I step off the plane in Lisbon and feel the warm Atlantic breeze, nostalgic for the Portugal I remembered as a budget traveler years ago.
Back then, Portugal was Europe’s hidden gem with stunning cities, golden beaches, and delicious food at prices that made a mid-range traveler’s wallet sigh with relief.
But here in 2025, with post-COVID tourism booming and inflation in the air, I wonder: Is Portugal still the low-cost haven it once was, or have prices grown as steep as Lisbon’s famous hills?
The answer, it turns out, is a bit of both. Prices have risen noticeably in the past few years, extra tourists and economic shifts have pushed costs upward, yet Portugal can still offer excellent value for money with a little savvy planning.
I set out to explore the new economics of traveling in Portugal as a mid-range traveler. Here is what I found on my journey, with stories and real numbers along the way.
Lisbon: Big City Charm, Bigger Prices?
first stop is Lisbon, Portugal’s vibrant capital. As my airport taxi winds through the cobbled streets of the Baixa district, I’m hit with familiar sights – ironwork balconies, tiled facades, the 28E tram clattering by – but also with new price tags.
Lisbon in 2025 is noticeably pricier than it was pre-pandemic, especially in the touristy central areas. Over the past couple of years, Portugal saw record tourism and a post-COVID travel boom, which, combined with general inflation, has driven up the cost of everything from accommodations to a cup of coffee.
By 2023, hotel and lodging prices in Portugal jumped over 17% in one year – far above general inflation. In fact, average daily room rates in Portuguese hotels reached around €160 by 2024, placing Portugal among the top 10 most expensive EU countries for tourist accommodations (Lisbon being a major factor). It’s a startling statistic that I can feel when searching for a room in the capital.
Sticker shock in accommodation
Checking hotel rates in central Lisbon gives me pause. The quaint guesthouse I remembered staying at years ago now charges well over €120 a night.
Mid-range hotels in good locations commonly run €100–150 per night in Lisbon these days. My friends in Lisbon lament how Airbnb changed the game: many landlords switched from local rentals to lucrative short-term lets, driving rents sky-high and squeezing locals out of central neighborhoods.
The result for travelers? Fewer cheap stays. A decent, clean three-star hotel or comfortable Airbnb in the city center will likely cost into the low hundreds of euros per night, especially in high season. (And note: starting in late 2024 Lisbon even doubled its tourist tax to €4 per person per night – a small extra that symbolizes how the city is coping with booming tourism.)
Yet, even as Lisbon grows more expensive, it remains a bargain in some ways. I’m pleasantly surprised that local transport is still cheap: a 24-hour public transit pass costs just €6.80 (or €10.80 including suburban lines to places like Sintra). Hopping on that iconic Remodelado tram is only a few euros – in fact, I use my day pass, but I note a single ride is about €3 if bought onboard.
Small pleasures like an espresso (um bica) or a pastél de nata are also delightfully affordable. In a neighborhood café, I pay €1.20 for a strong coffee and €1.50 for a warm custard tart – prices that haven’t changed much and are far cheaper than in Paris or Rome. For lunch, I seek out a family-run tasca in Alfama.
The daily special (prato do dia) is a hearty deal: for €10 I get a bowl of soup, grilled fish with potatoes, a simple dessert, and even a glass of house wine. These old-fashioned lunch deals (often €8–12 for three courses with wine) are a godsend for budget-conscious travelers. I savor every bite, happy that some aspects of Lisbon remain incredibly good value.
Splurging and saving
Of course, Lisbon also offers plenty of ways to splurge if you’re not careful. Trendy new restaurants in Bairro Alto or the chic rooftop bars can easily run €50+ per person for dinner – a far cry from the €15 meals I recall from years back.
In fact, long-time residents point out that a decade ago €30 per head bought an upscale meal, whereas today you’d be “lucky to get out for under €50 per head” at a good restaurant.
I experience this inflation firsthand when I treat myself at a modern Portuguese bistro: two courses and wine set me back €55. Ouch. But then, I balance it the next night by eating like a local – grabbing savory bifanas (pork sandwiches) from a stall for just a few euros and enjoying street-side fado music for free.
