Top 5 Algarve Locations to Stay in 2025: Best Areas Explored

The Algarve is the premier destination that comes to mind when discussing the stunning beaches in Portugal. Known for its breathtaking Atlantic coastline, the region showcases dramatic landscapes adorned with orange sandstone cliffs and captivating sea caves such as Benagil. Situated just above North Africa, visitors can bask in at least 300 days of sunshine annually—making any season a perfect time to explore. However, finding the ideal place to stay in the Algarve can be quite challenging given the plethora of incredible areas available.

Overview of the Algarve

One of the biggest challenges we encountered during our initial visit to the Algarve was determining where to stay to fully experience its beauty. The choice between lively areas like Lagos, vibrant Albufeira, quaint fishing villages such as Salema in central and western Algarve, or the nature-rich Faro and Ria Formosa Natural Park in the east can be daunting. Each region has its unique character, and we aim to assist you in identifying which locale aligns with your preferences.

Understanding the importance of selecting the right neighborhood for your trip, we present our recommendations on where to stay in the Algarve, alongside additional insights on top hotels and resorts in each area.

Why You Should Listen to Us

We possess extensive knowledge of the Algarve from first-hand experiences. In addition to this guide, there will be references to our blog, where you can delve into our adventures in this beautiful region. It’s crucial to note that while some travelers appreciate the lively atmosphere of popular tourist resorts, others seek the charm of historic towns or the romantic ambiance of rooftop dining. Travel has something for everyone, and we aspire to match you with the ideal spot and accommodation in the Algarve.

Where To Stay in the Algarve

The Algarve is expansive, comprising 16 distinct municipalities. Your choice of where to reside can significantly influence your overall experience. While there are four primary options (inland countryside, city centers, coastal towns, or fishing villages), each boasts a unique personality and array of attractions.

If you seek a central location for nightlife, tranquil beaches for relaxation, or historical landmarks for sightseeing, we have you covered with our recommendations on the best areas to stay in the Algarve.

Don’t have time to read the full article?

Here’s a quick summary of our top recommendations if you’re pressed for time:

• If You’re a First-Time Visitor:

We recommend Albufeira as the ideal base for a first-time visitor. It features a lovely old town, sits centrally in the Algarve, and offers an abundance of golden sandy beaches along with attractions such as Benagil Cave and dolphin-watching tours. Consider staying at Musical Hostel ($), Alisios Hotel ($$), or Monicca Collection Suites & Residences ($$$).

• Our Favorite Areas and Hotels Overall:

As a rule of thumb, we particularly enjoy Carvoeiro, Albufeira, Lagos, and Vilamoura. If location isn’t your primary concern, these are our top hotel recommendations across the Algarve based on various budget levels: Tilia Hostel ($), Dom Pedro Vilamoura ($$), and Tivoli Carvoeiro Algarve ($$$).

• If You Want Alternate Accommodation to Hotels:

For those who appreciate the flexibility that alternative accommodations provide, the Algarve abounds with villas, apartments, and studios for rental. Here are some of our favorites: Colina da Lapa & Villas ($), Casa Margo ($$), and Monicca Collection Suites & Residences ($$$).

Where We Stayed: Tivoli Carvoeiro Algarve

During our most recent visit to the Algarve coast, we opted for accommodation at Tivoli Carvoeiro Algarve in the charming town of Carvoeiro. We found this 5-star property incredibly stunning, with its cliffside location offering breathtaking views of Praia do Vale Covo. It is an excellent choice for luxury and magnificent vistas.

The hotel provides complimentary shuttle service and serves a delightful daily breakfast buffet. We particularly enjoyed its outdoor swimming pools and spa facilities, which even include a dive center. Rooms offer either balconies or terraces, some showcasing ocean views—definitely worth considering if you enjoy outdoor space.

Carvoeiro: Our Recommendation

Carvoeiro stands as a tranquil resort town, less bustling than Albufeira and Vilamoura. It serves as an ideal base for those seeking a more laid-back experience in the Algarve, offering splendid beaches, such as Praia do Paraiso, Praia do Carvoeiro, and the stunning Praia da Marinha. This destination is perfect for unhurried exploration of its natural beauty.

