Where to stay in Algarve: 10 best towns

Portugal's southernmost region, the Algarve, is home to Moorish architecture, charming fishing villages and idyllic Atlantic beaches along stretches of rugged coastline. Here is our guide to the best towns where to stay in Algarve.
Praca Luis de Camoes square in Lagos, Portugal. Photo: Alvaro German Vilela/Shutterstock
Praca Luis de Camoes square in Lagos, Portugal. Photo: Alvaro German Vilela/Shutterstock

Last updated: 30 May 2023

The information in this article is inspired by The Inside Guide tp Portugal - your essential guide for visiting Portugal.


Faro, the provincial capital of the Algarve, has a greater concentration of culture and historic monuments than any other town or city in the region. Forming a grand entrance to the circular old town, the 19th-century Arco da Vila consists of a grand arch and bell tower. 

Beyond the arch, you will find a maze of cobbled streets, one of which leads up to the splendid expanse of the Largo da Sé (Cathedral Square), a quintessential Portuguese plaza best explored in the evening when floodlit and free of cars. 

Across from the harbor is the main town. At its center is the Jardim Manuel Bivar, which was built in the 15th century as Queen’s Square. It is a popular meeting place, lined with plenty of wine bars and restaurants. 

Rua de Santo Antonio is the main thoroughfare; at its far end the Museu Etnográfico Regional do Algarve (Ethnographic Museum) displays artworks and artifacts, as well as selling delightful local handicrafts. For those staying longer in town, take a day trip on a catamaran to the beautiful islands of Farol and Deserta. 

If you're planning to bed down in Faro, consider the Eva Senses Hotel, or – if you're prepared to splurge – overnight at the luxurious Pousada Palacio de Estoi - Small Luxury Hotels of the World

Sunset over the town of Faro, PortugalSunset over the town of Faro, Portugal. Photo: Shutterstock


The historic fishing town of Olhão was built in the Moorish style and retains a large working fishing port. Over the years it has made few concessions to tourism and so remains full of character. 

On the seafront, you will find the town’s modern market halls. The Olhão fish market is one of the best in the Algarve. Arrive early to see it in full swing. Locals hawk fresh seafood at the tops of their voices, while slithery hills of fish reel in the punters. 

Boats and ferries run from the dock to the beautiful nearby beaches and islands, like this hop-on hop-off tour to Deserta, Farol and Culatra. For those that value privacy, there's private boats available as well, which will allow you to discover the beaches without the crowds. 

Architectural sights in the town include the Parish Church and Nossa Senhora do Rosário, which is set in the winding narrow backstreets on the way to Olhão's main square, Praça da Restauração, where locals gather to while away the evenings. Climb up the bell tower to take in gorgeous views over the town.

Real Marina Hotel and Spa is Olhão's leading hotel and the best choice for those planning to stay in town. 

On this Inside Guides trip to Algarve, you will experience and discover the real Algarve – taste local produce, drinks and traditional dishes, visit heritage sites and participate in culinary activities.

Outdoor view of the typical architecture of the cubist city of Olhao, Portugal. Photo: Shutterstock


Tavira is one of the true jewels of the Algarve. One of the region’s most historic cities, its Moorish, Reconquista and Renaissance roots are clearly visible today, especially in the town's numerous churches.  

The 11th-century Castelo de Taviralocated in the middle of the old quarter, was a defensive structure built by the Moors. Climb the castle walls for superb panoramic views over the city and down to Santa Maria do Castelo church, which dates from the 13th century, and in all likelihood occupies the site of the town’s old mosque. 

Just down the hill from the Castelo, near the river, the beautiful 16th-century church, Igreja da Misericórdia de Tavira, is a spectacular Renaissance building with an 18th-century interior featuring lovely blue azulejo ceramic tiling and fine gilded woodwork. 

A walk down Rua da Liberdade – Tavira's main street – takes you past some impressive 16th-century mansions; alternatively, take a guided tuk-tuk tour to explore the town. 

