Portugal is one of my favourite countries on the PLANET. Without a doubt.
I fell in love when I had my first pastel de nata in Lisbon. I fell in love again when I saw Sintra for the first time. Then I went home… And I came back to fall in love again and again.
Portugal is just one of those places that can dazzle you from North to South. The cities are vibrant, full of culture, music and art, the coast is delightful, and the Portuguese people are some of the most welcoming and laid-back I’ve ever met in my travels.
But deciding where to stay in Portugal can be a daunting task. You’ll want to choose places that resonate with you and what you want to get out of your trip.
Today, I’m going to help you to navigate the areas of Portugal based on my experience in the country. Hopefully you’ll find what suits your travel desires, no matter if you want to party the nights away, get lost in beautiful cobblestone streets, or relax in some of the best beaches in the world.
Vamos?
Image: Nic Hilditch-Short
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Portugal Neighborhood Guide – Best Places to Stay in Portugal
Lisbon
Lisbon is one of those cities that requires no introduction these days. It is POPULAR, and with good reason.
Faro
Faro is one of the best places to stay in the Algarve, which is the southernmost region of the country. It’s a gorgeous, coastal city that’s surprisingly laid back.
Sao Miguel Island in the Azores
If you’re heading to São Miguel Island, could you please take me with you?! This place is unbelievable. I can assure you that you’ll find yourself opening your mouth in awe as you traverse the island.
Sintra
Sintra is unlike anywhere else in Europe and it also makes my list of the most beautiful places in Portugal.
Lagos
Located on the Southwestern tip of Portugal, Lagos is an interesting mix between beautiful nature and potentially rowdy vibes in the center.
Madeira
Ahh, Madeira… an adventurer’s paradise. This special island is technically in Portugal but is in fact on an island located off the coast of Africa.
Porto
It’s no secret that Porto is the best city to stay in Portugal to enjoy great wine! Porto, on Portugal’s Northwest coast, is where port wine was invented but there are plenty of other varieties available.
Portugal’s 7 Best Places to Stay in
A trip to Portugal is one of the best things you can do to your life, but within the country there are several hubs that could help shape your trip up in a different way.
From modern city hubs to fairytale-like nature getaways, your only trouble will be deciding how much time to allocate to each! The goal of this article is to help you make these difficult decisions.
So, fellow traveller, let me guide you through my top eight places I visited while backpacking in Portugal.
1. Lisbon – Overall Best Place to Stay in Portugal
Lisbon is one of those cities that requires no introduction these days. It is POPULAR, and with good reason. It’s one of the prettiest cities I’ve ever been to for sure, and it’s got a wide array of urban art, world-class nightlife, museums, and great food that will conquer just about anyone.
It’s a beautiful blend of old and new, where ancient trams share the streets with buzzing bars and an incredible food scene. Don’t miss the viewpoints in Graça, the castle, the Belém Tower, and the Padrão dos Descobrimentos. Oh, and eat some pastéis de nata while you’re at it! They will soon become your favourite snack.
- Best For: First-timers, city explorers, culture + nightlife
- The Vibe: Vibrant, historic, creative, slightly chaotic in a fun way
- Proximity to Airport: ~30 minutes from Lisbon Airport, depending where you stay
- Transport Level: Excellent. Trams, metro, trains, very walkable (hilly though)
- Budget: $$–$$$$ (wide range but getting pricey in central areas)
- Crowds: Busy year-round, especially in summer and central districts
Image: Nic Hilditch-Short
Top Things to Do in Lisbon
- Ride the infamous city tram.
- Visit the historic Castelo de São Jorge that towers over the city.
- Climb to the top of the Panteão Nacional.
- See the Belém Tower and get some pastéis de nata at Pastéis de Belém!
- Go shopping at Feira da Ladra markets (every Tuesday and Saturday).
- Head over to Costa de Caparica to surf some waves!
- Walking the city is a must, join this Lisbon walking tour to learn as you stroll.