Adventures await along the Carvoeiro Boardwalk, which meanders for 570 meters of coastline populated with explorable caves and culminates at the breathtaking rock formations of Algar Seco. The town center is dotted with cozy cafes and bars, appealing to those wanting to soak up the abundant Algarve sunshine.

Though it may be tranquil, Carvoeiro’s location proves convenient for sightseeing. With just a 30-minute bus ride or a 20-minute car trip to Portimao, you can explore the harbor city’s old town and bustling marina. If you decide to rent a car like we did, attractions such as the medieval Fort of Santa Catarina de Ribamar and the Moorish Castelo de Silves are easily accessible. For those wanting to immerse themselves in the buzzing tourist atmosphere, Albufeira and its famed Benagil Caves are just a 30-minute drive east.

Pros and Cons of Carvoeiro

Pros:

• A more tranquil atmosphere combined with picturesque beaches
• Abundant natural attractions, including caves
• Convenient access for day trips to major tourist areas

Cons:

• Peak season can still be crowded, not entirely rural
• A car is essential for exploring the more remote attractions
• Accommodation prices can be high

Highlights of Staying in Carvoeiro

Carvoeiro is an appealing base offering abundant natural scenery. Here are several highlights to enjoy during your stay:

• Hike along the scenic Carvoeiro Boardwalk to see Algar Seco Rocks
• Relax on inviting beaches like Praia do Paraiso or Praia de Carvoeiro
• Take a day trip to neighboring locations like Albufeira or Portimao
• Socialize in cozy cafes and bars throughout the town center

Best Places to Stay in Carvoeiro

Given its small size, Carvoeiro primarily offers options in the town center or its outskirts. However, the area does expand a bit, stretching inland and along the coastline.

If you prefer ocean views or easy access to beaches, consider accommodation along the coastline. For those who enjoy urban settings, the town center is just a few minutes’ walk from shops and restaurants.

Luxury: Tivoli Carvoeiro Algarve

Tivoli Carvoeiro Algarve is the 5-star property mentioned earlier, truly breathtaking in its design. Situated on a clifftop with stunning views overlooking Praia do Vale Covo, it boasts beautiful outdoor pools and luxurious amenities.

The two exceptional on-site restaurants include a seafood restaurant inspired by fresh Atlantic ingredients. Pamper yourself at the spa, featuring an indoor pool, sauna, steam room, and fitness center—truly a luxurious stay in Carvoeiro.

Mid-Range: Castelo Guest House

Castelo Guest House is a charming property that resembles an elegant castle perched atop a cliff with mesmerizing ocean views. Choose from guest rooms that may even include private terraces for a truly delightful experience.

Though lacking an outdoor pool, its proximity to a stunning beach just steps away enhances its appeal. The unique ocean-themed decor will make you feel right at home during your stay.

Budget: Colina da Lapa & Villas

Colina da Lapa & Villas is located a bit outside the town center but offers low rates for basic accommodation. Each one-bedroom apartment comes with a spacious lounge and a fully equipped kitchen, making it perfect for budget-friendly travelers.

Enjoy the traditional decor, abundant natural light, and a lovely balcony seating area. On-site amenities include a communal outdoor pool and a kid’s playground, plus bike rentals for easier exploration.

Lagos: Culture-Focused Visitors

If you’re interested in a culturally rich experience, Lagos is the place to stay in the Algarve. This beautiful waterfront town features a historic old town encircled by protective walls dating back to the 16th century. The inviting atmosphere, coupled with wooden steps leading to the picturesque Praia do Camilo, balances history with stunning beaches.

Lagos also offers an array of cultural attractions for sightseeing and sunbathing. Explore the charming streets lined with whitewashed buildings, behold the architectural marvels at the Castle of Lagos, and visit the beautiful Igreja de Santo Antonio church to learn about local Catholic heritage.

