Portugal’s Algarve region has long been its most popular tourist destination – and Albufeira is a great base from which to explore this magnificent coastline! Once a small fishing village, the town has grown into a major tourism hub – with plenty of entertainment, dining and recreational facilities.
Though a little pricier than other destinations along the coast, it is the most centrally located and offers a little something for everyone.
That being said, the rapid development of the town has resulted in it having a somewhat sprawling feel. It can be difficult to navigate, and it’s important to base yourself in an area that aligns with what you want to get out of your stay.
That’s where we come in! We’ve figured out the five best neighborhoods in Albufeira and categorised them by who they are best for. Whether you want nightlife, beaches or even a little bit of local culture we have you covered.
So let’s dive right in!
Quick Tips – Where to Stay in Albufeira
- Where to stay in Albufeira for your first time – Old Town
- Where to stay in Albufeira on a budget – Montechoro
- Best area to stay in Albufeira for nightlife – Areias de São João
- Coolest place to stay in Albufeira – Albufeira Marina
- Best neighborhood in Albufeira for families – Praia da Oura
- Misericórdia Chapel is the historic centre of the area, and where you can discover the beautiful architecture of the southern coast
- Head to the top of Torre do Relógio and admire views across the entire town, as well as across the sweeping coastline
- Museu Municipal de Arqueologia is one of the largest archaeological exhibitions in the entire country – perfect for families
Table of Contents
- Where to Stay in Albufeira
- Albufeira Neighborhood Guide
- Albufeira 5 Best Neighborhoods to Stay in
- #1 Old Town – Where to Stay in Albufeira for Your First Time
- #2 Montechoro – Where to Stay in Albufeira on a Budget
- #3 Areias de São João – Best Area to Stay in Albufeira for Nightlife
- #4 Albufeira Marina – Coolest Place to Stay in Albufeira
- #5 Praia da Oura – Best Neighborhood in Albufeira for Families
Looking for a specific place to stay? These are our highest recommendations for places to stay in Albufeira.
Best Hostel in Albufeira: Rich & Poor Hostel Albufeira
This historic hostel, right in the Old Town, is the perfect choice for backpackers that want something a bit more beyond the usual tourist experiences in Albufeira! Whilst only a short walk away from the bars and beaches, it also has a traditional feel that allows you to soak up the authentic Portuguese culture.View on HostelWorld
Best AirBnB in Albufeira: Purple Flat
This lavish flat is a truly unique apartment in the heart of the most budget-friendly neighborhood in the town! It comes with one bedroom, however, there is also a pull out sofa bed in the lounge. The kitchen is well equipped, and the reviews for the apartment are fantastic. The host also has superhost status.View on Airbnb
Best Hotel in Albufeira: Muthu Clube
Whilst this four star resort is on the pricey end, the fantastic facilities and beachfront location make it absolutely worth it! Each room comes with a balcony overlooking the coastline, and guests are able to access the beach within seconds. They also have swimming pools and regular events.View on Booking.com View on HotelsCombined View on Agoda
Quick Summary: The Best Places to Stay in Albufeira
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Areias de São João
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The Algarve is one of the warmest regions in Europe year-round, making it a perfect place to kick back and relax – whether you want to spend your whole trip by the beach, or simply want somewhere relaxing to stop for a few nights as part of a larger trip.
Albufeira is well connected to all of the towns along the coast and is only a short train ride from Lisbon – as well as further afield in the Andalusia region of Spain. If you want to get to know the Algarve, this is the best place to start.
Whilst it is a sprawling tourist hub nowadays, much of the towns fishing roots can still be experienced in the Old Town! This neighborhood is packed with carefully restored buildings that tell the story of the region’s past, as well as its place in modern-day Portugal.
The Old Town provides a great introduction to the region for first-time visitors
Despite this, the Strip is the most popular area with tourists. Stretching from Praia da Oura to Montechoro, it has an eclectic mix of smaller neighborhoods waiting to be discovered. Areias de São João, right in the heart of the Strip, is a buzzing nightlife area that attracts party-goers from all across Europe.
Montechoro, just north of São João, has some more reserved nightlife options and is generally considered the most budget-friendly area in the city. Praia da Oura, on the other hand, has a more calm and coastal vibe – perfect for families.