For mid-range travelers, Lisbon can be both pricey and affordable: it all depends on where you stay and eat. The key is to mix the splurges with the steals. For instance, my boutique B&B in Principe Real is €130 a night (charming and worth it), but I offset that by using cheap public transit and enjoying those €10 dinners.
By the time I leave Lisbon, I’ve spent more than on past trips, yet I feel I’ve gotten great value – the city’s energy and beauty still punch above the price tag I paid. And compared to other capitals like London or Rome, Lisbon is still a bargain in many respects, just no longer the ultra-cheap secret it once was.
Porto and the North
Heading north, I take a comfortable train from Lisbon to Porto. Booking in advance online, I snag a promo fare for just €12 – an incredible deal for a nearly 3-hour journey. (Standard fares are still reasonable too: about €26–33 one-way for the Lisbon–Porto route on intercity or high-speed trains.)
The train ride itself is a delight, clattering through rice paddies and medieval towns, and it reinforces one of Portugal’s great advantages: transportation remains affordable and efficient.
Whether by train or bus (major routes by coach max out around €20 or less), getting around Portugal won’t break your budget, especially compared to pricier rail networks in, say, Italy or France.
Arriving in Porto, I immediately sense a different pace. The City of Bridges greets me with a kaleidoscope of terracotta rooftops tumbling toward the Douro River. Porto is Portugal’s second city, and in many ways it’s also second to Lisbon in costs – slightly cheaper for hotels and food, which is welcome news.
I check into a charming guesthouse near the historic center, and the rate is €95 a night – not cheap per se, but notably less than a comparable stay in Lisbon. For mid-range travelers, Porto offers plenty of these boutique guesthouses and small hotels in the €80–120 range, often in beautifully restored old buildings.
If Lisbon’s accommodation market was distorted by Airbnb, Porto feels a touch more balanced; you can still find a good deal, especially outside of peak summer. Walking through the atmospheric Ribeira district, I’m struck by how many languages I hear – Porto is firmly on the tourist map now – yet I manage to find a riverside café where locals sip port wine for a few euros.
Wine, by the way, is a huge perk of traveling in Portugal: a lovely glass of Douro red or Vinho Verde often costs only €3–4 even at restaurants, a fraction of what you’d pay in Italy for similar quality.
Dining in Porto comes with its own must-try budget specialty: the Francesinha. This gut-busting, uniquely Porto sandwich – layered with steak, sausage, ham, cheese, fried egg and smothered in beer gravy – is both an experience and a meal that can easily feed two.
I split one with a friend at Café Santiago (one of the famous spots); the bill? €10 for the enormous dish, which leaves us full for the rest of the day. It’s not gourmet cuisine, but it’s classic Porto and an incredible value given the sheer size. For something lighter (and arguably more elegant), I indulge in petiscos (Portuguese tapas) one evening.
In a cozy wine bar, we sample local cheeses, cured ham, and bolinhos de bacalhau (cod fritters) – each plate just €5–10, proving you can dine very well here without overspending. In fact, I find that in Porto and northern towns, a mid-range traveler can feast on regional specialties for surprisingly little: think €20–25 per person at a nice traditional restaurant, including wine.
Contrast this with many other European cities where a similar meal might be double.
Activities and extras: Strolling Porto is free and endlessly rewarding – the views from the top of Dom Luís Bridge cost nothing, nor does wandering the historic Sé cathedral area. Some paid attractions are quite modest in price: the famous Livraria Lello bookstore, for instance, charges €5 (credited toward a book purchase), and a port wine cellar tour with tastings might be €15–20.
I do splurge on one big experience: a Douro Valley wine tour to explore the vineyards upriver. It costs €120 for a full day with multiple winery visits. It’s a lot, but as I’m cruising on the Douro with a glass of tawny port in hand, I feel it’s money well spent.
Not every traveler will budget for this, but it shows that even splurge excursions in Portugal tend to be cheaper than comparable tours in, say, Tuscany or Bordeaux.
As I venture further north to smaller cities like Braga and Guimarães, prices drop a notch further. In these less-touristed spots, I find simple but comfortable hotels for €70–€90 a night. A dinner of caldo verde soup, roast pork, and local green wine costs under €20.