Situated in the western Algarve, Lagos is surrounded by quaint fishing villages and rocky coastal cliffs, making it ideal for hiking enthusiasts. Should you wish to venture out, the Parque Natural do Sudoeste Alentejano Costa Vicentina is within reach, offering lush hiking trails and vibrant greenery.

Pros and Cons of Lagos

Pros:

• Rich cultural heritage visible through historic buildings and fortifications
• Close proximity to stunning beaches
• Feasible day trips to major attractions, including Benagil Caves

Cons:

• Further distance from some attractions; ideal for repeat visitors to the Algarve
• Accommodation tends to be pricey
• At times, it can be crowded with tourists

Highlights of Staying in Lagos

Lagos is an enjoyable destination for strolls and explorations. Be sure to visit:

• The inviting old town with stunning whitewashed buildings and historic walls
• The Castle of Lagos for a peek into local history
• The vibrant street art along downtown areas of Lagos
• The serene waters of Praia Dona Ana for sunbathing

Best Places to Stay in Lagos

With its rich offerings, Lagos presents a variety of accommodation options. Travelers can choose to stay in the old town for a traditional feel, explore the funky downtown vibes, or reside in the quieter residential areas like Ameijeria.

For those prioritizing proximity to the coast, the southeastern part of town makes for an excellent choice, granting immediate access to Praia Dona Ana and Praia do Pinhao.

Luxury: Marina Club Lagos Resort

Marina Club Lagos Resort is a centrally positioned 4-star aparthotel, offering studios and three-bedroom apartments. It is perfect for those desiring the convenience of self-catering while enjoying the spaciousness of an apartment.

With modern decor, each unit has its own balcony, providing ample outdoor relaxation options. The expansive grounds include a garden and communal outdoor swimming pool. For those wishing to unwind, a spa and restaurant on-site offer added convenience.

Mid-Range: Infante Guesthouse

Infante Guesthouse offers cozy mid-range accommodations with a welcoming atmosphere right in downtown Lagos. Spread over two floors, this intimate guesthouse features a mix of single and double rooms, ensuring personal service.

Each room is equipped with air conditioning, a TV, and a bathroom with complimentary toiletries. Notably, Infante Guesthouse boasts a rooftop terrace offering breathtaking views of nearby beaches, with Batata Beach just a stone’s throw away. Ideal for travelers on a mid-range budget, this guesthouse strikes a perfect balance between charm and accessibility.

Budget: Sol a Sol Hostel

Sol a Sol Hostel is a lively youth hostel catering to guests aged 18 to 50. Centrally located amidst the bustling town atmosphere, this hostel attracts social butterflies eager to engage in the nightlife.

Offering both private rooms and mixed or female-only dormitories, guests benefit from a BBQ area, a sun terrace, and organized social events—like snorkeling tours—making it an excellent budget-friendly option.

Albufeira: Nightlife and First-Time Visitors

For first-time visitors to the Algarve, Albufeira provides an excellent opportunity to experience nightlife and beach culture. With its old town and energetic strip, travelers can enjoy traditional whitewashed buildings, cobbled streets, quirky markets, and a myriad of al fresco seafood restaurants. The strip is home to various clubs and bars, making it ideal for evening entertainment.

The town center even features a unique escalator leading to the vibrant old town and Praia dos Pescadores—great for urban sunbathing amidst plentiful shops and plazas. With a solid tourist infrastructure, Albufeira remains lively at all hours, offering a variety of dining options and iconic historic architecture for exploration.

This central location is especially favorable for accessing scenic beaches and day trips. Being centrally located within the Algarve means that no attraction is more than 1.5 hours away by car—making it a superb choice for newcomers to the region.

