaches of Vale do Lobo
Image courtesy of VRBO Villa V1 Vale do Lobo

Stylish villa in the Golden Triangle just steps away from Vale do Lobo beach, about halfway between Faro and Vilamoura.

Rental villa with pool in Carvoeiro
Image courtesy of VRBO Vale Centeanes Villa

Gorgeous villa with private pool and within walking distance of splendid Vale Centeanes beach and Marinha beach.

BOOK HERE on VRBO

Authentic Portuguese home for rent in Benagil
Image courtesy of VRBO IPC Management

Cliff-perched bungalow with an amazing authentic decor and overlooking Benagil beach.

BOOK HERE on VRBO

White rental home with garden west of Lagos Portugal
Image courtesy of Casa Oliveira

Tastefully appointed villa with plunge pool near Salema beach, about halfway between Lagos and Sagres.

Where to stay in Algarve for golfing

The Golden Triangle is the best place to stay in Algarve Portugal for golfers
Source: Dom Pedro Hotels & Golf Collection (CC BY-SA 3.0)

The Algarve is one of Europe’s leading golf destinations and the courses are open year-round. Most renowned are the golf courses in the Golden Triangle, dominated by Dom Pedro Golf in Vilamoura with the Victoria, Old, Millennium Golf Course, Laguna and Pinhal golf courses. Also Quinta do Lago and Vale do Lobo are a golfer’s paradise thanks to their ocean views. Then there’s the Monte Rei Golf and Country Club, tucked away in the hills between Tavira and the Spanish border. Other gems are located in the western Algarve, such as the Espiche golf course, the Sir Henry Thomas Cotton Championship Course (Penina) and the Onyria Palmares golf courses in the Lagos – Portimão area. Some of the best places to stay in Algarve for golfers are:

Terrace and garden views of a spacious Vilamoura villa with 4 rooms
Image courtesy of L’Orangerie by SAPvillas

Check-out this wonderful 4-bedroom semi-detached villa L’Orangerie. It’s located right next to the Vitória and Laguna golf courses and within walking distance from Falésia beach and the Vilamoura marina.

Where to stay in Algarve for hiking

That’s a no-brainer, since the Southwest Alentejo and Vicentine Coast Natural Park is home to the Rota Vicentina network of trails. It’s a hikers paradise with unpaved roads, green hills, endless beaches and plenty of wildflowers. And why not alternate you hiking adventures with other outdoor activities such as cycling or horse-riding? This is where to stay in Algarve’s hiking paradise:

  • Monte da Vilarinha near the gorgeous Bordeira beach, where you’ll find pristine Portugal at its best.
  • Monte do Cardal near Odeceixe beach, another spectacular natural setting.
Glamping tent in a verdant setting of the Portuguese Algarve
Image courtesy of Quinta Alma

Glamping resort Quinta Alma where the luxurious tents come with a private bathroom. This vast site is home to a swimming lake and offers a delicious breakfast.

BOOK HERE on Booking.com

Where to stay in Algarve for surfing

For surfers the area of Sagres is where to stay in Algarve Portugal

Surf’s up! Portugal offers some of the best surfing conditions in all of Europe. And again, the Southwest Alentejo and Vicentine Coast Natural Park is the place to be. Especially the stretch between Sagres / Vila do Bispo and Aljezur is a surfer’s paradise with beaches such as and Zavial, Tonel, Amado, Bordeira, Arrifana, Monte Clerigo and Odeceixe.

White and modern villa with pool

The luxurious Arrifana Beach Villa, with its private pool and jacuzzi, is located right next to one of the best surfing beaches in Portugal.

BOOK HERE on Booking.com

Our preferred Algarve towns

What we love about Algarve is the diversity: beaches, green hills, small villages, lagoons, wildflowers… The ideal Algarve itinerary offers a bit of everything, making it hard to pick just one favorite place. Our personal interests include sightseeing, easy hikes, beaches and a hint of luxury. Therefore, to us, these Algarve destinations stand out as the perfect travel bases to explore the wider area.

  • Lagos, because it’s located in between the overwhelmingly beautiful natural park and the best beaches in the Algarve. We also found the historic center to be irresistibly charming and the Ponte da Piedade cliffs truly spectacular. It’s also perfectly based for day trips, such as a visit to Silves Castle, and the marina offers plenty of boat excursions.
  • The Golden Triangle, because it’s located near the Ria Formosa Natural Park and therefore near the beautiful deserted islands and the sleepy village of Olhão. Yet, it’s ideally located to explore historic Faro and quaint Loulé in the morning and then enjoy the Algarve coastline from a chartered yacht in the afternoon. The vicinity to Faro Airport, the gateway to Algarve, is a bonus.

Our least favorite would be Albufeira. We found it to be overly touristy and tacky. It’s not the kind of place where we would like to spend our Algarve holidays. Then again, we’re probably not the target audience of this swinging town in Algarve either. But to us, Albufeira certainly lacks the luster that makes other Algarve towns and villages so charming and inviting.

Where will you stay in Algarve?

When you’ve come this far in the article, then A: Kudos to you, you’ve earned yourself a treat and B: You’ll probably have a good idea on where to stay in Algarve. If so, then we’d love to hear all about your upcoming stay. If not, then let us know what piece of the puzzle is still missing from this article so we can perfect our Algarve travel advice. Either way, the comment box is all yours.

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