Even museum tickets are often just a few euros. It’s clear that outside the big hubs, Portugal’s cost of travel remains very low by Western European standards. Porto and the northern region encapsulate this well: you enjoy much of the same magic – historical centers, great food, friendly vibes – at a discount compared to Lisbon.
By the end of my northern exploration, I realize my daily spending here has been perhaps 20% less than in Lisbon. For a mid-range traveler, Porto and the north can feel like a sweet spot: not “dirt cheap,” but certainly affordable and full of value, especially when you remember that this is in the eurozone.
No wonder Portugal still consistently ranks as one of the more affordable Western European countries for travelers.
The Algarve
The moment I step off the train in Algarve (Portugal’s southern coastal region), I’m greeted by palm trees, a salty breeze, and English voices – lots of them. The Algarve has long been a favorite for holidaymakers, and I quickly see why: gorgeous cliff-backed beaches, golf courses, and resorts dot the coast. But with popularity comes prices.
In peak summer (July–August), the Algarve’s costs can soar, rivaling the expense of other Mediterranean hotspots. Mid-range travelers should be prepared: if you come in high season, expect to pay 30–50% more for hotels and tours than in the shoulder season.
I purposely timed my visit for late September, hoping for mild weather and gentler prices. Even so, I notice that in hotspots like Albufeira, Lagos, or Vilamoura, the tourism boom has pushed things into a higher bracket compared to a decade ago.
Accommodation in the Algarve offers everything from budget guesthouses to luxury villas. But mid-range options (like a nice hotel or resort with a pool) easily run €120–€180 a night near the coast in summer.
During my September trip, I find a pleasant hotel in Lagos for €110/night – a fair off-peak deal. Chatting with the owner, I learn that rooms were going for €160+ in August and fully booked.
The demand is huge; 2023 saw record tourist numbers in Portugal, and the Algarve was swamped with foreign visitors, especially Brits and Germans. This surge has a side effect: some Portuguese travelers now avoid the Algarve in summer, opting for cheaper beaches in Spain, because prices (and crowds) have gotten so intense.
It’s a telling sign when locals find their own paradise too pricey. Mid-range travelers can still find value by staying a bit inland or in smaller coastal towns. I opt one night for a rural guesthouse in the Algarve hinterland, where a quaint farmhouse B&B costs me €75 and offers a quiet contrast to the tourist hubs.
Food and drink by the beach tend to come at a small “sunshine surcharge.” Along the Algarve strip, a seafood dinner with an ocean view will cost more than a similar meal up north. I treat myself to grilled peri-peri prawns in Albufeira – delicious, but the bill is €40 per person with drinks.
On another day, I discover a local churrasqueira (grill house) in a village a few kilometers from the beach, where I feast on roast chicken, fries, salad, and wine for under €15. The difference is striking. The Algarve, particularly the touristy waterfront areas, can feel about 20-30% more expensive for dining out than Lisbon or Porto.
Yet, by venturing just a bit off the beaten path, you can still eat cheaply. One strategy I use: have lunch as your big meal (many restaurants offer cheaper midday specials) and then a light snack or picnic for dinner while watching the sunset over the cliffs. Groceries in Portugal remain inexpensive, so picking up some fresh bread, cheese, and fruit from a local market is both a cultural experience and a budget win.
Transportation in the Algarve poses an interesting dilemma. The region is more spread out and public transport is less convenient than in the cities.
Trains and buses do connect the main towns (and a regional bus from Lagos to Spanish border towns is around €5-15), but many visitors rent cars to explore hidden beaches. Rental car prices have fluctuated – they spiked in 2022 with vehicle shortages, then stabilized.
In 2025, a mid-range rental might be around €40–€60 per day in summer, plus fuel (gasoline here is about €1.70/L, slightly above the EU average). As a cost-conscious traveler, I skipped the car and used trains, which was doable if not super fast. If you factor in car rental, the Algarve quickly becomes more expensive than other parts of Portugal.