Just minutes from the Roman bridge lies the 16th-century St. Augustine Convent, now Tavira's most sought-after accommodation, the Pousada Convento de Tavira

Tavira, one of the the Algarve's most attractive townsTavira, one of the the Algarve's most attractive towns. Photo: Shutterstock

Castro Marim

This little town is one of the Algarve's oldest and most historically significant. For five centuries its primitive castle-fortress was occupied by the Moors. After the Christian Reconquest, it became the home of the new Military Order of Christ in 1319. Opposite on the hill stands a fort dating back to 1641. 

The former fortress town rises from the flat wetlands where migratory birds such as storks, cranes and flamingos and hundreds of different species of plants thrive. 

A conservation area of 2,000 hectares is protected as the Reserva Natural do Sapal, with privately guided tours available. From here, the peaceful road along the Guadiana River stretches through golden-coloured hills that are dotted with olive and fig trees.

A little bit outside of the center, but directly on the beach, lies Hotel Vasco da Gama; the best rooms have wonderful sea views.

View of Castro Marim village - church and San Sebastian fort. Photo: Shutterstock


The principal resort in western Algarve, Lagos is a pleasant beach town. By night Lagos is lively, with outdoor restaurant terraces and bars lining narrow streets attracting a chic crowd. By day, it combines a rich historical past with a busy present. Attractive beaches and a lovely coastline are within easy reach of the town. 

The walled city is divided from the port by Avenida dos Descobrimentos. The restored fortress at the end of the avenue, Forte da Ponte da Bandeira, guarded the entrance to the harbour in the 17th century. 

Climb the city walls for fine views of the port and out to sea. The main street on Lagos, Rua 25 de Abril, is packed with bars, restaurants and antiques and ceramic shops. Be sure to sample the delicious Portuguese cuisine, for example on a guided tour for different tasting spots

Lagos has many great accommodation options, from friendly harbor-facing Marina Rio to Tivoli Lagos in the city center. 

Stunning coastline near Lagos, Portugal.Stunning coastline near Lagos, Portugal. Photo: Shutterstock


One of the most picturesque settlements in the region is the lovely, flower-laden village of Alte, a graceful settlement lying at the foot of hills and clustered around a parish church. Visitors enter the village by crossing a small, white bridge over a babbling stream that runs through the town. 

The architectural highlight of the village is the 16th-century Igreja Matriz churchwhich contains elaborate chapels and rare 16th-century azulejo tiling from Seville. The rest of Alte is the Algarve of postcards: whitewashed houses with colorful windows and red-tiled roofs lining narrow streets.

You will start this Inside Guides journey to the Highlights of Portugal in Porto, the Invicta City, to then discover the landscapes of Douro Valley. Next, there is Lisbon, the capital of Portugal, a city filled with history and stories. Lastly, you will arrive to the Algarve, a place where you will connect with the sea, traditions and nature.

 Alte village and Nossa Senhora da Assunçao Church, Algarve, Portugal. Photo: Shutterstock


With only a relative smattering of hotels, restaurants and tourist facilities, the coastal town of Sagres - the surfing capital of Algarve - has a remote, undiscovered feel. The main attraction here is the Fortaleza de Sagres (Sagres Fortress), which was used by Henry the Navigator in the 15th century and offers panoramic coastal views from its rocky promontory location.

The town has a working harbor where small fishing boats bob and larger vessels haul in daily catches of lobster and mackerel. A cluster of restaurants around the harbor boast impressive views, while inland, the pleasant Praça da República square is ringed by relaxed nightspots. 

The best beaches near Sagres include sheltered Mareta and unspoilt Tonel. This is also where some of Sagres' best hotels lie, such as the Mareta View Boutique Bed and Breakfast and the Memmo Baleeira Design Hotels

The stunning coastline is the ideal setting for some beach adventures: swimming in caves, jumping from cliffs, or climbing and walking the paths. This natural park has plenty of opportunities for the adventurous souls. 