Over on the other end of the Old Town is the Marina area! This is a relatively new neighborhood, tourism wise, but has a cool feel and gorgeous multi-colored buildings that lend it a creative atmosphere.
Still not convinced? Don’t worry, we have some more in-depth guides about each neighborhood below!
Albufeira 5 Best Neighborhoods to Stay in
Let’s take a look, in more detail, at the five best neighbourhoods in Albufeira. Each caters to different interests, so be sure to pick the neighbourhood that’s right for you.
Albufeira’s Old Town is a great starting point for those more interested in discovering the unique culture of the region! As the name suggests, this is where you will find some of the oldest architecture, as well as a whole host of attractions dedicated to the long-standing traditions of the town.
Though Albufeira has grown a lot from its days as a small fishing village, much of this atmosphere still exists in the Old Town area! Surprisingly low on tourists compared to other areas of the city, it is the perfect spot to sit back, relax and soak up the sun whilst enjoying the local culture.
Things to See and Do in Old Town
– Praia dos Pescadores is a gorgeous introduction to the beautiful beaches that line the Algarve coast and has plenty of great recreational facilities
– Praia dos Alemães, on the other hand, is a bit more laid back – less popular with tourists, though still beautiful, it’s the place to be if you want to unwind
– Misericórdia Chapel is the historic centre of the area, and where you can discover the beautiful architecture of the southern coast
– Head to the top of Torre do Relógio and admire views across the entire town, as well as across the sweeping coastline
– Museu Municipal de Arqueologia is one of the largest archaeological exhibitions in the entire country – perfect for families
– Most of the best restaurants in the area are close to Largo Cais Herculano – we recommend Cabana Fresca for their typical Portuguese plates
Best Hostel Old Town: Rich & Poor Hostel Albufeira
As the best-rated hostel in Albufeira, this is an excellent choice for backpackers on their first trip to the city! A homemade breakfast is included in the rate, as well as light snacks available throughout the day. They also have excellent social facilities where you can mingle with other guests.View on HostelWorld
Best AirBnB in Old Town: Albufeira Centro
Though a fairly small studio apartment, this Old Town accommodation comes with four beds – perfect for families and groups visiting the town! It comes with a small kitchen that includes a microwave, as well as full air-conditioning. The host has been awarded Superhost status, guaranteeing quality.View on Airbnb
Best Hotel in Old Town: Rocamar Exclusive Hotel & Spa
This four star hotel is adults only – perfect for solo travellers and couples that want to get away from the busy family resorts along the Strip! Though fairly pricey, it nevertheless has excellent service standards and a wide range of facilities to make up for it. Rooms come with private balconies.View on Booking.com View on HotelsCombined View on Agoda
Just north of the main nightlife area, Montechoro is a great choice for those wanting to stay close to the major tourist areas without breaking the bank! Montechoro also has some nightlife options in its own right – especially for those interested in something a little more laid back and with local character.
This easy-going area is experiencing a bit of a tourist boom at the moment, giving it a young and hip atmosphere! It is particularly popular with backpackers and digital nomads that want a base away from the main tourist strips. This has resulted in a great social scene, as well as some high-quality restaurants and cafes.
Things to See and Do in Montechoro
– Montechoro Strip is this neighborhood’s section of the main road running through the city and contains some great bars and restaurants
– Speaking of great bars, the Albufeira Pub Crawl starts in this area next to the strip – great for mingling with other visitors and discovering local nightlife
– Stones Bar, in particular, is a very popular nightlife venue – they have themed club nights, and great prices on drinks
– Need to unwind? Hoya Instituto is a great spa and leisure facility offering a range of holistic therapies and beauty treatments
– Hop on board the Almerinda Tuk Tuk – an interesting and fast-paced way to get around the town and discover its main sights
– There are plenty of great restaurants in the area, however, we recommend O Manel dos Frangos for their fantastic barbecue dishes
Best Hostel Montechoro: Albufeira Lounge Hostel
Though quite far out from the town centre, Albufeira Lounge Hostel is the cheapest backpacker accommodation in the town! Despite the low price, they also offer fantastic levels of service and have great social facilities throughout. There is an outdoor pool on-site, as well as excellent barbecue facilities.View on HostelWorld
Best AirBnB in Montechoro: Purple Flat
Though quite quirky, this flat has interesting décor that uses the color purple to its advantage. Right in the heart of Montechoro, this is a great choice for those that want to really explore the surrounding area! It is also well connected to the town centre by regular bus connections right outside the front door.View on Airbnb
Best Hotel in Montechoro: Choromar Apartments
Choromar Apartments is a large resort right in the heart of Montechoro! With five swimming pools, an extensive bar and great spa facilities, this is definitely a great pick for those simply wanting a relaxing poolside holiday in Southern Europe. It is also popular with families looking to save some cash.View on Booking.com View on HotelsCombined View on Agoda
Located along the busiest part of the Strip, Areias de São João is the place to be to discover Albufeira’s bustling nightlife! Whilst there are plenty of great nightlife options in other towns along the Algarve, the bars and clubs in São João are by far the most popular – perfect for partygoers and large groups visiting the area.