Best Hotel: Masa Hotel
Hotels in Lisbon can be quite expensive, especially in the busier areas, so it helps to be a little strategic about it. This one is located in a quieter part of town, though with excellent transport links, so you’ll still be within easy reach of all the main sights and your wallet will thank you. Rooms are spacious, modern, and well-equipped, and the hotel comes with solid perks like a fitness centre, sauna, and optional breakfast. A very strong option all around.
Best Hostel: Yes! Lisbon Hostel
This backpacker hostel nails the social vibe without trying too hard. The nightly family-style dinners are a highlight and make it ridiculously easy to meet people, while the bar crawls and games keep things going well into the night if that’s what you’re after. Location-wise, it’s in the heart of downtown which makes it so easy to wander around town! Bonus points for not being on top of one of the city’s crazy hills.
Best Airbnb: Central Flat with a View
When you’re in Lisbon, you’re gonna want to stay at an epic place. Here, you’re situated in the heart of the Baixa and Rossio neighbourhood. You’ll also be just a quick walk to the historic Alfama district, to the waterfront, and Praça do Comércio. You can’t beat this Central Flat with a view in Lisbon.
Best Apartment: 2 Bedroom Apartment in Principe Real
This two-bedroom apartment is just a five-minute walk from Bairro Alto and drips with charm. It is a two-bedroom apartment with three beds, which makes staying with friends a breeze.
There is a fully equipped kitchen, speedy wifi, and all the amenities you could need. There’s also a tram and metro station nearby. You’ll love the huge bathroom, too!
2. Faro – Best Place to Stay in Portugal for Families
Faro is one of the best places to stay in the Algarve, which is the southernmost region of the country. It’s a gorgeous, coastal city that’s surprisingly laid back. The old town is a treat to wander, with cobblestone streets, a 13th-century cathedral, and a Municipal Museum housed in a 16th-century convent.
It sits right at the corner of the Atlantic and the Cadiz Gulf, so staying close to the beach is the move if you want to make the most of it. While it is nice to stay a little inland, you might find life more relaxing in a house or villa near the beach.
- Best For: Families, beach lovers, relaxed coastal stays
- The Vibe: Laid-back, sunny, coastal charm with a local feel
- Proximity to Airport: ~20-30 minutes from Faro Airport
- Transport Level: Walkable centre, car useful for beaches/exploring
- Budget: $–$$$ (good value outside peak summer)
- Crowds: Moderate most of the year, busy in summer
Photo: @danielle_wyatt
Top Things to Do in Faro
- Check out the bone chapel at the Igreja do Carmo.
- Stroll through the quaint old town and find the entrances.
- Enjoy a walk around the marina and harbour.
- Hunt out the quirky street art.
- Pop into the Maritime Museum.
- Climb to the top of the Cathedral to soak in the views.
- Jump on an expedition along the coast from Faro, including Benagil Cave, Marinha Beach, Algar Seco & More…
Best Hotel: Faro Cosy Guesthouse
Sometimes all you need is a simple, cosy and affordable little guesthouse… and as you may have guessed it by the name, Faro Cosy Guest House is exactly that. It’s conveniently located in downtown Faro too and was renovated not long ago. The rooms are very affordable, at around 50€ a night, and live up to the hotel’s name: cosy! Not too shabby.
Best Hostel: Casa d’Alagoa
This cool lil’ hostel is set in a crumbling old historic building – well, the front looks like that anyway. Inside it’s a different story: it’s modern and communal, with a pretty amazing social vibe going on. Think sangria nights, BBQ nights and a whole heap of the kind of hospitality that makes you stay in hostels rather than hotels. Also, the beds are custom-made and let’s just say they were built for COMFORT.
Best Airbnb: Beach front, cute semi-detached house
Not just near the beach… ON the beach. You can’t get much closer to the sea than this beachfront Airbnb. Drift off to sleep to the sound of the waves and wake up to a gorgeous view across the horizon. Located on one of the best sandy beaches along the Algarve, Praia de Faro, you’ll be five minutes from the airport and 10 minutes from Faro’s cultural hub.