A lighthouse near the town of Sagres, PortugalA lighthouse near the town of Sagres, Portugal. Photo: Shutterstock


Silves is the former Moorish capital of the Algarve. Eight centuries ago, the town was filled with palaces, gardens, and bazaars, all of which presided over by a sprawling red sandstone, hilltop fortress. Silves Castle sits on ancient foundations but was constructed following the Christian Reconquest, though it preserves distinctly Moorish details. 

From its towers and battlements there are fine views over the town and surrounding countryside encompassing expansive orchards of fruit trees. If you want to get the true feeling of living in an Arab castle, consider Hotel Colina dos Mouros, situated in a former castle overlooking the town. 

Next to the castle, the imposing Gothic Silves Cathedral was built on the site of a mosque in the 13th century by the liberating crusaders. Nearby, the Museu Municipal de Arqueologia (Archaelogical Museum) houses an impressive collection of archaeological artifacts and exhibits, including an 18-meter-deep medieval well that visitors can climb down. 

Silves can also be explored on a day tour from Lagos, paired with an Algarve wine experience at a private estate. 

Portugal offers many highlights but when you're short on time, this Inside Guides trip is ideal to cover all the highlights: the capital city of Lisbon, historic Porto, lush Douro Valley and the stunning beaches of the Algarve are all part of this trip.

Silves - historic town in Portugal. Photo: Shutterstock


Portimão is an important fishing port renowned for its restaurants that specialize in grilled sardine dishes – many of these restaurants can be found at the dockside. Portimão is also one of the best towns on the coast for shopping. 

The pedestrianized town center is filled with shops, and a food market is often set up in the town square. Shopping malls and outlets around the town offer traditional crafts and locally made items. The town is also known as a starting point for boat trips to explore one of the most beautiful caves in the world: the Benagil cave. 

The town itself was badly damaged by a 1755 earthquake and consequently there are few buildings of historical consequence. Largo 1º de Dezembro is a 19th-century park with 10 splendid blue and white azulejo benches, each illustrating a pivotal event in Portuguese history. 

The town's museum, Museu de Portimão, set in a former cannery on the banks of the Arade River, showcases the region's sardine fishing and canning tradition, as well as displaying some fascinating underwater archaeological finds.

Situated directly on the beach, Hotel da Rocha offers contemporary rooms with beach or land views, only a few kilometers from the city center. 

The marina at Portimão.The marina at Portimão. Photo: Shutterstock


Loulé is a regional produce center with a large Saturday market, which is known for its leather, lace, and copper goods, and charming outdoor cafés. There are actually two markets in Loulé: fresh produce, including fish, is sold in a mock-Moorish hall, while the 'gypsy market' is held towards the opposite end of the boulevard. 

Just below the permanent market halls, on the main Praça da República square, you will find a well-preserved section of medieval castle walls. Set within the castle remains is an interesting local museum. 

Also worth visiting here are the Igreja Matriz, a 13th-century Gothic church with 18th-century azulejo tiling, the Convento da Graça, with its terrific Manueline portal, and the Ermida de Nossa Senhora da Conceição, a small church prized for its Baroque altar and ceramic tiles.

Surrounding Loulé are many vineyards, like the renowned Quinta da Tôr winery, offering not only wine tastings but also insights into its history and the wine-making process. 

Outdoor view of the water fountain of the city of Loule, Portugal. Photo: Shutterstock

Ready to explore the Algarve and beyond?

Our sample itinerary, Coastal Portugal, curated by our carefully selected local expert in Portugal, gives you an idea of what's possible with Insight Guides Tailor-Made Trips. The local experts we partner with live and work in the destinations they serve, and are able to create, book, and execute trips that truly fit your preferences and wishes. No two trips are the same and every one of our existing itineraries can be fully tailored to suit your wishes – alternatively, simply get in touch to let us know your ideas for the trip and when you would like to travel. We'll do the rest. 

Updated 27 October, 2020