Traveller's Guide: The Algarve

It's not just sun, sand and Brits on the beach – Portugal's south coast offers dramatic countryside inland, too, says Cathy Packe

Portugal's south coast, washed by the Atlantic Ocean, boasts natural bays, sandy beaches and strange rock formations. Combined with year-round sun and warm sea, the Algarve makes a great base for a holiday.

It was first developed in the 1960s when the British discovered villages like Praia da Rocha, with its cliffs and beautiful sandy beach. Today, most visitors reach the Algarve by way of Faro airport, the region's only international gateway, which is served from 19 airports around the UK.

Most people spend no more than a night in Faro – and when a new airport hotel opens in 2013 there will be no need to make the three-mile journey into the centre at all. This is a pity, since there is plenty to tempt in the region's largest town, from the walled centre with its cobbled squares, narrow streets and hidden restaurants to a handsome harbour from where boats depart to the islands of the Ria Formosa Natural Park.

Most of the busiest resorts are west of Faro along the coast as far as the lively town of Lagos, with its Moorish castle and dolphin safaris. Highlights include Albufeira, a former fishing village that has expanded dramatically without losing its charm.

West of Lagos the coast is wilder, and continues for 60 miles to the dramatic landscape of Cape St Vincent. This is the south-western tip of mainland Europe, where its remoteness earned it the nickname among sailors as "the end of the world". The coast then turns north; from here to Odeceixe are some of Portugal's best surfing beaches.

An often-overlooked facet of the Algarve's charm is that the interior completely contrasts with the coast – a calm, undeveloped mix of remote villages and dramatic countryside. The most impressive scenery can be found in the Serra de Monchique, the magnificent hill country north of Portimao. This area is ideal for outdoor sports such as riding and cycling. Equally striking is the area around the Guadiana river, which separates the eastern side of the Algarve from Spain. The only settlements of any size are Vila Real de Santo Antonio, at the mouth of the river, and, 20 miles further north, Alcoutim, dominated by its castle which faces Sanlucar, across the river in Spain. The two towns are linked by a ferry that operates on demand, with a break in the middle of the day while the boatman has lunch.

Food is an important part of a holiday on the Algarve, and while grilled sardines and the traditional cataplana seafood casserole are staples for many visitors, the region boasts some of the finest restaurants in Portugal. These include the country's only restaurant with two Michelin stars: the Vila Joya in Praia da Gale (00 351 289 591 795). The Austrian chef, Dieter Koschina, makes best use of local produce. There are also five restaurants with a star each, including Willies in Vilamoura.

Strenuous efforts are being made to boost the cultural attractions of the coast. One initiative is an exhibition featuring pieces belonging to Jose Berardo, one of Portugal's leading collectors of contemporary art. From now until 10 September, visitors to the Algarve will have the opportunity to see "Ten Monumental British Sculptures", on display in Cerro da Vila, the site of a Roman villa in the resort of Vilamoura; there are works by, among others, Henry Moore and Anthony Caro. The exhibition opens 9.30am-1pm and 2-6pm daily; admission is €5.

Outdoor life

Southern Portugal has not, traditionally, been regarded as walking territory, but since 2009 the 240km Via Algarviana hiking trail has been completed, linking Alcoutim in the eastern Algarve with Cape St Vincent in the far west. The path is well signposted, and is divided into 30km stretches of varying difficulty: most challenging is the hike through the Serra de Monchique, the region's highest point. At the end of each sector there is accommodation and a restaurant.

There is also a plan to create a network of walking trails in the region, linking up the Via Algarviana with paths that cross or connect with it.

More extreme sports are also increasingly popular. Sea kayaking, kitesurfing, rock climbing and mountain biking are among a number of activities offered by Extreme Algarve (00 351 912 849 723; extremealgarve.com), based in Lagos, while the Algarve Surf School at Vila do Bispo (00 351 962 846 771; algarvesurfschool.com) is one of a number of similar establishments in the west of the region.

Where to stay

The Algarve has always offered some of the keenest prices for package holidays, yet UK visitors have dwindled by 10 per cent in the past few years. To win them back, the travel industry is offering excellent deals; in addition, living costs are among the lowest in the eurozone. Accommodation ranges from self-catering apartments to luxury resorts; in between there are traditional quintas or manor houses, like the Casa de Estoi ( casadeestoi.com) north of Faro, and boutique hotels like the Vila Mar Azul in Lagos.

In the past year a number of hotels have opened including the five-star Real Marina Hotel and Spa (00 351 291 724 341; real-marina.com) in the new marina at Olhao. Facilities include indoor and outdoor pools and a thalassotherapy spa, and it is within easy reach of some of the most secluded beaches on the Algarve, on the barrier islands at this end of the coast.