On the plus side, a lot of the Algarve’s pleasures are free: sunbathing on Praia Dona Ana, hiking the coastal trail near Carvoeiro, or exploring old town Faro’s cobbled streets. Even popular attractions like the Benagil sea cave can be seen by just renting a kayak for €20, rather than an expensive guided tour.
In summary, the Algarve can still be enjoyed on a mid-range budget, but you have to be mindful of seasonality and location. Going in the off-season (spring or fall) will stretch your euros much further – I noticed many hotel rates drop by 30% or more outside summer.
And while the region overall is pricier than, say, rural Alentejo, it’s still often cheaper than the French Riviera or Greek islands. I found the Algarve’s value-for-money to be decent: yes, I paid a bit more for that beachside lifestyle, but I also got what I paid for – incredible scenery and relaxed vibes.
The key is balance: splurge on the unique experiences (like a boat trip to see wild dolphins at €50, which was worth every cent) and save elsewhere. With some planning, Portugal’s sun-soaked south can be the highlight of a trip without blowing the budget.
Central and Rural Portugal
After the Algarve, I point my compass to the interior – the central and northern countryside where tourists are fewer and prices often pleasantly low. This is the Portugal of quiet schist villages, olive groves, and historic university towns like Coimbra.
As a mid-range traveler, I find that venturing away from the tourist centers yields some of the best bargains in the country. It feels like stepping back in time cost-wise (and in a good way).
Take Coimbra, for example – home to one of Europe’s oldest universities and steeped in culture, but far less visited than Lisbon or Porto. Here I stay in a lovely boutique hotel (set in a converted monastery with heaps of character) for €90 a night, a rate unthinkable for similar charm in a big city.
Even high-end options in Coimbra, like a 5-star heritage hotel, top out around €180/night, which is what a basic chain hotel might cost in central London. In smaller towns of central Portugal, I frequently encountered tidy guesthouses for €50–€70 per night.
One night in the Douro Valley, I rent a room at a vineyard agriturismo for €80, including breakfast with a view of the grape terraces – an unbeatable deal and an experience in itself. For travelers who don’t mind being outside the main hotspots, Portugal’s interior offers tremendous value and a more authentic vibe.
Food in rural Portugal is both delicious and inexpensive. Driving through the Alentejo region (central-south), I stop at a roadside tavern in a whitewashed village. The menu has no English, and the proprietor simply brings out what’s fresh: bread, olives, lamb stew, house wine.
I brace for a high bill (the spread could have fed three people), but it comes to €15 total. I almost protest that it’s too low. Indeed, in many countryside towns, you can feast on local specialties for a fraction of city prices. Alentejo is known for hearty dishes like porco preto (black pork) and rich red wines – I enjoy a rustic dinner in Evora with all the trimmings for under €20.
Inland northern Portugal (the Minho and Trás-os-Montes areas) is similarly kind to the wallet. You might pay €1 for an espresso or €0.70 for a bakery fresh papo-seco roll, prices that remind me of decades past. Even fuel for my rental car seems to last longer on these leisurely country drives – perhaps because distances are shorter and there’s less traffic.
One of my favorite cost anecdotes comes from a tiny town in the Serra da Estrela mountains. I was craving a midday snack and found a local cheese shop. The owner offered a tasting of the region’s famed queijo da serra (a silky sheep’s milk cheese). I ended up buying a wheel of it for €5, and she threw in a loaf of bread free, insisting I must be hungry.
Moments like that show how in Portugal’s heartland, hospitality and affordability go hand in hand. It’s not that inflation hasn’t touched these areas – it has, but the starting point was so low that things are still cheap to an outsider.
Locals might grumble that coffee has gone up by 10 cents, but as a traveler I’m paying far less here for high quality experiences (like wine tastings at family-run wineries for €5 or entry to a medieval castle for €3) than I would in many other countries.
Moving through the countryside, I realize another thing: transportation savings. In cities I relied on transit, but in rural zones having a rental car (or a tour) is often necessary. Still, even here I find deals. Regional trains and buses do connect many towns; for instance, I took a regional train from Coimbra into the Serra do Bussaco for just €4.
And when I do rent a car for a day to explore remote villages, I manage to do it through a local agency at a very reasonable rate (they charged me €35 for a 24-hour manual car, unlimited mileage). Outside the urban centers, parking is usually free or very cheap – a relief after feeding meters in Lisbon.
