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I visited the Algarve in the summer of 2024. Initially, I thought of spending just a couple of nights and then heading to Porto, but I ended up staying for a whole week! It’s the kind of place that feels like a postcard come to life. But deciding where to stay in this sun-kissed region can be tricky. Having experienced the Algarve firsthand, let me help you find the best place to stay in the Algarve.

After all, there are so many towns in the Algarve to choose from! Each town has its own vibe. While some places in the Algarve are great for families, others are perfect for backpackers, and so on. You wouldn’t want to end up in the wrong town!

During my holiday, I had decided to split my time. But I ended up staying the whole week in Carvoeiro. That said, I did extensive research before deciding where to stay in the Algarve for a week. So, I present to you my list of the best places to stay in the Algarve, Portugal, for every kind of traveller.

1. Lagos: For first-timers and budget travellers 

If it’s your first time in the Algarve, Lagos is a no-brainer. It’s the perfect blend of everything you could want in a coastal getaway: stunning beaches, a lively atmosphere, rich history, and a charming old town full of character.

Lagos offers some of the most beautiful beaches in the Algarve, with Praia Dona Ana topping the list. The town is packed with history, from the ancient city walls to the atmospheric churches, and wandering the cobbled streets feels like stepping back in time. As a bonus, Lagos is the starting point for boat tours to the incredible Ponta da Piedade grottoes.

It is especially popular with the backpacker crowd or generally budget travellers. I’d personally not recommend Lagos for families. While it makes for a great spot for a day trip, it’s not my first choice for a town to stay in the Algarve with family.

Hotels in Lagos 

Budget hotels in Lagos

1. Casa do Sol Algarve
2. Apartamentos Pinhao

Mid-range hotels in Lagos 

1. Pestana Dom Joao II & Beach Resort Hotel
2. Vila Luz

Check out more hotels near Lagos Algarve

Fun things to do in Lagos Algarve:

1. Lagos has so much to offer history buffs. Visit the Igreja de Santo António, with its stunning gold-leafed altar, and the fascinating Lagos Slave Market, which offers a poignant look at the town’s role in the transatlantic slave trade.
2. Don’t miss this opportunity to witness the incredible cliffs and hidden caves of Ponta da Piedade from the water.
3. Take your time to explore the charming streets, stopping for coffee at a local café or browsing the shops selling handmade pottery and artisan goods.

Check out some guided tours in Lagos.

2. Albufeira: For the party lovers

If you thrive on the pulse of nightlife, Albufeira should be at the top of your Algarve list. This lively town offers the perfect balance between stunning beaches and a buzzing after-dark scene, making it the best spot to stay in the Algarve for nightlife. Praia da Oura and Praia dos Pescadores are just two of the many gorgeous beaches here, but the real action begins when the sun sets. The infamous “Strip” is packed with bars, clubs, and plenty of opportunities to dance until dawn.

Hotels in Albufeira 

Budget hotels in Albufeira

1. Sea view Studio
2. INATEL Albufeira

Mid-range hotels in Albufeira

1. Hotel Sol e Mar
2. Auramar Beach Resort

Check out more hotels near Albufeira Algarve

Fun things to do in Albufeira Algarve

1. While Albufeira is mostly known for its nightlife, it does have a quaint old town. Spend an afternoon wandering the narrow streets of the historic centre, visiting the Igreja Matriz (the main church) and the charming square at Praça dos Pescadores.
2. Head to one of the beach clubs, like the stylish “NoSoloÁgua,” for a sunset drink and a laid-back vibe by the sea.

Check out some guided tours in Albufeira.

3. Carvoeiro: Ideal for small-town vibe

Carvoeiro stole my heart. It’s quieter than Lagos but just as stunning. This charming coastal village offers a slower pace of life, perfect for those seeking peace and natural beauty without the crowds. The town’s main beach, though small, is beautifully set against dramatic cliffs, and there’s nothing quite like watching the sun dip below the horizon from this spot.

One of the highlights of my trip was hiking the Seven Hanging Valleys Trail—a breathtaking route that runs along the coastline, offering jaw-dropping views of secluded beaches and turquoise waters. I feel it is the best spot to stay in the Algarve for families and also the best spot to stay in the Algarve for couples.

