Best Areas to Stay in Lisbon for a Relaxing Vacation

7 min read

Lisbon is a city where old-world charm meets contemporary, and hilltop views lead to waterfront strolls. While the capital of Portugal is famously walkable and connected by trams, choosing the right neighbourhood to stay in can make all the difference, especially if you’re looking for a laid-back and relaxing escape.

Whether you’re drawn to Lisbon’s Moorish roots or prefer to sip espresso in Belle-Époque cafés, here is where to stay in Lisbon and the best hotels in Lisbon for a soothing, memorable vacation.

Top Areas to Choose for a Stay in Lisbon

Alfama – For Historic Charm and Fado Nights

Being Lisbon's oldest neighborhood, Alfama is quite literally a step back in time. Imagine cobblestone streets, bougainvillea-draped balconies, and spontaneous fado singing ringing out down the streets. This neighborhood has a laid-back, romantic atmosphere that is ideal for leisurely strolls and evening promenades. Stop by the famous Castle of St. George and Lisbon Cathedral, then relax at a rooftop café with views over the Tagus River.

Recommended stays:

Memmo Alfama – A contemporary hotel hidden away in the quarter's kasbah-like streets, with panoramic views from the rooftop.
Santa Clara 1728 – Simple, stylish, and serene, perfect for design enthusiasts.
Santiago de Alfama – Boutique hotel with a friendly street-level café and individually styled rooms.

Best Areas to Stay in Lisbon

Príncipe Real – Lushy, Hip, and Relaxed

If you like to inhabit one of the hippest yet quietest of Lisbon's neighbourhoods, look no further than Príncipe Real. A former tranquil residential area, it has emerged as a happening centre for fashion boutiques, hip restaurants, and green squares. It has a more relaxed vibe, but you're rarely more than three minutes from an emerald park or intimate vino bar. Ideal for couples and independent explorers looking for peace with city style. This neighbourhood has some of the best hotels in Lisbon.

Recommended stays:

Palácio Príncipe Real – One of the best hotels in Lisbon, it is a tranquil boutique hotel with garden and pool in a 19th-century palace.
Memmo Príncipe Real – Features amazing views, chic interiors, and superb on-site dining.
The Vintage Hotel & Spa – Discreet innovation with rooftop bar and complete spa facilities.

Chiado – Sophisticated and Culturally Rich

Chiado is Lisbon’s literary and artistic heart. With its classic cafés, tiled façades, and elegant streets, this neighbourhood blends old-world sophistication with a modern lifestyle. It’s perfect if you’re looking to relax with a touch of culture perhaps start your day in a pastelaria and end it at a rooftop bar watching the sun dip over the city.

Recommended stays:

Bairro Alto Hotel – Elegant, legendary, and home to one of the city's most sought-after rooftop gardens.
The Lumiares – A penthouse retreat with lavish views, spa options, and apartment-style accommodations.
Verride Palácio Santa Catarina – High-end and peaceful, complete with rooftop pool and unobstructed skyline views.

Avenida da Liberdade – Timeless Comfort in the Heart of the City

If you are wondering where to stay in Lisbon Portugal and want sophistication, easy access, and upscale city break, Avenida da Liberdade has wide avenues, luxury shops, and five-star hotels. Upscale and central but quite perfect for those wanting modern comforts without losing out on relaxation.

Recommended places to stay:

Four Seasons Hotel Ritz Lisbon – Known to be one of the best hotels Lisbon it is spacious and elegant with spa, fitness center, and impeccable service.
Sublime Lisboa – Another name among the best Lisbon hotels, it is a stylish townhouse and Italian fine dining restaurant.
Altis Avenida – Central and chic with rooftop restaurant and sophisticated rooms.

Baixa – Central Convenience Without the Crowds

Baixa is Lisbon's city center, but don't be misled, it's one of the flattest and easiest to get around neighbourhoods, so it's a surprisingly peaceful and simple area to navigate. You may also find many cheap hotels in Lisbon in this area . It has neoclassical buildings, warm piazzas, and an easy walk to the river, making it ideal for tourists who want it all in front of them but peace as well.

Recommended stays:

AlmaLusa Baixa/Chiado – Warm and welcoming with a local atmosphere and ambiance.
Pousada Lisboa Praça do Comércio – Upscale in a restored building on the central square.
Pestana CR7 Lisboa – Chic and lively, great for young travelers or families.

cheap hotels to Stay in Lisbon

Belém – Riverside Relaxation and Cultural Treasures

Close enough to drive into the city centre, Belém is a tranquil oasis along the river and is without a doubt one of the best neighbourhoods to stay in Lisbon. Home to some of the city's most famous landmarks and the world's first-ever Pastéis de Belém café, this quarter provides serenity, museums, and riverbank walks. It's an excellent choice if you'd prefer to alternate between sightseeing and relaxation.

Recommended stays:

Altis Belém Hotel & Spa – stylish and modern with river views from its terrace and one-Michelin-starred restaurant.
Pestana Palace Lisboa – Grand and majestic, ideal for a king-size retreat.