Whether you’re up for a chill paddleboard or kayak along the calmer lagoon side or ride the waves on the surf ocean side. There is a LOAD of water sports to choose from while staying here.
3. São Miguel Island in the Azores – Most Romantic Place to Stay in Portugal for Couples
If you’re heading to São Miguel Island, could you please take me with you?! This place is unbelievable.
I can assure you that you’ll find yourself opening your mouth in awe as you traverse the island. Many of the people I know who’ve been have gone for a second round, and I can’t wait to do the same…
Known as the Green Island, it’s got lush hills, incredible marine life, and some of the most dramatic scenery in the country. The twin crater lakes of Sete Cidades alone are worth the trip.
You can base yourself in the capital Ponta Delgada for convenience, head east to Furnas for hot springs, or just lose yourself somewhere in between.
- Best For: Couples, nature lovers, slow travel
- The Vibe: Wild, lush, remote, jaw-dropping landscapes
- Proximity to Airport: ~20-40 minutes tops from Ponta Delgada Airport to most places in the island
- Transport Level: Limited. A car highly recommended
- Budget: $$–$$$ (prices rising, still decent value)
- Crowds: Generally low, with pockets around key viewpoints
Photo: @rizwaandharsey
Top Things to Do in Sao Miguel Island
- Visit the beautiful Sete Cidades Lake, one of Portugal’s seven natural wonders.
- Head up to Boca do Inferno Viewpoint to soak in the views.
- Take a mandatory photo on the Road of Hydrangeas.
- Visit the quaint Sete Cidades Village.
- Go to Mosteiros Beach for sunset.
- Bath in the natural hot springs at Ponta da Ferraria.
- Join the iconic Caldeiroes Canyoning Experience for a dose of adventure.
Best Hotel: The Azoriani Boutique
Set right in the historic centre of Ponta Delgada, this modern boutique hotel is a solid base for exploring São Miguel. It’s well-designed with a slightly upscale feel, but it’s much cheaper than what you’d expect, especially since prices have been ramping up in the island. You’re just steps from the seafront, restaurants, and nightlife, so you can enjoy the city comforts may you wish so after roaming around the island’s beautiful corners.
Best Hostel: Out of the Blue
Out of the Blue is such a sick upgrade that honestly they could probably charge more than what they currently are. Full disclaimer: you can find cheaper, but you won’t find better value for money. The infrastructure is absolutely stunning, and the free breakfast is insane and kinda settles the difference right away 😉 You’ll also be in the center of Ponta Delgada which, if you’re visiting for the first time, is the ideal base for adventures.
Best Airbnb: Quinta do Vinhático
Are you ready to snuggle up in this mega-romantic Airbnb, Quinta do Vinhático, in Sao Miguel? Situated just five minutes from the centre of Ponta Delgada by car, you will be able to bask in your own personal garden oasis.
You’ll be immersed in a garden that offers views of both the sea and the mountains. When staying in Portugal, and specifically, in one of the best areas to stay in Portugal, you’re going to fall even more in love with this Sao Miguel Airbnb!
4. Sintra – One of the Most Unique Places to Stay in Portugal
Sintra is unlike anywhere else in Europe and it also makes my list of the most beautiful places in Portugal.
Perched above an ancient forest, this UNESCO World Heritage Site is a riot of colourful palaces, mystical gardens, and pastel-coloured villas that feel pulled straight from a fairy tale.
It’s about 40 minutes from Lisbon, so it’s easy to reach. There is a train as well so if you plan your trip well you won’t necessarily need a car to visit.
Stay as close to the historic centre as you can for convenience, or push out into the Sintra-Cascais Natural Park if you want something different.