It’s little savings like this that add up: a mid-range traveler in rural Portugal might comfortably spend €70–€100 per day total, including lodging, meals, and transport, which is terrific value in 2025 Europe.
In the heart of Portugal, not only did I stretch my budget, I also gained rich experiences – intimate encounters with Portuguese culture that often cost nothing at all.
I joined a village festival in the Douro where folk music and wine flowed freely under the stars. I hiked in Peneda-Gerês National Park (no entrance fee) and cooled off in natural river pools.
These moments reaffirmed that Portugal still has a low-cost soul if you know where to look. The country’s quieter regions provide a balance to the higher prices of Lisbon or the Algarve, and incorporating them into your itinerary can keep your overall travel expenses very reasonable.
Mid-Range Traveler’s Budget Snapshot
To illustrate the current costs, let’s walk through a hypothetical day of spending as a mid-range traveler in Portugal (say, in Lisbon or a similar city). Breakfast at a local café: a galão (milky coffee) and a pastry will set you back around €4–€5.
Morning activity: perhaps you visit the famous São Jorge Castle in Lisbon, entry €15, or the Pena Palace in Sintra for €20 – typical major attraction prices. Lunch: you find a restaurant with a prato do dia special – a full meal for €10 (as I often did).
Transportation: you get around using the metro/trams with a day pass €6.80 (or if just a ride or two, a couple of euros each). In the afternoon, maybe you grab a gelato or a cold drink for €3 and wander free sights like a park or street market.
Dinner: you choose a well-reviewed mid-range restaurant. Perhaps you spend €25–€30 on a nice dinner with a drink (this might include a starter, main, dessert split with a travel partner, and a glass of wine). Finish the night with a fado show cover charge €10 (if in Lisbon’s Alfama) or just a couple of €3 beers at a bar.
Add it up and this full, activity-packed day comes out to roughly €70–€90 per person. If you’re a couple sharing some costs (like taxis or wine bottles), the per-person cost could be even a bit less. And note, I haven’t included lodging – add the mid-range hotel for, say, €120 (or €60 per person if sharing a double room).
That brings the daily total to around €130–€150 per person for a very comfortable day of travel in Lisbon. You could trim this by eating cheaper or doing a free museum, or you could balloon it by choosing a pricey restaurant – but the point is that a rich experience is achievable on a moderate budget.
I recall spending more per day in Rome for a similar mix of activities, and definitely more on Greek islands where eating and lodging were higher.
Portugal’s Value Proposition in 2025
Portugal is not the rock-bottom bargain it once was – those days when it was a secret haven for budget travelers are fading as the world has discovered its charms.
Prices in 2024–2025 are undeniably higher than a few years ago. The pandemic recovery brought record tourism and with it a spike in demand; inflation bit into everything from energy to food costs; and popular areas like Lisbon and the Algarve have aligned more with Western European price levels.
Yet, Portugal remains remarkably good value in context. Compared to most of Western Europe – and certainly compared to North America – it is still a place where a mid-range traveler’s euro stretches far.
You can dine on gourmet seafood for what a pizza might cost in London. You can stay in a historical pousada (inn) that would be a luxury splurge elsewhere, but here it’s within reach.
Entry fees and transit fares are moderate. And importantly, the quality of experience you get in Portugal for each euro is very high. It’s a country that offers rich cultural experiences, stunning landscapes, and world-class food at a relative discount.
For mid-range travelers, I’d conclude that Portugal strikes a fantastic balance. You can indulge in a bit of luxury here and there (because it’s cheaper than elsewhere), and you can save on basics without feeling like you’re skimping.
While you should budget a bit more than you might have pre-2020, you’ll still likely spend less here than in neighboring countries for a similar holiday. One British travel report recently warned that costs in Spain, Greece, and Portugal are rising fast for tourists – true, but Portugal started from a lower base and continues to be gentler on the budget overall.
Personally, I leave Portugal feeling that it still offers value for money in 2025. The charm and hospitality are intact, and thankfully you don’t need to be a millionaire to enjoy them.
