5 affordable luxury hotels in the Algarve

From Lagos to Vilamoura, the Algarve isn’t short of luxury golf resorts and 5-star beach escapes.

Although you can grab a bargain out of season, in the summer months during high season, luxury hotels can be very expensive, with 5 star hotels costing upwards of £300 per night. If you want to holiday in luxury but don’t want to pay peak summer prices, check out our selection of affordable luxury hotels on the Algarve coastline.

Each hotel has been selected based on the best reviews, facilities, location and special touches to save you time when searching for a hotel this year. Keep in mind a lot of luxury hotels in the Algarve are situated slightly out of the action, perfect for a relaxing adult break but not necessarily family friendly. However, if you’re renting a car, you’ll find a lot to do in close proximity. Furthermore many of the larger resorts offer regular shuttle buses to the local towns.

Hotel name: Grande Real Santa Eulalia Hotel

Grande Real Santa Eulalia Hotel

Resort: Oura/Albufeira

Average price for one week in July: £900 (double room)

Possibly the best value for money in our list, the Grande Real Santa Eulalia is one of the best rated luxury hotels in the Albufeira area and boasts a variety of facilities, including a spa, multiple restaurants and bars, hot-tubs, a nightclub and secluded beach. It is located in a tranquil area just outside of action packed Albufeira but easily accessible to the town via the hotel’s free bus shuttle transfer.


  • Santa Eulalia beach is a lot quieter than other Albufeira beaches and the Grande Real Santa Eulalia is just short walk away – and did we mention the view?
  • The hotel is great for families – it has 4 swimming pools, 3 additional pools for children and an on-site kids club
  • The hotel’s spa has 17 treatment rooms to cater for your tastes, massage rooms, a hammam, sauna and other relaxation facilities

Hotel name: Tivoli Marina Portimao

Tivoli Marina Portimao - Algarve Luxury hotels

Resort: Portimao

Average price for one week in July: £700 (double room)

Located at the mouth of Portimao marina, the Tivoli Marina hotel features stunning views looking out into the ocean and bay area. Being in the heart of Portimao means that the beach is only a short walk away and there are plenty of bars, restaurants and shops to explore.

Portimao is slightly cheaper than a lot of other Algarve resorts, meaning you can book luxury Algarve hotels such as the Tivoli for significantly less, even in the peak summer months. If you haven’t stayed in a Tivoli hotel before, they’re well known in Portugal for offering 5-star service, facilities and relation. Look at the reviews for yourself to see just how excellent this hotel is.


  • Central location in the heart of Portimao Marina
  • Guaranteed quality from the Tivoli brand
  • Plenty of activities to enjoy, including diving, hiking, golf, bicycle rental, massage and multiple seawater swimming pools

Hotel name: Pousada Palacio de Estoi

Pousada Palacio de Estoi - Luxury hotels in the Algarve

Resort: Faro

Average price for one week in July: £800 (double room)

As its name suggests, the Pousada Palacio de Estoi hotel is a beautiful luxury Algarve hotel on the grounds of a 19th century palace. If you’re looking for a luxury week away in a quiet and secluded area of relaxation, this hotel is perfect. From historic paintings, furnishings and grounds to the modern essentials of a luxury hotel, the Pousada Palacio has an authentic charm than just isn’t evident with a lot of other hotels.

Due to the secluded location and the Faro area not being as popular as other resorts, prices are a lot lower than comparable hotels in the Algarve – plus it’s only a short drive from the airport! This hotel is best suited to couples or friends who just want to relax in the resort. There isn’t a great deal to do in the Faro area but many other Algarve resorts and attractions are within driving distance so we’d definitely recommend renting a car if you want to explore.


  • A structurally beautiful palace setting which is ideal for a romantic getaway
  • Only a 20 minute drive from Faro airport
  • The nearby town of Estoi provides an authentic experience of the Algarve from a local’s point of view and is less touristy than the main holiday resorts. Browse the quaint shops, visit Ancient ruins and try some local food in this small but cultural town

Hotel name: Sao Rafael Atlantico

Sao Rafael Atlantico

Resort: Albufeira

Average price for one week in July: £900 (double room)

If you like to be near the action and have lots to do on holiday, Albufeira definitely has the most going on. The Sao Rafael Atlantico hotel provides relaxation and luxury in a quiet area of Sesmarius, a 10 minute drive from Albufeira old town centre. With an ultra- modern and spacious interior and variety of day time activities, the Sao Rafael Atlantico is one of our favourite hotels in Albufeira. Being slightly out of town means that the hotel is quite reasonably priced and provides excellent value throughout the summer months.


  • Private beach access
  • Indoor pool – great for out of season trips when the weather is still cool
  • Hotel facilities and activities ranging from windsurfing and fishing to an on-site spa, jacuzzi and fitness centre. There’s plenty to do in between pool visits

Hotel name: Pestana Vila Sol

Pestana Vila Sol - luxury hotels in the Algarve

Resort: Vilamoura

Average price for one week in July: £650 (double room)

Our recommendations list wouldn’t be complete without mentioning a luxury golf resort. The Algarve is famed for its top-notch courses, with Vilamoura in particular being a hotspot for golfing holidays. Sitting further inland from the resort of Vilamoura, the Pestana Vila Sol is a secluded luxury Algarve hotel with panoramic views of the golf course from its pool and on-site restaurants.

In addition to the golf course, this hotel offers a tennis court, fitness centre, games room and both indoor and outdoor pools – great entertainment for the whole family. Even if you’re not a fan of golf, resorts such as the Pestana Vila Sol can be the perfect place to relax away from the busy bars and restaurants of Vilamoura marina. Being located on the outskirts of Vilamoura, this hotel is considerably cheaper than other luxury Vilamoura resorts but with the same 5-star facilities. Vilamoura can be reached in 7 minutes with a hire car or taxi. Mention also why Vilamoura and what else is there to do other than golf in the area.


  • The Pestana Vila Sol’s location means the prices are significantly lower than hotels closer to the town but it is still accessible within a 7 minute drive
  • Vilamoura is renowned for being one of the most luxurious resorts on the Algarve, offering high-end restaurants, bars and boat trips
  • All rooms come with a patio or balcony as standard and are outfitted with a luxurious interior

Top tips for booking Luxury Algarve hotels:

  • Less popular resorts in the Portimao/Lagos and Faro area are considerably cheaper than the highly visited Albufeira, Vilamoura and Quarteira area
  • Don’t forget to take advantage of cashback and discounts to get the best price
  • Search multiple dates if you’re flexible. The prices can vary wildly based on how busy a hotel is

Use our handy hotel booking guide for tips on getting the best hotel deal. Check it out here.


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