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.

The Best Places to Stay in Olhao

For Boutique Charm

• Convento, tucked away in the Old Town, has spacious guest rooms set around a classic central courtyard. Peaceful, intimate and historic, this is a charming base for romantic couples seeking an authentic Olhao experience. The rooftop boasts stunning views and a small pool.
• Casa Rosa Villa, once a private mansion, dates back to the 1950s. Now a welcoming guest house, the villa boats nine ensuite rooms with rain showers, plus a living/dining room, courtyard with plunge pool and big terraces for unwinding. Book the whole place for a big trip with friends.
• Casa Amor, a chic B&B just a few minutes' walk from the marina, has been lovingly restored by its French owners. The 10 bedrooms, with chic bathrooms, crisp linens and earthy tones are enormously inviting, and the big breakfasts a real treat. Clamber up to the roof terraces for the views and saltwater pool.

For a Beach Break

• Casa Flor De Sal is a collection of seven beachfront holiday houses in the Ria Formosa Natural Park. Blue and white interiors are charming, with high ceilings, traditional tiles and pretty kitchens. One for families or groups of friends dreaming of an active holiday in a beautiful setting.
• Casa Modesta offers a contemporary take on the classic seaside guesthouse. Think pared-back, modern architecture using traditional materials. White-on-white guest rooms lead to private terraces with ocean views, and the hotel pool is wonderfully refreshing. Sample the cellar's wines after a sunlit stroll along the beach.

FOR AN APARTMENT OR HOLIDAY VILLA

• If you'd prefer a self-catering option, we suggest that you visit our online partner Booking.com.

Travel information

• Fly to Faro Airport and travel 15km by bus or taxi to Olhao from there. Alternatively, most hotels will be happy to arrange an airport pick up in advance.
• The Algarve is ideal for a road trip! Contact our online partner Rentalcars if you would like to hire a car.
• Visit during the summer months, with temperatures averaging around 23°C between June and early September. You'll find fewer crowds and great hotel deals outside the school holidays, or in spring and autumn, when the weather is also slightly cooler.

STILL NOT SURE?

• Explore our list of all the best places to stay in Faro.
• Alternatively, expand your search to see our pick of the best places to stay in the Algarve.
• Or contact one of our friendly Gurus for advice.