Where To Stay in The Algarve, Portugal – The 6 Best Areas in 2025

The Algarve is a welcoming and safe environment with something close to a resort vibe to it, and it is much more affordable than a lot of other top resorts in Europe. And this is why travelers from the world over regard this stunning coastal region with its Mediterranean climate as a top holiday destination.

In this article, I will take a look at where to stay in the Algarve by looking at the best areas and the activities and accommodations on offer.

Best Places To Stay in the Algarve

Do you just need an idea of the best accommodations in Bogota? We got you covered with our quick picks!

Now that we have taken a quick look at accommodation options, let’s look at where to stay in Algarve, Portugal by checking out the 6 best areas.

The 6 Best Neighborhoods & Areas to Stay in Algarve

Our mini guides are ideal for those who may be short on time and are seeking a quick overview of where to stay in the Algarve, Portugal. Here are our top recommendations for the best places to stay, eat, drink, and unmissable attractions.

1. Faro

The Old Quarter where you will find historic architecture and landmarks

Faro is the Algarve’s historical and characteristic capital. It is the largest city in the Algarve and is home to the Old Quarter, where you will find historic architecture, a cathedral, and various other cultural landmarks.

It is close to the airport compared to many other destinations and has plenty of transport connection options to other regions by bus, train, and ferry.

Although Faro is a great starting point for the region in general, it is not actually near a beach, although they are accessible via a short trip. What you will find here, though is a scenic little fishing harbor and mud flats and lagoons that help form the Ria Formosa National Park.

There is plenty of choice for accommodation in Faro, and it is quite common for visitors to stay in hotels not too far from the Jardim Manuel Bivar Plaza near the center of Faro.

2. Lagos

A maritime town with beautiful views

Lagos has a sense of history that carries forward from its past as a seafaring town.

This is apparent from its ancient walled borders, lighthouses, and churches, which run along its stunning stretch of coastline. Here you’ll certainly find a few vast stretches of beach land with dramatic cliffs and the strong waves of the Atlantic.

Although it is an ideal spot for beach lovers, Lagos is a vibrant city with plenty more to offer, although it is more subdued than some of the lively resort destinations in the Algarve.

It’s a decent choice for first-timers to the Algarve in many ways, as the beaches are clean and sheltered, and there is a wide selection of eateries, bars, cafes, and shops. Boat trips and kayaking tours are also popular choices in Lagos.

There are plenty of hotels, guest houses, hostels in Lagos, and a central bus station. The only downside to staying here is that it is not close to the airport.

3. Albufeira

Tourist-friendly area with a vibrant nightlife

This is largely the place to head for if you are looking for a lively holiday with a bit of revelry. Albufeira is another former fishing village with long beaches and cliffs. Notably, there is a long strip of bars, clubs, and pubs to check out on your visit.

Despite its popularity, Albufeira has one of the best beaches, with long stretches and clear waters. If you want a change from the beach, though, plenty of other activities are going on, such as diving and boat trips from the local marina. You will also find theme parks, cave tours, jeep safaris, and a spot for dolphin watching.

Although it is bustling and full of either tourists or ex-pats here, there is an Old Town neighborhood with winding, cobbled streets that take you through steep passages.

There are a fair few bars and restaurants in this region and a few budget accommodation options that are much cheaper than those closer to the beach.

4. Tavira

For a more authentic Portuguese experience

Tavira is located in the eastern region of the Algarve, which tends to be less touristy. Here you’ll find a more authentic Portuguese experience backed up by a broad range of hotels, restaurants, and bars, away from the thrall of mass tourism.

Tavira is an excellent spot if you are into nature and wildlife, and on the main beach, it’s not uncommon to spot flamingos and other exotic birds.

This town is also a very scenic and authentic-looking region, from its Moorish Tavira Castle, winding, cobbled streets, and almost 40 churches.

This is a good place for families to stay if they don’t want too much hustle and bustle, and there is a range of accommodations that include resort-style hotels and a few more reasonably-priced guest houses.

5. Carvoeiro

The perfect place for a beach holiday

Golden sea cliffs aback a beautiful stretch of coastline, clear waters, and hidden coves. This is the trademark of Carvoeiro. The horseshoe-shaped bay exudes a distinctly Mediterranean aura vibe which makes this region of the Algarve one of the best choices for anyone whose idea of a beach holiday is centered on relaxation.

The town has a calm and relaxed feel, making it ideal for very young children and older people. Hence Carvoeiro is a very family-friendly resort, especially with its theme parks and water parks, which are, for the most part, a lot less crowded than in some of the other towns.

You can still enjoy hiking and boat trips if you fancy a few more activities, and you’ll also be privy to some of Portugal’s most dramatic and amazing sea views.

The range of accommodation in the area is not that broad. However, you’ll still be able to find something to suit various budgets, and the surrounding villas and summer houses are popular rental choices for many staying in the area.

The public transportation is not very extensive in this area, making it a little challenging to explore surrounding areas unless you rent a car. However, Carvoeiro can be reached by bus from Faro Airport.

6. Sagres

Great for watersports and soaking up some sun

On the extreme west of the Algarve, you can find the somewhat more unique, relaxed, remote beach town of Sagres. If you are seeking an edge to your vacation, this is the place to come for surfing in a wild and rugged natural environment.

There is something of a surfing vibe to the place, which can mean the opportunity to meet other interesting and like-minded people at one of the hostels or guest houses popular with surfers. You’ll encounter a few surfing schools here, too.

So for many, Sagres is primarily a surfing destination, mainly due to the Atlantic swells that crash onto the shores almost constantly. The town has numerous beaches facing different directions, and there are also beaches for relaxing on.

Other visitors come for different reasons, like deep-sea fishing, hiking, and cycling, as this is a rugged, outdoor activity-type destination.

FAQs About Where to Stay in the Algarve

So, Where Should You Stay in the Algarve?

• Faro — One of the oldest areas of Algarve, you will find many historic attractions and architecture in Faro. This area is best for travelers who want to stick to tourist attractions and see as much as possible in a single visit.

• Lagos — Carrying a rich history due to its maritime past, the area of Lagos is ideal for those wanting to spend their days on the beach. You will also be spoiled for accommodation options and food. The only downside is this area is somewhat remote when considering its distance from the airport–make sure you plan accordingly.

• Albufeira — Considered to have one of the nicest beaches in the Algarve, Albufeira attracts nightlife and dining experiences. Bonus, the area offers affordable accommodation options for those traveling on a budget.

• Tavira — The slower pace of Tavira combined with great accommodations make Tavira the ideal home base for travelers who crave some downtime while traveling or for families.

• Carvoeiro —Even more remote than Tavira and sporting a beach as famous as Albufeira, Carvoeiro could be the perfect mix for many travelers, especially families. Just be aware the accommodations are a bit more scarce here, so make sure you book well in advance.

• Sagres — If you are into watersports or looking to go diving, then Sagres is, hands down, the best area for you to stay and mingle with like-minded adventure seekers.

Algarve has so many choices between the lively, the relaxed, and the middle ground in between that pretty much anyone should be able to find a region that best suits their idea of what comprises a holiday. It has much to offer regarding beaches, relaxation, culture, shopping, markets, amazing food, and bursting nightlife.