Pros and Cons of Albufeira

Pros:

• A rich variety of dining and shopping options, with a walkable center
• Access to beautiful beaches
• A well-established tourist infrastructure, including tour options

Cons:

• Accommodation costs can be high
• Lacks rich cultural and historical attractions
• Can become overcrowded

Highlights of staying in Albufeira

This lively resort town captures the hearts of many visitors with its diverse offerings. Highlights include:

• Riding the escalator to the old town for a stroll among charming houses
• Relaxing on Praia dos Pescadores
• Visiting the Museu Municipal de Arqueologia for local insights
• Enjoying a boat tour to explore coastal caves or go dolphin-watching

Best Places to Stay in Albufeira

Albufeira’s extensive layout offers various accommodation options, whether along the strip, near the old town, or closer to the coast.

To ensure availability, planning ahead is wise, especially during peak season. Here are some noteworthy choices:

Luxury: Monicca Collection Suites & Residences

Monicca Collection Suites & Residences presents a luxurious seafront experience with a stunning architectural design in the shape of a pyramid. This 4-star property features spacious private balconies for each accommodation choice, making it perfect for large groups seeking high-end lodging in Albufeira.

With options ranging from studios to deluxe two-bedroom suites capable of sleeping six adults, guests can enjoy in-room kitchenettes and oversized living areas, along with a daily continental breakfast and access to a large outdoor swimming pool and garden.

Mid-Range: Alisios Hotel

Alisios Hotel embodies a close-knit atmosphere just steps from the beach. Located on a grassy slope, patrons can easily access sandy shores, making its location unbeatable.

Boasting a panoramic deck that serves food and cocktails, weary guests can also unwind at the heated saltwater pool with delightful private balcony views. Located around 1 km from the old town, complementary bike rentals give visitors a smooth journey to explore the area while staying peacefully connected to nature.

Budget: Musical Hostel

Musical Hostel provides budget-friendly accommodations featuring a mix of dormitory rooms equipped with privacy curtains for added comfort. Reflecting its value, this well-reviewed hostel grants access to shared kitchen facilities, perfect for those looking to save money while enjoying the vibrant atmosphere of Albufeira.

The central location enhances organizational ease for nightlife outings, as well as access to local attractions. To top it off, guests can unwind with a hot tub facility—so be sure to pack your swimsuit!

Vilamoura: Golfing and Luxury Resorts

Often referred to as “Portugal’s Monaco”, Vilamoura showcases soft white buildings surrounded by serene golf courses and upscale resorts. If luxury is what you seek, Vilamoura is the pinnacle of accommodation choices in the Algarve. Many of these exquisite resorts even provide access to immaculate golf courses and tranquil beaches. This destination is perfect for those desiring opulent retreats with a tranquil ambiance.

Strolling along the picturesque marina taking in the evening views creates a captivating atmosphere, further enhanced by the nearby Cerro da Vila archaeological museum showcasing Roman villa remnants. Moreover, staying in Vilamoura places you within walking distance of the quaint fishing village of Olhos de Agua, located at the opposite end of Praia da Falesia.

Being just a 30-minute drive from Faro Airport, Vilamoura allows for easy access to the broader Algarve region—making it an ideal choice for anyone seeking a refined getaway.

Pros and Cons of Vilamoura

Pros:

• An abundance of golf courses
• Convenient beach access
• Central location for both Faro Airport and sightseeing opportunities

Cons:

• Guided tours or rentals are needed for exploring major attractions
• Potentially lacks authenticity in cultural experiences
• May be on the pricier side

Highlights of staying in Vilamoura

With its glamorous offerings, Vilamoura places a strong emphasis on leisure activities and fine dining. Here are its primary highlights:

• Explore the Roman ruins at Cerro da Vila
• Sunbathe on Praia da Falesia and stroll to Olhos de Agua
• Play a round of golf on scenic courses
• Participate in guided excursions, such as dolphin-watching trips

Best Places to stay in Vilamoura

Vilamoura is perfect for those who prefer a leisurely pace during their vacation. The town features abundant green spaces thanks to its golf courses and beach accessibility.

For a refined experience in the Algarve, here are top hotel recommendations:

Luxury: Four Seasons Vilamoura

Four Seasons Vilamoura is known for upholding the high standards of the Four Seasons brand. This luxurious resort comes complete with a lagoon-style pool and stunning views of the Pinhal championship golf course, appealing to avid golfers with its private 18-hole course entrance.

