Just east of Faro, Olhao is sheltered from the Atlantic by the coastal islands, lagoons and sandbars of the Ria Formosa Nature Reserve. Originally a fishing village, the community has grown into a charming historic town, with plenty of pretty guest houses and hotels lining its little lanes. Our pick of the best places to stay in Olhao are set between this lovely heritage centre and the nearby beaches — perfect for memorable holidays with family and friends, or as a couple.
Olhao's old town is a joy to explore, with narrow alleys, traditional tile-fronted houses and wrought iron balconies bedecked with flowers. Bars and restaurants spill into shaded courtyards, and independent boutiques sell everything from ceramics to local wine, honey and artisanal cheeses. Stroll along the waterfront to watch the day's catch being brought in, or to fill your bags with local produce at the two weekly markets.
A boat trip around the Ria Formosa Nature Reserve is a must-do for outdoorsy types. Spot storks, flamingoes, egrets, whales and dolphins with an expert local guide, or follow walking and cycling trails. For golden sands and sunshine, take a short ferry ride to the idyllic Ilha da Armona. The sheltered side of the island is brilliant for refreshing dips in clear waters. Two of the best places to stay in Olhao are also right on the beach, so you're guaranteed dazzling views for your late afternoon sundowners.
