On a rocky outcrop above the crashing waves, this gorgeous hotel was once the summer residence of the dukes of Loulé. Although expanded and modernized, its character has been retained, particularly in the fabric-lined corridors and the cozy terrace bar. The guest rooms combine elegance (old prints and floral drapes) with comfort (good beds and spacious bathrooms); it's worth paying extra for a sea view. The small pool and the terrace overlook the ocean. A fine buffet breakfast is served in the Albatroz restaurant ($$-$$$$; reservations and dressy-casual attire are essential), where fish dishes are the specialty. The hotels also rents three adjoining small villas.
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