Offering ample on-site entertainment options and remarkable dining experiences, guests can savor buffet and a la carte meals alongside cocktails at the pool bar.

The resort boasts essential amenities, including an indoor heated pool, spa facilities, and a variety of accommodations featuring kitchenettes for added convenience.

Mid-Range: Dom Pedro Vilamoura

Dom Pedro Vilamoura is a splendid 4-star hotel positioned just minutes from Vilamoura’s marina. It offers unparalleled access to enticing restaurants and trendy bars.

Guests can enjoy a private outdoor swimming pool and an on-site spa featuring an indoor pool, gym, and jacuzzi—creating a relaxing environment to retreat after an invigorating day.

Accommodations vary from classic doubles to family suites, with some providing private balconies and ocean views—perfect for those seeking a mid-range luxury escape.

Budget: Conii Hostel & Suites

Conii Hostel & Suites is a fantastic budget accommodation nestled along the coastline in Vilamoura. Not readily known for its budget-friendly lodging options, this hostel offers a choice of dormitories and private rooms within a beautifully renovated property.

A communal kitchen helps guests save money on meals, with the opportunity to enjoy a breakfast onsite—making this a prime option for travelers looking for a quality, affordable stay.

Faro: The Eastern Algarve Gem

Faro, the regional capital, is the ideal place for sightseeing and offers easy access to serene beaches situated on offshore islands. Many tourists prefer to skip Faro, hurrying directly to other coastal locations upon arrival; however, this bustling city boasts much worth exploring and shouldn’t be overlooked.

Attractions such as Faro Marina, Igreja de Santa Maria, and the Regional Museum of the Algarve exemplify the rich history and culture of the area. Beautiful architectural structures like the Arco da Vila and Igreja da Ordem Terceira de Nossa Senhora do Monte do Carmo enhance the essence of this vibrant city.

Additionally, Faro’s beautiful beaches remain relatively quiet as tourists typically flock to more central destinations. Explore the serene Barrinha Beach, Praia de Faro Este, or Lighthouse Beach located on barrier islands accessible only by boat shuttles. The natural wonders of Parque Natural da Ria Formosa invite visitors to partake in kayaking excursions and birdwatching opportunities.

As the largest city in the Algarve, Faro serves as a hub for excursions eastward toward the Spanish border, passing through fewer touristy towns compared to its western counterpart. It embodies the essence of the Algarve’s charm.

Pros and Cons of Faro

Pros:

• Rich selection of cultural attractions, such as museums
• Tranquil beaches on accessible barrier islands
• Access to nature in the Ria Formosa Nature Reserve
• Fewer tourists as most opt to travel further up the coast

Cons:

• Urban congestion—being a city, it can still be busy
• Beaches require a trip by boat
• Sightseeing major attractions like Benagil Caves necessitates a designated day trip

Highlights of Staying in Faro

Faro excels in formal sightseeing, offering a great range of attractions within a compact area. For those seeking adventure, the barrier island beaches present an exciting alternative. Key highlights include:

• Kayaking through Parque Natural da Ria Formosa
• Boating from Faro Marina to explore the island beaches
• Admiring the grandeur of Arco da Vila
• Visiting the Regional Museum of the Algarve
• Taking day trips to attractions like Benagil

Best Places to Stay in Faro

Centrally located accommodations in Faro are beneficial for access to attractions. Alternatively, staying on built-up islands like Culatra ensures quicker access to nearby beaches while remaining just a boat ride from the city’s attractions. Your preference—whether it’s beaches or sightseeing—will dictate the best fit for your stay. Below are prime hotels in central Faro.

Luxury: 3HB Faro

3HB Faro is a chic 5-star property situated just east of the city center. Overlooking cobblestone streets, the exterior opens up to a massive infinity pool with views of the old town of Faro. Guests can indulge in al fresco dining or retreat to spacious rooms with personalized room service.