During the say, São João is a bit sleepier in nature – however, it is within close proximity of the Old Town, Montechoro and Oura, giving you easy access to most of the main attractions! There are also some excellent, if somewhat low-key, dining establishments across the area showcasing international and Portuguese cuisine.
Things to See and Do in Areias de São João
– Kiss is the biggest nightclub in the area, located on Rua Vasco da Gama, with three floors playing different kinds of music
– Liberto’s, however, is the most popular due to its location right on the strip – a bit more intimate, but well worth it if you can get in
– Head to Albufeira Shopping, the largest mall in the city – it contains high street and upmarket brands, and connects São João with the Old Town
– If you’re more interested in a laid-back nightlife option, Sunset on the Strip has easy-going music and cheap cocktails
– The Market Restaurant uses fresh ingredients from the local area and shores, giving you a truly Portuguese experience
– Johnny Hooper’s Mediterranean Bistro has some great pan-European cuisine, as well as live music for a vibrant atmosphere
Best AirBnB in Areias de São João: Dinita Apartamentos
This small studio is located in a typical Portuguese housing complex, allowing you to experience the local culture during your stay! Though fairly basic, it is well maintained and comes with fantastic reviews – all of which have contributed to the host gaining superhost status. High speed WiFi is included.View on Airbnb
Best Hotel for Backpackers Areias de São João: Vilanova Resort
Whilst there aren’t any hostels in São João, Vilanova Resort is a budget-friendly holiday park that caters to all kinds of guests! As a holiday park, it comes with plenty of excellent social facilities where you can mingle with other guests. There is also a pool and even some tennis courts.View on Booking.com View on HotelsCombined View on Agoda
Best Hotel in Areias de São João: Solar de São João
This large aparthotel gives you the best of both worlds – you can enjoy the added privacy of apartments whilst still benefiting from the perks of staying in a hotel! Units come with their own kitchenettes, which include microwaves and refrigerators. There are also balconies in every room, providing you with views towards the coast.View on Booking.com View on HotelsCombined View on Agoda
Albufeira Marina is one of the newest neighborhoods of the city in terms of tourism, but is fast becoming the hippest place to be! It is known for its colorful buildings that line the waterfront, as well as the lavish bars and restaurants across the neighborhood. The Marina is a great area for couples wanting to stay in the town.
It is much more peaceful than the Old Town, but still maintains an authentic charm that allows you to see a more real side of Portuguese culture! There are also some great watersports and boat hire companies in the area where you can enjoy the Algarve coast from the sea itself.