Hotels in Carvoeiro 

Budget hotels in Carvoeiro

1. Placid Village
2. Hotel Carvoeiro Plaza

Mid-range hotels in Carvoeiro

1. Tivoli Carvoeiro Algarve Resort
2. Pestana Palm Gardens

Checkout out hotels near Carvoeiro Algarve

Fun things to do in Carveoiro

1. Carvoeiro may be small, but its charm lies in its history. Take a walk through the town and visit the Nossa Senhora da Encarnação Chapel, an iconic part of the town’s religious and cultural history.
2. Take a boat trip to explore Carvoeiro’s stunning caves, including the famous Benagil Cave, known for its unique skylight opening.
3. If you’re a sunset lover like me, head to Algar Seco for some of the best views in the Algarve—it’s the perfect spot for an unforgettable sunset.

Check out some guided tours in Carvoeiro

4. Tavira: A slice of hidden Algarve 

This charming town, often overlooked by tourists, is definitely a hidden gem in the Algarve. Tavira is rich in history, with notable landmarks like the Igreja de Santa Ana and the Roman bridge that stretches across the Gilão River. It’s the kind of place where you can lose yourself in its narrow alleys, stopping to admire the delicate architecture and local shops selling handmade crafts. One of the best parts of Tavira is its proximity to Ilha de Tavira, an island paradise just a short ferry ride away. Making it a good spot to stay in the Algarve if you want to take it slow and relax.

Hotels in Tavira

Budget hotels in Tavira

1. AP Maria Nova Lounge
2. Ozadi Tavira Hotel

Mid-range hotels in Tavira 

1. Tavira House
2. Casa da Gomeira

Check out hotels near Tavira Algarve

Fun things to do in Tavira

1. Visit Igreja de Santa Ana; this beautiful church is a true gem in Tavira.
2. Head to Tavira’s bustling market to discover fresh produce, local cheeses, and handmade goods. It’s the perfect place to get a taste of authentic Algarve life.
3. A short ride from the mainland, this unspoiled island is the perfect spot to relax on the beach, swim in crystal-clear waters, and unwind in complete tranquillity.

Check out some guided tours in Tavira

5. Sagres: For the adventurers and surfers

If you’re the type who craves adventure and wild landscapes, Sagres should be on your Algarve itinerary. Tucked away in the southwestern corner of the region, Sagres offers some of the most dramatic views and untamed beaches in all of Portugal, making it the best spot to stay in the Algarve for surfers.

This town is as raw and rugged as it gets. It’s no surprise that Sagres is a hotspot for surfers. But even if you’re not into surfing, the natural beauty is enough to steal your heart.

Hotels in Sagres

Budget hotels in Sagres

1. Pontalaia Apartamentos Turisticos
2. Sagres Sun Stay – Surf Camp & Hostel

Mid-range hotels in Sagres

1. Memmo Baleeira – Design Hotels
2. Martinhal Sagres Beach Family Resort Hotel

Check out hotels near Sagres Algarve

Fun things to do in Sagres

1. Whether you’re a surfer or just a fan, head to one of Sagres’ beaches like Praia do Amado to watch the surfers in action or take a lesson yourself.
2. Visit the Fortaleza de Sagres, a historic fortress offering panoramic views of the surrounding coastline and a fascinating history, especially in connection with Portugal’s Age of Discovery.
3. Watch the sunset at Cape St. Vincent. The dramatic cliffs and views of the Atlantic Ocean make this one of the most iconic spots in the Algarve.
4. Take a coastal walk along the cliffs to discover hidden beaches and get away from the crowds.

Check out some guided tours in Sagres.

6. Faro: For history buffs and a short visit

While many travellers breeze through Faro as a mere stopover, I believe it’s worth dedicating at least one night here. Faro is a charming town with loads of cultural and historical sites. The Arco da Vila, a beautiful archway dating back to Roman times, was one of the first things I stumbled upon. What really surprised me about Faro was its proximity to the Ria Formosa Natural Park, an area of incredible natural beauty and ecological importance.

It is also the perfect base for exploring the nearby islands of Ilha Deserta and Ilha do Farol. Faro is the best spot to stay in the Algarve for sightseeing, and I’d highly recommend staying in Faro if you are on a short visit.