- Best For: Fairytale vibes, history lovers, short stays close to Lisbon
- The Vibe: Mystical, romantic, slightly touristy but magical
- Proximity to Airport: ~30-40 minutes from Lisbon Airport
- Transport Level: Train access from Lisbon, but local transport can be tricky
- Budget: $$–$$$
- Crowds: Very busy during the day (day-trippers), quieter at night
Image: Nic Hilditch-Short
Top Things to Do in Sintra
- Visit the famous, Moorish Castle/Castelo dos Mouros.
- Check out the National Palace of Sintra.
- Get lost in the gardens of Quinta da Regaleira.
- Marvel at the exquisite Monserrate Palace.
- Don’t forget to eat queijada or travesseiro (local pastries).
- Walk up to the iconic Pena Palace (you can drive but it’ll probably take you about the same time as getting stuck in the mad traffic to get up there, plus the parking is shit)
- Or, join a tour around Sintra that takes you to all of the best of the above.
Best Hotel: Sintra Bliss Hotel
There’s certain places where I find that booking accommodation close to train stations is your best bet, and Sintra is the kind of place where this is incredibly helpful, especially if you’re not coming by car. This one’s a a great mid-range option if you want something central, comfortable, and a little more polished than your average guesthouse. Prices are decent and the rooms are quite solid!
Best Hostel: Casa Azul Hostel
One of the things I struggled with in Sintra is accessibility – something you might too if you’re not bringing a car! That’s why I opted for picking a hostel in the centre, which you can access by train from Lisbon, and then you can base your adventures from there, or even join tours or fellow travellers going on expeditions. Sintra is marvellous place, and staying central really helps.
Best Guesthouse: Sintra GuestHouse VC17
This Sintra Gueshouse is a three-bedroom and one-bathroom home. There are a total of four beds, which makes sleeping six easy as cake! The decor is gorgeous, with lots of antique furniture and thoughtful touches. You’ll be staying in a lovely stone building that was actually built right at the tail end of the 19th century! Plus, you’ll be close to the historic centre of the city.
5. Lagos – Where to Stay in Portugal for Partying
Located on the Southwestern tip of Portugal, Lagos is an interesting mix between beautiful nature and potentially rowdy vibes in the center.
There’s a lot you can do here, including kayaking, scuba diving, hiking, surfing, and most other outdoor activities. It’s also a major party hub for a lot of travellers so the fun is never over.
From Lagos, you’re a twenty-minute drive to the closest point of the Southwest Alentejo and Vicentine Coast Natural Park, one of the most beautiful regions in the entire country (perhaps only topped by São Miguel). And it’s got some of the most spectacular beaches in Portugal.
- Best For: Backpackers, surfers, nightlife + beach combo
- The Vibe: Energetic, social, outdoorsy with party edge
- Proximity to Airport: ~1 hour from Faro Airport
- Transport Level: Decent. Walkable centre, car helpful for some of the beaches
- Budget: $–$$$ (hostels cheap, summer prices spike)
- Crowds: Busy in summer, especially with party crowds
Photo: @amandaadraper
Top Things to Do in Lagos
- Join a pub crawl! These are organised by party hostels such as JJ’s Yard.
- Marvel at the incredible coastal rock formations of Ponta Da Piedade.
- Rent a SUP (stand-up paddleboard) and venture along the coast. Take a snorkel with you!
- Stop in to see the Lagos Fortress, also known as the Forte da Ponta da Bandeira.
- Relax and swim at the most popular beaches, Praia Da Batata & Praia Do Pinhao.
- Hike the Hike Seven Hanging Valleys Trail, one of the best trails in Portugal.
- Join a guided kayak tour and explore the coast.
Best Hotel: Hotel Mar Azul
Ah, the Hotel Mar Azul! This beautiful hotel puts you just a three-minute walk to the ocean. You’ll be just minutes away from the calm waters at Meia Praia Beach— a great kite surfing spot. Plentiful cafes and restaurants surround this hotel, so you won’t be struggling to find delicious meal options as is usually the case anywhere in Portugal to be fair.
