The golden coast of Southern Portugal mesmerizes with its dramatic limestone cliffs and its whitewashed villages. With promises of endless sunny days and blue flag beaches, the Algarve epitomizes the ultimate summer beach destination. 

This region attracts all types of travelers with varying interests and appetites. So, finding out the best place to stay in the Algarve will depend entirely on the season, what you want to do, and who you’re traveling with.

To help you figure out where to stay in Algarve, Portugal, we put together this completely subjective guide. We think the best places to stay in Algarve are scenic destinations with easy access to beaches and coastal trails. Natural beauty is paramount. And, we abhor any place that feels like a tourist invasion. 

Plan your trip to the Algarve: 7-day Algarve itinerary

Where to Stay in the Algarve: Our Top Picks

  • Ferragudo – Best base for a quiet holiday. Great for couples. 
  • Lagos – Wonderful base in Algarve for traveling without a car and with friends.
  • Carvoeiro – Best base for a walking-themed holiday in fall, or spring. 
  • São Brás de Alportel – Great place to stay for 1-2 nights on an Algarve road trip. 
  • Odeceixe – Excellent place to stay in Algarve when exploring the rugged Vicentine Coast.
  • Praia São Rafael – Best base in Algarve for a resort-style beach holiday in summer.

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Endearing Place to Stay in Algarve for a Quiet Holiday

Ferragudo - Where to Stay in the Algarve, Portugal

Ferragudo is a small fishing town located at the mouth of the River Arade. The vibe is distinctly local and sedate. Crowned with a hilltop church, Ferragudo’s terraced townscape rises above the river to create the most picturesque scene. 

Looks aside, Ferragudo offers respite and peace. If you’re seeking a relaxing base in the Algarve away from the crowds, definitely consider staying here. Though sleepy, Ferragudo does have a nice selection of seafood restaurants like A Ria or Borda Do Cais. Another great dining option is the Vietnamese restaurant Sen Tonkin.

Ferragudo Accommodations

Caneiros Luxury House & Suites

We wholeheartedly recommend staying at Caneiros Luxury House & Suites, a hidden gem in Ferragudo.

Though not located directly in the town center, Caneiros Luxury House has the advantage of being close to Praia dos Caneiros. This sandy beach is not only the most beautiful beach in Ferragudo, but it’s also the starting point for the Trail of Headlands walk, which ends in Carvoeiro. You can learn more about this walk in our Best Hikes in Portugal

The hotel’s restaurant Rei das Praias is also located at the beach. Whether you stay at the hotel or not, make sure to watch the sunset at Praia dos Caneiros with a cocktail (or whatever beverage gives you great pleasure) in hand.

We loved staying here because the rooms were comfortable, the staff was extremely professional, the spa facilities were delightful, and the breakfast was always a great treat.

Book your stay at Caneiros Luxury House & Suites.

Find a place to stay in Ferragudo.


Best Base in Algarve for Travelers Without a Car

Lagos, Where to Stay in Algarve, Portugal

Lagos is a vibrant town and a great base in the Algarve for couples, friends, and families. Though definitely not Albufeira status, Lagos does feel distinctly touristic. That’s not necessarily a bad thing; it’s just something to be aware of. Dining and cuisine options are unlimited. You can eat Mexican, Hawaiian, Indian, and the list goes on.

Lagos is also a great option for travelers without a car. You can easily get to Lagos from Faro by train. If you’re coming from Lisbon, you can take a bus (3 hours 40 min) to Lagos as well. When temperatures allow, you can walk to some of Southern Portugal’s most beautiful beaches directly from town. When we visited in November, we walked from Lagos to Ponta da Piedade and back. 

Another advantage of staying in Lagos is your easy proximity to places like Burgau, Praia da Luz, and Sagres

Ponta da Piedade - Where to Stay in Algarve

Lagos Accommodations

Budget | Hotel Mar Azul is a no-frills hotel in the center of Lagos. It’s basic but clean and comfortable. The location can’t be better.

Midrange | 3 Marias Guest House is a top-rated bed and breakfast in Lagos with a wonderful rooftop terrace. The rooms are simple but extremely clean and comfortable. The breakfast is extraordinary.

Luxury | Casa Mãe is a superb hotel in Lagos with an on-site restaurant, bar, swimming pool, and garden. Rooms are airy and designed thoughtfully. This the perfect place to stay for a romantic getaway, honeymoon, or anniversary.

Find a place to stay in Lagos.


Best Place to Stay in Algarve for a Walking-Themed Holiday in Spring, or Fall

Carvoeiro, Where to Stay in Algarve, Portugal

Carvoeiro is a scenic coastal town in the Algarve. It’s one of those few places where the development actually enhances the coast’s natural beauty. 

Flanked by limestone cliffs topped with houses, the Carvoeiro Beach is picture-perfect from every possible angle. Its beauty is simultaneously timeless and nostalgic. 

Though very busy in summer, Carvoeiro is a perfect place to stay during the shoulder season. 