Things to See and Do in Albufeira Marina
– Portugal Sail and Power, based just above the marina itself, as affordable sailing lessons providers – perfect for those that want a little taster session
– If you’d rather let someone else take the wheel, Alzirinha Albufeira offer boat tours of the coast in Albufeira and surrounding towns
– Ermida de Nossa Senhora da Orada is the main church in the area, and a great starting point for a walk around the neighborhood’s colorful buildings
– Easydivers Dive Centre offer a variety of scuba diving and snorkelling packages for both beginners and seasoned divers
– Sharky’s Bar is the only major nightlife venue in the area – but it still comes with fantastic reviews, great prices and a good wine selection
– Tasca Portuguese is a must visit restaurant for those wanting to sample typical Portuguese cuisine right by the marina
Best Hostel Albufeira Marina: Casa dos Arcos
The gorgeous Casa dos Arcos is the first boutique hostel in Albufeira, and is perfect for those that want a more upmarket experience! Though technically in the Old Town, it is only a short walk away from Albufeira Marina – giving you easy access to both neighborhoods. A continental breakfast is included.View on HostelWorld
Best AirBnB in Albufeira Marina: Views of the Marina
As the name says, this apartment comes with mesmerising panoramas of Albufeira Marina! Part of Airbnb’s Plus range, this apartment is a bit more on the luxury end – but absolutely worth the price for those wanting to upgrade their stay. This ultra-modern apartment also comes with pool access.View on Airbnb
Best Hotel in Albufeira Marina: Hotel Maritur
Hotel Maritur is another great adults only hotel which, combined with its location in the stylish Marina neighborhood, makes it an excellent choice for couples visiting the town! It comes with indoor and outdoor swimming pools, as well as private balconies in every room with views across the coast.View on Booking.com View on HotelsCombined View on Agoda
Right on the coastal end of the Strip, Oura is more known for its luscious coastline than it is for its nightlife. This makes it a fantastic choice for families that want to discover the main attractions in the city whilst avoiding the rowdy nightlife of the busier areas! There are also plenty of family-friendly attractions across the neighborhood.
Praia da Oura, the beach in the south of the area, in particular, is a serene location with plenty of excellent facilities and restaurants! There are a few great tour companies based in the area, giving you the opportunity to take a guided visit to other interesting destinations along Portugal’s southern coast.
Things to See and Do in Praia da Oura
– Praia da Oura itself is an excellent attraction – there are some great water sports facilities along the beach that also offer child friendly experiences
– Zebra Safari Tours offer the perfect tours for those with young kids – designed with families in mind, this is a great way to see local wildlife
– Garrafeira Ourawineshop is one for the adults, but they offer some fantastic Portuguese wines in bottles that you can take home
– XFlow Surf Spot Portugal is another great family friendly attraction – this small waterpark has some great slides, and is very popular during the summer
– Hire a scooter with Captain Scooter or take in the winding hillsides of Algarve on one of their unique scooter tours of the region
– Restaurante Vivaldo’s is located right on the beach – giving you magnificent views of the coast to pair with their typical Portuguese cuisine
Best Hotel for Backpackers Praia da Oura: Quinta Pedra dos Bicos
Quinta Pedra dos Bicos is a collection of fully serviced apartments that offer budget friendly rates! This makes them a great choice not just for backpackers, but also for young families that want to stick to a budget. Private beach access is included for guests, as well as some swimming pools.View on HostelWorld
Best AirBnB in Praia da Oura: Apartment on the Beach
This huge apartment can sleep up to five people – perfect for families visiting the town! It is located right in front of the beach, and also has its own private pool area if you want some peace away from the crowds. Free high speed WiFi is included, as well as free private parking.View on Airbnb
Best Hotel in Praia da Oura: Muthu Clube
This four star resort truly epitomises everything that makes Albufeira an attractive holiday destination! It has immediate beach access, great views across the ocean and even a well-rated restaurant on-site. They have multiple pools available for guest use, as well as a beautiful garden for when you want to unwind.View on Booking.com View on HotelsCombined View on Agoda
Final Thoughts on Where to Stay in Albufeira
Albufeira is a beautiful destination for those wanting a beach holiday in Southern Europe! Even for backpackers, it has some interesting cultural attractions that provide a unique insight into Portuguese life.
For the best area, we have to go with Montechoro! Not only is it the most budget-friendly, but it also combines great nightlife with an excellent dining scene, intriguing cultural activities and easy access to the town centre.
Nevertheless, all of the neighborhoods mentioned in this guide have their pros, and it really depends on what you want to get out of your stay. We hope this guide has helped you to plan your itinerary for your trip!
Did we miss anything? Let us know in the comments!
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Writer and Editor, Ana Pereira is a California native, inspired by Earth exploration and introspection. Recently, she spent several months exploring Africa and South Asia. She spends most of her “down-time” out in the wilderness, climbing, hiking, and beyond, and is feverishly passionate about travel and health.