Best Hostel: JJ’s Yard
This place is a second home to me as I spent nearly two months volunteering here. But it is THE best party hostel in Lagos. The hostel has a super social vibe and runs a nightly pub crawl (with pre-drinks at the hostel, so you can save on those euros… they get it). The owner is JJ and makes every guest feel welcomed into the family as soon as they arrive. You can’t miss staying here if you’re heading to Lagos to party.
Best Airbnb: Casa Hortelã
Whoever designed Casa Hortelã understood the assignment. The vibe of this charming little apartment is on-point, with wooden floors, plants everywhere and gorgeous decor. It feels like home as soon as you walk in the door.
Located close to the old town, you’ll be well situated for the action of the town – including bars, restaurants, shops, museums, churches and so much more. You’re also steps from the waterfront to take a stroll along the front and down to the beaches.
6. Madeira – Best Place to Stay in Portugal for Adventure
Ahh, Madeira… an adventurer’s paradise. This special island is technically in Portugal but is in fact on an island located off the coast of Africa. Home to a unique landscape, Madeira is rugged, subtropical and just all-around sexy to any adventurer.
It welcomes nature lovers with open arms into its embrace brimming with delicious wine, mountain villages, hiking trails, rolling waves, and an EPIC underwater world begging to be explored. The hiking trails in Madeira are world-famous… you won’t want to miss them.
Madeira is really well connected to the world by the one and only Cristiano Ronaldo International Airport… yep, this is Ronaldo’s home island and, as you can see, they are pretty proud of it!
The island is fairly big and has many different areas to stay. The north is greener, mistier and sees more rain than the south, whereas the south is more urbanised and beachy. Funchal is the best area to stay in Madeira for getting around the place with no car (it’s the capital of the island).
- Best For: Hikers, adventurers, nature-focused travellers
- The Vibe: Rugged, dramatic, outdoorsy, slightly upscale in parts
- Proximity to Airport: ~15–30 minutes from Funchal Airport (if you’re staying in Funchal)
- Transport Level: Moderate. Car recommended for full exploration
- Budget: $$–$$$
- Crowds: Moderate, spread out across the island
Top Things to Do in Madeira
- Hike 25 Fontes Trail, the most popular on the island.
- Visit the beautiful Santana Traditional Houses.
- Take on the Pico to Pico Hike, another iconic Madeira trail.
- Head to the Vereda dos Balcões for some incredible views.
- Check out the Monte Palace, one of the world’s best botanical gardens.
- Visit the beaches at Seixal (black sand), Calheta, Machico and Ponta do Sol.
- Join a sunrise hike from Pico do Arieiro to Pico Ruivo
Best Hotel: Turim Santa Maria Hotel
If you’re heading to Madeira, you’ll probably be spending a lot of time in the mountains or on the beaches and the best thing after a day of action is returning to a nice room. And mate, these rooms are proper NICE! The location is super convenient, and honestly, it felt pretty chill compared to most big hotels I’ve stayed in. 10/10 would book again.
Best Hostel: 109 Funchal Hostel
I’m not gonna lie, Madeira doesn’t have a particularly strong hostel scene, but this is one of the best options you’ve got, especially if you don’t have a car to book somewhere further out without constantly splashing cash on taxis. It’s cute, small, cozy, and right in the centre of Funchal within walking distance from the famous Old Town. The hostess is a local certified mountain guide, so if you’re coming to trek, you can rest assured you’ll be in the right hands at this hostel.
Best Airbnb: Tipi in Ponta do Sol
If you’re going to Madeira to hang out in the mountains, why not go one further and stay in the mountains… in a Tipi?
Guys, this is no average stay; the magic can be felt as soon as you arrive. Surrounded by insane views across the sea, a lush garden, a kitchen and a bathroom. Although you’ll be staying in the mountains here, don’t worry, you won’t be roughing it. This Tipi in Ponta do Sol is glamping at its finest.
7. Porto – Coolest Place to Stay in Portugal
It’s no secret that Porto is the best city to stay in Portugal to enjoy great wine! Porto, on Portugal’s Northwest coast, is where port wine was invented but there are plenty of other varieties available. There are lots of beautiful buildings and historic spots from the iconic Livraria Lello bookshop, to the neoclassical Bolsa Palace.