Inland, between Olhao and Tavira is the Vila Monte Resort (00 351 289 790 790; vilamonte.com). Deep in the countryside, the property is a combination of patios, colonnades and lush gardens. The Eden resort (00 351 289 002 700; myedenresort.com), which opened last summer in Albufeira, has six swimming pools, a sports centre, lake and spa, as well as a playground and children's club that make it ideal for families. Accommodation can be booked on a bed and breakfast or half-board basis, and the rooms also have self-catering facilities.

Another new destination, also aimed at families, is the Conran & Partners-designed Martinhal Beach Resort (00 351 282 240 200; martinhal.com), where accommodation consists of two- and three-bedroom houses, private villas, and a five-star boutique hotel. The resort offers extensive sports facilities, crèche and children's club as well as a spa.

Nearby is the stylish Memmo Baleeira Hotel in Sagres (00 351 282 624 212; memmobaleeira-sagres.com), whose facilities include a restaurant, swimming pool and spa. It has 105 rooms; doubles start at €95. Last summer the first Crowne Plaza hotel (0871 423 4876; crowneplaza.com) in the region opened at Vilamoura, following the refurbishment of an existing property. With some 350 rooms and suites, it describes itself as a "beach, golf and conference hotel"; it is also next door to the casino, and a short walk from the marina.

On the wild side

The Algarve Motor Park opened two years ago as a race track for Formula One, Superbikes and karting events. Spectator events take place throughout the year, but it is also possible for adults and children to take to the track.

For adults there are courses in defensive driving, motorbike courses, and taxi experiences in which you can be driven at high speed, in a car or on a bike, by an instructor. Prices start at €70. Courses for teenagers learning to drive start at €229. There is also a karting track, and a smaller circuit suitable for children up to the age of six. The Park (00 351 282 405 650; autodromodoalgarve.com) is close to Portimao, just north of the main A22 motorway.

Keeping the children occupied

While the Algarve is turning itself into a region that is increasingly appealing to adults, there is no shortage of activities for younger members of the family. A popular attraction is the Zoomarine theme park at Guia, not far from Albufeira, which combines entertainment with conservation. Inside you'll find an aquarium, swimming pools and more water-based fun. The season begins on 1 March, and the park will open daily 10am-6pm, until 7.30pm in the summer. Admission is €24, and €15 for children aged between five and 10. Book online ( zoomarine.pt) before 15 February for a 20 per cent discount on admission at any point during the season.

Slide and Splash Water Park in Lagoa (00 351 282 340 800; slidesplash.com) offers pools, slides, flumes and rapids. It opens from April to October; this year's prices have yet to be announced, but admission last year was €20 for adults, €16 for children aged five-10.

Time to be pampered

The emphasis on spas and wellness centres opening in the Algarve in recent years has been a notable feature, and it is almost an essential for a new hotel to have a spa. But their presence is not new to the region.

Caldas de Monchique is a pretty village a few miles south of Monchique itself, built around a shady square. The health benefits of its natural hot springs were known to the Romans, for whom the village was a popular destination. It now has a modern spa complex (00 351 282 910 910; monchiquetermas.com).

The spa is currently closed for updating but is due to reopen in May; visitors can book into any of its five hotels, enjoy the waters and use the treatment facilities.

Since last spring, the Longevity Wellness Resort (00 351 282 240 110; longevitywellnessresort.com) has been providing competition in the same village: five-star accommodation combined with a medical spa, relaxation programmes, and beauty treatments. Rooms are available from €90 per night, and treatments are extra.

For eight days beginning 5 March, 10 of the Algarve's five-star hotel spas, including the Lake Spa Resort at Vilamoura, will be taking part in Spa Week. During the promotion a range of treatments will be available at half price; there will also be special room rates at participating hotels. See algarvespaweek.com.

Later in the summer a new Conrad hotel is due to open at Quinta do Lago – complete with what is describes as "one of the most decadent spas on the Algarve".

Life on the fairway

The Algarve is a popular destination for golfers, with nearly 40 courses on offer. One of the most highly praised is Monte Rei, a Jack Nicklaus signature course at Vila Nova de Cacela (00 351 281 950 950; monte-rei.com), in the hills north-east of Tavira.

In less than four years it has established a reputation as one of the finest courses in Europe. The luxury clubhouse has a swimming pool and tennis courts, with a bar, restaurant, spa and beauty salon to be added this spring.

The eastern side of the Algarve is also seeing development along the banks of the Guadiana river around the town of Castro Marim. This is the location for Quinta do Vale (00 351 281 543 407; quintadovale.com), an impressive 250-acre site that contains an 18-hole golf course designed by Seve Ballesteros. A five-star hotel is planned, as is a marina.

The Palmares Course (00 351 282 790 500) at Meia Praia, east of Lagos, has been extensively redesigned by Robert Trent Jones Jr. The first 18 holes reopened in October, and a further nine will open this year, combining modern design, a links course and stunning ocean views.