Hotels in Faro

Budget hotels in Faro

1. Faro Downtown Studios
2. Hostellicious

Mid-range hotels in Faro

1. 3HB Faro
2. Eva Senses Hotel

Check out hotels near Faro Algarve

Fun things to do in Faro

1. Take a boat trip through the stunning Ria Formosa. It’s a great introduction to Faro’s unique ecosystem, complete with salt flats, birdwatching opportunities, and gorgeous lagoon islands.
2. For a more hands-on experience, rent a kayak and paddle through the peaceful waters of Ria Formosa. It’s a peaceful way to connect with nature and discover the beauty of this protected area.
3. Don’t miss the chance to visit Ilha Deserta or Ilha do Farol, two serene islands with unspoiled beaches and no crowds—perfect for a relaxing day away from the mainland.
4. Take a guided walking tour of the old town for a history lesson.

Check out some guided tours in Faro.

So, Where Should You Stay in Algarve Portugal?

Here’s the thing about the Algarve—there’s no wrong place to stay. Whether you’re after sun, adventure, food, or culture, there’s a spot here that’ll feel like it was made just for you. If I can give you one piece of advice? Mix it up! Spend a few lively days in a buzzing town like Lagos or Albufeira, then take it down a notch and unwind in a charming, quieter place like Carvoeiro or Tavira. That way, you get the best of both worlds—the excitement and the relaxation.

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FAQs on Best Places to Stay in Algarve

1. What are the best towns to stay in the Algarve for first-time visitors?

Popular choices include Lagos for its historic charm, Albufeira for its vibrant nightlife, and Vilamoura for its luxurious marina and golf courses.

2. Which part of Algarve is best for families?

Families often prefer Quarteira, Vilamoura, or Alvor for their safe beaches, family-friendly resorts, and calm atmospheres.

3. What are the top luxury areas to stay in Algarve?

For a luxurious experience, stay in Quinta do Lago, Vale do Lobo, or Vilamoura, which feature upscale resorts, fine dining, and exclusive beaches.

4. Where should I stay in Algarve if I love beaches?

Beach lovers should consider Portimão for its stunning Praia da Rocha, Lagos for its dramatic cliffs and coves, or Tavira for its serene island beaches.

5. Is Albufeira a good place to stay in Algarve?

Yes, Albufeira is great for those who enjoy a mix of nightlife, restaurants, and proximity to beaches, making it ideal for young travellers and couples.

6. Where can I find budget-friendly accommodations in Algarve?

Faro, Olhão, and Portimão often have affordable options, including guesthouses, hostels, and mid-range hotels.

7. Which Algarve town is best for couples?

Couples often enjoy Lagos for its romantic sunsets, Carvoeiro for its charming vibe, or Tavira for its quiet, picturesque setting.

8. What is the safest place to stay in Algarve?

The Algarve is generally safe, but towns like Vilamoura, Tavira, and Alvor are particularly quiet and secure for tourists.

9. Are there any eco-friendly places to stay in Algarve?

Yes, many eco-resorts and lodges, such as those near Monchique or Silves, offer sustainable accommodations with a focus on nature and the environment.

10. Which areas are closest to the Algarve airport?

Faro is the closest city to the Algarve airport, with easy access to transportation and nearby beaches.

11. Where should I stay in Algarve for nightlife?

For vibrant nightlife, stay in Albufeira or Portimão, both offering a variety of bars, clubs, and lively atmospheres.

12. What are the quietest places to stay in Algarve?

If you’re looking for tranquillity, consider Tavira, Monchique, or Sagres, known for their relaxed environments and stunning natural settings.

13. Is Lagos a good base for exploring the Algarve?

Yes, Lagos makes an excellent base with its mix of history, beaches, and proximity to nearby attractions.

14. What are the best areas for a golf holiday in Algarve?

Vilamoura, Quinta do Lago, and Vale do Lobo are famous for their world-class golf courses and luxury accommodations.

15. Are there any family resorts in Algarve?

Yes, many family-friendly resorts are located in Vilamoura, Albufeira, and Carvoeiro, offering kid-friendly amenities and activities.