Where to Stay in South Portugal: My Favorite Spots in the Algarve

A guide to the best hotels where to stay in South Portugal

When I think of South Portugal, I picture sun-soaked cliffs, whitewashed towns, and waves echoing through hidden coves. 

My time when I travel Algarve feels like a dreamy escape where I can fully be part of the nature and culture of that magical place. 

Whether you’re chasing luxury or just looking for a quiet corner by the sea, this region has the best accommodations. 

I put together this guide based on my own wanderings—ideal if you’re wondering where to stay in South Portugal and want to make the most of your trip.

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Psssst…!!?? You can’t get enough of Algarve? Have a look at my other posts:

Overview: My favorite hotels in South Portugal

1. Albufeira: The Life of the Party (and the Beach)

Albufeira has this contagious energy. It’s where the coast meets a buzzing atmosphere—perfect for anyone who loves beach life and busy evenings. 

The old town is a colorful maze of restaurants and bars, and the golden beaches stretch for miles.

One of my top picks here is Pine Cliffs Resort—set dramatically on the cliffs, it’s a stunning place to relax in style.

For something more low-key and design-forward, Hotel California is stylish, adult-only, and just steps from the action. 

On a budget? Albufeira Beach Apartment offers simple comfort near the shoreline, making it easy to enjoy the city without splurging.

If you’re looking for the best accommodation in Albufeira, you’ve got great choices at every price point.

Budget

Hostel DP Albufeira

Vila Recife Hotel

Suites & Beds DP Albufeira

Casa dos Arcos – Charm Guesthouse

Mid-range

Cerro da Marina Hotel

Luna Solaqua

The Patio Suite Hotel

Alfagar Cerro Malpique

Luxury

EPIC SANA Algarve Hotel

Grande Real Santa Eulalia Resort & Hotel Spa

Vila Joya

W Algarve

2. Vilamoura: Where Class Meets Coastline

Vilamoura feels polished and peaceful, with its sailboat-dotted marina, golf courses, and elegant vibe. 

It’s where you can sip wine by the water one minute and find yourself on a quiet beach the next.

The Anantara Vilamoura Algarve Resort sets the bar high—it’s sleek, serene, and perfectly tailored for a high-end escape. 

I also love The Lake Resort, which has a more natural aesthetic and tranquil grounds that make you feel worlds away from daily life. 

If you’re traveling with a more modest budget, Dom Pedro Vilamoura offers solid comfort right near the marina.

When people ask me where to stay in Vilamoura, I say: if you want luxury without the noise, this is your spot.

Budget

Hotel Apartamento do Golfe

Hotel Praia Sol

Prado do Golf

Solgarve

Mid-range

Luna Olympus

Dom Pedro Portobelo

Hotel Apartamento do Golfe

Parque Mourabel

Luxury

Anantara Vilamoura Algarve Resort

Tivoli Marina Vilamoura

Crowne Plaza Vilamoura

Domes Lake Algarve

3. Lagos: Soulful and Scenic

Lagos might just be my favorite town in the Algarve. There’s something special about the way history and charm merge with dramatic ocean views. 

You can stroll the old city walls, then watch the sunset from a cliffside trail—all in the same afternoon.

Belmar Spa & Beach Resort is a great place to relax after a day of exploring. It’s located close to Praia dos Três Irmãos and has spacious suites with a vacation-home feel. 

Cascade Wellness Resort is another standout—perfect for wellness, privacy, and beautiful design. 

Casa Mãe Lagos is truly unique, stylish, locally rooted, and full of personality and a top place where to stay in Lagos. 

Lagos is a wonderful option if you’re trying to decide where to stay in South Portugal with both beauty and soul.

Budget

Casa Augusta

Sunny House

Lagos Charming Villas

Blue Door Lagos

Mid-range

Carvi Beach Hotel

Dom Pedro Lagos

Hotel Mar Azul

Solar de Mos Hotel

Luxury

Cascade Wellness Resort

Palmares Beach House Hotel

Lagos Avenida Hotel

Belmar Spa & Beach Resort

4. Faro: Quiet Culture and Natural Wonder

Faro often gets overlooked, but it’s such an underrated treasure.

It’s a calm, authentic city where history peeks around every corner, and the nearby Ria Formosa wetlands are a dream if you love nature and birdwatching.

Just outside Faro, I found Pousada Palacio de Estoi, a former palace transformed into a peaceful escape, complete with gardens and historic charm. 

In the city center, Hotel Faro & Beach Club is modern and lively, with a rooftop pool and great views over the marina. 

Want something affordable but well-located? Cerro Da Marina Hotel is a sweet, no-fuss option in the heart of town.

If you’re wondering where to stay in Faro, it’s ideal for those who love laid-back vibes, fewer crowds, and a little cultural depth.

Budget

Hotel Alnacir

Hotel Made Inn Faro

Residencial Condado

Guest House São Filipe

Mid-range

Hotel Sol Algarve

Stay Hotel Faro Centro

Aqua Ria Boutique Hotel

Faro Boutique Hotel

Luxury

3HB Faro

AP Eva Senses

Opus One Luxury Guesthouse & Wine

Pousada Palácio de Estoi

My bottom line of where to stay

South Portugal has a personality for every kind of traveler with its vibrant Albufeira beaches and Faro’s peaceful charm. 

Whether you want a luxe resort or a cheap place to stay in the Algarve, you’ll find an option that feels just right.

Personally, I think it’s one of the most beautiful places in Portugal—maybe even in Europe.

If you’re planning to visit the southern coast, this region is one of the most beautiful cities in Portugal to explore (yes, some of the towns feel like little cities!). 

I hope this guide helped you find the best places where to stay in South Portugal—and maybe even inspired a new dream trip.

FAQ about hotels in Southern Portugal

Hola! I’m Paulina, a seasoned travelette who crossed the Atlantic Ocean by Boat HitchHiking. On my blog, find expert insights for an extraordinary holiday through outdoor and sustainable travel like hiking, cycling, and sailing. Let’s embark on unforgettable journeys together! 🌍🚀