When temperatures are mild, you can walk directly from Carvoeiro Beach west to Ferragudo (Trail of Headlands). You can also walk east along the Carvoeiro boardwalk, which ultimately links to the Seven Hanging Valleys Trail. That’s at least two days of beautiful coastal walking accessible from your doorstep. 

When you need to refuel from your coastal walks, get a smoothie and healthy bite to eat at Earth Café. They also have a very agreeable selection of Portuguese wines. 

Carvoeiro Accommodations

Budget | O Quintal Guesthouse is a darling, light-filled B&B in the center of Carvoeiro. Guests have access to a shared kitchen, lounge, and terrace. 

Midrange/Luxury | Tivoli Carvoeiro is a newly-renovated hotel in Carvoeiro. There is no better option for travelers seeking comfort and convenience. As a guest, you can enjoy two swimming pools and a spa center. You’ll also be treated to cliff and ocean views from your room (opt for sea view) and the hotel’s various bars (there are three). And, if you’re seeking a no-hassle vacation, you can book half board (breakfast and dinner included). Tivoli Carvoeiro has 3 on-site restaurants. 

Find a place to stay in Carvoeiro.

São Brás de Alportel

Great place to stay for 1-2 nights on an Algarve road trip. 

Ysconderijo, Sao Bras de Alportel, Best Places to Stay in Algarve

São Brás de Alportel is a town located in the Barrocal region, 25-minutes north of Faro. Historically, this town served as the summer residence of the bishops of the Algarve. Today, São Brás de Alportel is an unassuming destination that is 100% authentic. Tourism has minimal influence here, which is why we loved it. 

If you’re planning an Algarve road trip, and you want to get a taste for different areas – both inland and coastal – staying in São Brás de Alportel is a lovely treat. From here, you can head to Loulé, the Estói Palace, Tavira, and even Cacela Velha.

Dining is limited, but we would gladly eat every night at Ysconderijo. On our second trip to the Algarve, we drove 1-hour (out of our way) just to eat here again. 

São Brás de Alportel Accommodations

Midrange | Hospedaria São Bras is a charming bed and breakfast located in an old house in São Brás de Alportel. The owner is very friendly and accommodating. 

Midrange | Slow House d’Arco is a modern and impeccably clean guesthouse in São Brás de Alportel. Guests have access to a shared kitchen, terrace, and washing facilities. Everything is spotless and new.  

Find a place to stay in São Brás de Alportel.


Great Place to Stay in Algarve when Exploring Costa Vicentina.

Odeceixe - Where to Stay in Algarve, Portugal

Odeceixe is an offbeat destination in the Algarve, very close to Alentejo. Surrounded by countryside and hovering over the River Seixe, this bucolic town seems disconnected from the rest of the Algarve. 

In summer, this is a booming destination for surfers. During shoulder-season, Odeceixe hosts many hikers who are trekking the Rota Vicentina Fisherman’s Trail

Although it’s easy to reach Odeceixe from Lagos by bus, you definitely want to visit with your car. The town center is 3.5 km from the coast and its main beach, Praia de Odeceixe Mar

The best place to dine in town is Altinho, a tapas and wine bar. The cuisine is excellent, although a bit overpriced. 

Odeceixe Accommodations

Midrange/Luxury Monte do Cardal is the best accommodation in Odeceixe (if you’re traveling by car). Set in a gorgeous location, surrounded by beautiful views, Monte do Cardal is a hidden oasis in Algarve. This Odeceixe hotel features a year-round outdoor pool, excellent breakfast, and exceedingly comfortable beds. Note: Monte do Cardal is an 8-minute drive to the town center and a 13-minute drive to Praia de Odeceixe Mar. 

Book your stay at Monte do Cardal.

Find a place to stay in Odeceixe.

São Rafael

Best Place to Stay in Algarve for a Resort-Style Beach Holiday in Summer

Praia dos Arrifes, Albufeira - Where to Stay in Algarve, Portugal

São Rafael is a tranquil resort town in the Albufeira municipality. We stayed here for a few nights because we love Praia de São Rafael and Praia dos Arrifes. Praia dos Arrifes, in particular, is one of the most photogenic beaches in all of Portugal. It’s best to stay here between June and October. 

However, if you visit off-season like us, you’ll be quite alone. It’s amazing to have one of the most dramatic stretches of the Algarve coast all to yourself. But, it feels quite empty and your dining options become very limited off-season. So, our recommendation is to stay in an apartment, or villa with a fully equipped kitchen, or in a hotel with an excellent on-site restaurant like this one.

São Rafael Accommodations

Sao Rafael Villas, Apartments & Guest House

Midrange | We stayed at Sao Rafael Villas, Apartments & Guest House. While the apartments and villas are quite nice, the guesthouse is very dated and badly in need of refurbishment. Almost every piece of furniture is stained. 

Book your stay at Sao Rafael Villas, Apartments & Guest House.

Find a place to stay in Sao Rafael.

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More Hikes in Portugal:

  • Lagos, Carvoeiro, São Brás de Alportel – Great place to stay for 1-2 nights on an Algarve road trip. Odeceixe – Great place to stay in Algarve when exploring Costa Vicentina.Praia São Rafael – Best base in Algarve for a resort-style beach holiday in summer.