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Where to Stay in the Algarve, Portugal: 6 Best Towns and Hotels

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.

Caneiros Luxury House and Suites breakfast, Ferragudo, Algarve, Portugal

Algarve Accommodation Map

How to use this map | Click on map icons to display further information. Each color signifies a different Algarve destination.


Western Algarve

Lagos, Alvor



Armação de Pêra

São Rafael


Loulé, São Brás de Alportel

Olhão, Tavira, Eastern Algarve


1. Ferragudo

Endearing Place to Stay in Algarve for a Quiet Holiday

Ferragudo, 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 and Borda Do Cais. Another great dining option is the Vietnamese restaurant Sen Tonkin.

Ferragudo Accommodations

Caneiros Luxury House & Suites, Ferragudo, Portugal
Caneiros Luxury House & Suites

Midrange | The impeccably-run One2Seven offers a range of bright and clean double rooms and apartments in the historic center of Ferragudo. The aparthotel’s central location affords easy access to multiple restaurants, the Arade River, Praia da Angrinha, and Fort of São João do Arade. Guests love the swimming pool, fitness center, and terrace breakfast.

Midrange | The hillside Vitor’s Village in the center of Ferragudo offers a range of rooms, suites, and apartments that cater to various needs. The village property boasts an on-site restaurant, 3 pools, and nearby free parking. A complimentary shuttle service ensures easy access to nearby beaches. 

Top Choice – Luxury | We wholeheartedly recommend staying at Caneiros Luxury House & Suites, a hidden gem hotel 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 guide to 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.

Luxury | Hotel Rural Brícia Du Mar is a 4-star hotel in Ferragudo, situated between the town center and Praia da Rocha. This peaceful retreat offers air-conditioned rooms, an outdoor swimming pool and bar, gym, and on-site restaurant. 

More Ferragudo Accommodations | Vila Castelo Parque (luxury)

Look for accommodation in Ferragudo.

2. Lagos

Best Base in Algarve for Travelers Without a Car

Praia do camilo beach, 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.

Lagos Town Center Accommodations

Budget | Boutique Taghostel is a charming, centrally-located hostel with mixed and female-only dormitories. Guests have access to a communal kitchen, sea-facing rooftop terrace, and living room. 

Budget | Olive Hostel Lagos is a lively hostel set in the historic center of Lagos with a communal patio, on-site bar, and kitchen. 

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.

Top Choice – Midrange | The recently renovated Alto Mar Inn is a lovely B&B with air-conditioned rooms and free, on-site parking.

More town center accommodations | Vi Mar Guesthouse (midrange)

Outside Town Center Accommodations

Midrange | Solar de Mós Hotel is a family-run B&B in Lagos, walking distance to the coastal trails and the town center. This clean and homey guesthouse features clean rooms, a well-kept outdoor swimming pool, and terrace. 

Luxury Adults-Only | Villas D. Dinis – Charming Residence offers air-conditioned villas with private terraces set around a pool and garden. The property is a 5-minute walk to Praia Dona Ana and a 10-minute walk to Praia do Camilo. 

Luxury | Overlooking the Atlantic Ocean, Cascade Wellness Resort is a serene cliff-top retreat that offers an assortment of rooms, apartments, and villas. All holiday needs are met with the outdoor swimming pool, quality breakfast service, several on-site restaurants, bar, adults-only (ages 16+) spa, open 10 am – 6 pm.

More outside town center accommodations | Lagos Atlantic Hotel (luxury), Vivenda Solmar (luxury), and Fazenda Viegas (luxury)

Look for accommodation in Lagos.

3. Carvoeiro

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

Carvoeiro, 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 along the 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

Trail of Headlands, Algarve, Portugal

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 | O Castelo Guest House offers spotless rooms with gorgeous sea views. The location is outstanding as it’s close to the Carvoeiro beach and town center restaurants. Excellent Staff & Service.

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. 

More Carvoeiro Accommodations | Villa Welwitshia (budget-midrange), Placid Village (midrange), Carvoeiro B&B and SPA (midrange), Quinta Nova Vale Del Rey (midrange), or Quinta do Ourives (luxury)

Look for accommodation in Carvoeiro.

4. São Brás de Alportel

Great off-the-beaten-path place to stay for 1-2 nights on an Algarve road trip. 

São Brás de Alportel is a town located in the Barrocal region, a 25-minute drive from 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. During our second trip to the Algarve, we drove 1-hour out-of-our-way just to eat here again. 

São Brás de Alportel Accommodations

Budget | Forever São Brás is a guesthouse with small, clean air-conditioned rooms. Guests love the location and the hospitality.

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.  

Look for accommodation in São Brás de Alportel.

5. Odeceixe

Great Place to Stay in Algarve when Exploring Costa Vicentina

Odeceixe Windmill, 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

Odeceixe Village, Algarve, Portugal

Budget | Bohemian Antique Guesthouse is a charming accommodation in Odeceixe with lovely furnishings and decorative accents. This centrally-located guesthouse has double rooms as well as a dormitory. The communal living space and kitchen are a bonus.

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. 

Midrange | The welcoming AL-Odeceixe Verde is a lovingly-renovated B&B in Odeceixe. 

Luxury | Casas Do Moinho is a comfortable bed and breakfast with a swimming pool, situated just steps away from the Odeceixe windmill and Altinho restaurant.

More Odeceixe Accommodations | SulSeixe Guesthouse (budget), Casa Morais (budget), Casa Luar (budget), and Altinho B&B (luxury)

Look for accommodation in Odeceixe.

6. São Rafael

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

Praia de São Rafael Beach, 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 NAU Sao Rafael Atlantico.

São Rafael Accommodations

Praia dos Arrifes, Algarve, Portugal

Luxury | NAU Sao Rafael Atlantico is the best accommodation in the area, with its modern facilities, sweeping sea views, private access to São Rafael Beach, and on-site restaurants.

Luxury Apartment | Top-rated Feliz Algarve is a modern, 2-bedroom apartment in Sao Rafael, a mere 15-minute walk to Praia de Sao Rafael.

Look for accommodation in Sao Rafael.

More Portugal Travel Guides

Portugal Itineraries: 

Algarve Travel: 

Portugal Hikes: 

Where to Stay in Algarve, Portugal

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Moon & Honey Travel is an independent blog created by two passionate hikers. We are able to provide free content to you, because of ads and affiliate links. When you make a purchase using one of these links, we may receive a small commission at no extra cost to you. Happy travels and happy trails, Sabrina and Kati

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