The Best Cheap Hotels in the Algarve, Portugal

You can enjoy the Algarves beautiful beaches, like Praia do Carvoeiro, on a budget thanks to the range of great affordable places to stay
You can enjoy the Algarve's beautiful beaches, like Praia do Carvoeiro, on a budget thanks to the range of great affordable places to stay | © imageBROKER / Alamy Stock Photo
Laura Hampson

With golden beaches, clear Atlantic water and world-class surfing spots, it’s no wonder four million visitors book their summer holidays in the sun-soaked Algarve each year. Here’s our pick of the best cosy-yet-cheap hotels, dotted along the Faro to Lagos coastline.

A favourite of the fly and flop brigade, the Algarve makes a strong case for being one of the best summer destinations in Europe. Whilst the area is awash with five-star resorts and golf courses, you don’t have to spend a fortune to indulge in its delights. There are plenty of budget-friendly hotels in Portugal’s southernmost region.

1. Quintinha da Foz Guest House


Exterior of the Quintinha da Foz Guest House
Courtesy of Quintinha da Foz Guest House / Expedia

Quintinha da Foz is a pretty guesthouse that sits on a prime patch of green. It’s equidistant between Tavira and Santa Luzia, with popular beach Praia da Ilha de Tavira just down the road. Bikes are available to explore the nearby Ria Formosa Natural Park, and a breakfast made with local produce is served al fresco by the shimmering pool each morning.

2. Vale Fuzeiros Nature Guest House

Budget Hotel, Guesthouse

A room with green beds, circular wall art and tiled flooring at Vale Fuzeiros Nature Guest House
Courtesy of Vale Fuzeiros Nature Guest House / Expedia

Tucked away on an unassuming hillside, the bougainvillea-clad Vale Fuzeiros Nature Guest House sits on farmland and offers glorious views across the countryside – best seen from its sun-drenched pool. Inside, expect beamed ceilings, minimalist bedrooms with French doors, and airy, tiled bathrooms. The local breads and cakes served for breakfast should be eaten on the outdoor verandah while taking in lungfuls of the fresh country air.

3. Villa Rio Guest House Suites

Budget Hotel

A twin room at Villa Rio Guest House Suites with white and blue decorations
Courtesy of Villa Rio Guest House Suites

For a smart option in the heart of pretty Portimao, it’s got to be Villa Rio. Rooms are fitted with four-poster beds, windows that look across to the river and twin sinks in the bathrooms. Opt for the deluxe suite if you can, as light pours in through the large arched windows. These lead to your very own private balcony where views stretch across one of the city’s leafy gardens.

4. Hotel Don Rodrigues

Budget Hotel

Exterior of Hotel Don Rodrigues with a large blue outdoor pool
Courtesy of Hotel Don Rodrigues / Expedia

Sometimes, all you need is a hotel with a stellar pool – especially when you’re visiting the perennially sunny Algarve. Luckily, Hotel Don Rodrigues offers just that; its glistening al fresco pool is ideal for kids and adults alike. Rooms here are well-appointed and make for a fantastic base to explore the surrounding area. The white sand Barril Beach is just five kilometres away – a short drive, bike or walk, if you’re up for it.

5. Velamar Boutique Hotel

Budget Hotel

Outdoor pool surrounded by sun loungers at Velamar Boutique Hotel
Courtesy of Velamar Boutique Hotel / Expedia

With two bars, a spa, an outdoor pool and a games room, it might be hard to pull yourself away from Velamar Boutique Hotel once you arrive (but there’s an excellent beach a short walk away if you do). Instead of being hidden away in a basement, the spa here sits on one of the hotel’s higher floors – there’s a panorama of the countryside from the treatment rooms – so be sure to indulge in one of its Japanese-inspired massages.

6. Casa d'Algoa


A living room at Casa dAlgoa with a desk, red seat and wall art
Courtesy of Casa d'Algoa / Expedia

With its traditional Portuguese town villa facade, you’d be forgiven for thinking this Faro gem is a posh hotel rather than a youth-filled hostel. A daily buffet breakfast is provided here, and make sure you stick around for one of its legendary sangria and barbeque nights. When the sea calls, rent one of the hostel’s bikes and zoom past the wild flamingos and salt fields on your way to the beach.

7. Clube Maria Luisa

Serviced Apartment

Outdoor pools at Clube Maria Luisa, with a view of the ocean in the background
Courtesy of Clube Maria Luisa / Expedia

Plonked in the traditional fishing village of Olhos de Água, with the marvellous golden sand Praia Maria Luísa beach just a stroll away, Clube Maria Luisa is a modern apartment-style option for your next stay on the Algarve. Each of the apartments, which sleep between two and four guests, are spacious and light-filled, and there’s a large pool to enjoy as well (when you can drag yourself away from the beach, that is).

8. Lagos Charming Villas

Budget Hotel, Villa

Sun loungers in a garden at Lagos Charming Villas
Courtesy of Lagos Charming Villas / Expedia

With that home away from home feel, Lagos Charming Villas is located on a quiet residential street, just one mile from the expansive Meia Praia Beach and its teal-hued waters. There are three rooms to book in the villa as well as a private apartment – opt for the apartment with the garden for an airy space and an outdoor hot tub to sit in come nightfall complete with a crisp glass of wine.

Nina Santos contributed additional reporting to this article.

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