But if it’s wine that you’re really after, then make sure you spend the most time on the wine trail! You should head over to Calém Cellar and tour their beautiful port wine cellars and learn about their ancestral traditions.
The winding cobblestone streets are filled with treasures, chic cafes and old merchants’ houses. City life here is pretty cool.
- Best For: Culture, wine lovers, city breaks
- The Vibe: Historic, artsy, slightly more relaxed than Lisbon
- Proximity to Airport: ~20-30 minutes from Porto Airport
- Transport Level: Very good! Metro, trains, and walkable centre
- Budget: $$–$$$ (generally cheaper than Lisbon, but not that much these days)
- Crowds: Busy but less intense than Lisbon
Image: Nic Hilditch-Short
Top Things to Do in Porto
- Explore the museum and surrounding gardens at Fundação de Serralves.
- Taste the local produce at Mercado do Bolhão.
- Buy a book from the world-famous bookshop, Livraria Lello.
- Take Luis I Bridge in the views from the top of the Clérigos Tower (pictured above).
- Marvel at Ribeira’s district view of Porto’s centre from across the water.
- Enjoy a wine tasting at the Port Wine Cellars (you can’t go to Porto without trying some Port).
- Or, do one better and join a tour to visit Douro Valley for a wine tasting!
Best Hotel: Lusitana Hotel
This chic little hotel has a lot to offer, and the prices are quite reasonable compared to everything else on offer! It’s beautifully designed and housed in a historic building, the rooms are comfortable, newly decorated, and it features balconies with city views. You’ll have plenty of hotspots nearby and you’re well connected with transportation in the area, so it’s a solid pick.
Best Hostel: Porto Spot Hostel
The Porto Spot Hostel is just about the right size to get to know everybody staying whilst big enough to party every night. It’s located in the city centre, just a 2-min walk from a major metro station, and it’s close to many of the city’s top spots. Complimentary breakfast each morning, community dinners, and FREE walking tours of the city are just a few of the reasons why this was my top pick 😉
Best Apartment: WONDERFULPORTO TERRACE
The reviews for this place speak for themselves – not one person can fault this special spot. Boasting some of the BEST views over the Douro River and Porto’s picturesque centre.
The WONDERFULPORTO apartment gets flooded with natural light and is brimming with historic character. This recently renovated, 19th-century building has an elegant and cosy charm. The apartment is not only gorgeous but it is equipped with everything you could need – from a stacked-out kitchen (with a Nespresso machine!!) to a mini-bar with FREE drinks.
Don’t Forget Travel Insurance for Portugal
ALWAYS sort out your backpacker insurance before your trip. There’s plenty to choose from in that department, but a good place to start is Safety Wing.
They offer month-to-month payments, no lock-in contracts, and require absolutely no itineraries: that’s the exact kind of insurance long-term travellers and digital nomads need.
SafetyWing is cheap, easy, and admin-free: just sign up lickety-split so you can get back to it!
Click the button below to learn more about SafetyWing’s setup or read our insider review for the full tasty scoop.
Where I’d Stay in Portugal Again (If I Were Booking Tomorrow)
The places that stuck with me the most were definitely São Miguel Island and Madeira.
If I were booking another trip tomorrow, I’d definitely try and pair one of these with a city like Lisbon – where you can easily do a day trip to Sintra too 🙂 If you’ve been already, then give Porto a go if you haven’t yet!
Wherever you end up, Portugal has so much to offer. I hope you love it as much as I do <3
- Check out our ultimate guide backpacking around Portugal.
- Figured out where you wanna stay? Now it’s time to pick the perfect hostel in Portugal.
- Save yourself hassle and money and get an international sim card for Europe.
- Swing by our super epic backpacking packing list to prep for your trip.
- Our in-depth Europe backpacking guide will help you plan the rest of your adventure.