Accommodations range from standard twin rooms to deluxe suites boasting additional living spaces. The contemporary design along with added facilities, such as an indoor pool, spa area, and gym, make 3HB Faro a luxurious haven for visitors.

Mid-Range: Luxury Guest House_Opus One

Luxury Guest House_Opus One provides an elegant escape with a private outdoor pool nestled within a tranquil courtyard, accented by candlelight at night. Guests also have access to shared gardens, lounges, and sun terraces for relaxation in the Algarve sunshine.

This intimate setting feels much quieter than larger resorts, housing a hammam and on-site bar for social enjoyment. Accommodations include a variety of options, from standard double and twin rooms to luxurious suites featuring spa baths on the private terrace—ideal for mid-range budgets.

Budget: Tilia Hostel

Tilia Hostel, painted in sunny yellow, is modern and cheerful. This facility offers various dormitory options, with mixed and female-only rooms for comfort.

For those desiring more privacy, standard twin and double rooms are available, usually at higher prices—allowing for more mid-range options. With a shared kitchen, you’ll save significantly on meals by picking up groceries and enjoying a relaxed evening in.

FAQs: Visiting the Algarve

The Algarve boasts stunning coastlines and is home to some of Europe’s finest beaches, enhanced by striking cliffs and extensive hiking trails. The inland area showcases picturesque whitewashed cottages adorned with vibrant woodwork and fruit-bearing trees.

Whether you’re seeking a brief city escape or a weeklong beach holiday, the Algarve is rich in suitable options. Here are some frequently asked questions that might assist in your planning:

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

For first-time visitors, Albufeira is recommended for its balance of attractions, including Benagil Cave and the beautiful old town.

What is the most beautiful part of the Algarve?

While the entire region is stunning, the central Algarve is particularly notable for its breathtaking beaches, captivating caves, and iconic cliffs. The eastern Algarve offers the Ria Formosa Natural Reserve for those preferring green spaces, while the western Algarve is best for fishing villages and main towns.

Is Lagos or Albufeira better?

Lagos offers a smaller, more authentic experience with historical sites, whereas Albufeira is larger and heavily oriented toward tourism and nightlife, still featuring incredible attractions like Benagil and its quaint old town.

What is the most charming town in the Algarve?

Lagos is captivating with its historical charm and tranquil ambiance, making it a delightful contrast to bustling areas like Albufeira.

Where Not to Stay in the Algarve

The Algarve is generally safe; however, it’s prudent to take basic safety precautions. Some locations, especially those near airports like Faro, should be avoided due to noise pollution. Airports in the Algarve tend to be distanced from other attractions and community life, making them less desirable for accommodation.

Although numerous beautiful rural villas are available for rent in the inland areas, we recommend renting a car to easily navigate as public transport is limited; it’s also essential to consider wildfire risks. Familiarizing yourself with safety precautions is crucial for enjoying the outdoor landscape.

If you prefer not to deal with car rentals or wildfire uncertainties, we advise staying along the coast, where public transport is abundant and walking to attractions is a breeze.

Geography of the Region

To grasp the Algarve’s regions fully, understanding its layout is essential. The Algarve stretches horizontally across Portugal’s southern coastline, facing North Africa—from the Spanish border to a rocky headland marked by an iconic lighthouse.

In the western Algarve, you’ll find charming fishing towns and the vital town of Lagos, characterized by steep coastal cliffs. Central Algarve encompasses Albufeira, a hub of nightlife and organized tourism, along with quieter towns like Vilamoura, renowned for its golf courses and opulent resorts—a fantastic option for first-time visitors who appreciate easy access to a tourist infrastructure.

Eastern Algarve’s capital, Faro, boasts a significant airport and coastal wetlands within its nature reserve. Further east, the smaller resort towns cater to those who have already enjoyed the Algarve. Ultimately, your choice of accommodation depends on individual preferences—whether you crave sightseeing tours, lively resort pools, or peaceful retreats in Portuguese countryside. Whichever you choose, we wish you a fantastic experience.