Pousada Palácio de Estoi, Small Luxury Hotels – Discovering the Algarve From an Aristocratic Perspective

Portugal’s southern coast is a favourite destination for those seeking some of the best beaches in Southern Europe. Yet the Algarve has plenty more to offer, including fascinating and authentic places to stay like the historic Pousada Palacio Estoi hotel (one of our favourite luxury hotels in the Algarve), writes Andrew Forbes.

Found 10 kilometres from the regional capital of Faro, and an easy transfer from its international airport, one finds the Pousada Palacio Estoi, a member of Small Luxury Hotels of the World.

Portuguese Pousadas

Pousadas are a network of notable historic buildings like castles, convents and palatial estates that have been remodelled and reimagined as upscale hotels. They make for a fascinating guest experience, as one gets to be immersed in some local history and feel connected to the history of the destination.

The Hotel & Gardens

Pousada Palacio Estoi is no exception. The main property is truly striking. It’s a Baroque 18th-century palace, modelled on Portuguese Royal residences.

This extravagant aristocratic home has been restored and now offers beautiful public spaces for the hotel, with drawing rooms that look out over the classical gardens that include fountains, pools and even a romantic grotto.

Guest facilities such as the health club with heated indoor pool, hot tub, Turkish bath, sauna, tropical shower and gym; the intimate ‘Magic Spa’; and the 63 guest rooms are all within a contemporary wing, constructed in 2009 when the property opened as a small luxury hotel. Rooms are spacious, light-filled with floor to ceiling terrace door windows and a minimalist look & feel.

Outside the contemporary wing are modern style gardens of grasses, a large outdoor pool and expansive sun terraces with loungers, offering views of the dusty pink palace and out across the countryside towards the coast.

Below are the historic gardens, well worth a wonder, to discover the old tea houses, the spectacular Portuguese tiled stair-cases and the romantic fountains.

Welcome and Check-in

Throughout my stay, the team were genuinely welcoming and friendly. Filomena on reception made swift work of check-in and helped us with our bags (there were no doormen). Later another colleague Monica provided a personal welcome and offered a tour of the palace.

the palace is fascinating

If you get a chance, do take a short tour, as the property is fascinating. The old chapel is charming, with its unusual tiled floors. Original features and fixtures throughout the palace date back to the time of the Viscount of Estoi. There are lots of little surprises, like the exceptional fresco ceiling in what is now the men’s room!

Guest Rooms

We stayed in a Superior Room, which at 28 squre metres was larger than the classic rooms and felt very spacious. The style is pared back, with white walls and dark wood detailing, allowing the bright Algarve light to be the protagonist. Floor to ceiling windows with sliding door open to a private south facing terrace.

The kind bed was very comfortable and had excellent quality linens.

Rooms have all the details you’d expect such as robes, slippers, LCD TV free Wi-Fi, mini bar. The bathroom is large, with full size tub and amenities by Portuguese perfumery Castelbel of Porto.

Although comfortable, tranquil and spacious, I did feel that the room would have benefited from just one or two more thoughtful touches in presentation, such as maybe some fresh flowers (as shown on the website), a welcome gift or other details to soften the room.

Free drinking water is not provided for guests; it is 3.60 euro a bottle – and it wasn’t presented in a very compelling or tempting way. Personally, I think a complimentary bottle of water or jug of filtered water is a nice touch for guests.



The Pousada Palacio Estoi buffet breakfast is provided in the Visconde Restaurant. Access is through the original kitchens, so take a moment to pause and see the historic details that remain including the original stove and chimney, and the original sinks, with beautiful restored tiles. You can also see what’s left the original phone system for the house.

Victoria welcomed us to the dining area and looked after us and the fellow guests during breakfast. The buffet is as one might expect, with all the most popular breakfast items as well as some local specialities such as those delicious Pasteis de Belem cream tarts.


The restaurant has a charming terrace for the season, offering a romantic setting for summer evening meals.

menu reflects not just the seasons but also specialities of the Algarve…

I chose a salad with local goat’s cheese, and then the seasonal pumpkin risotto with saffron. As you might expect for the Algarve, there is also plenty of local fish and seafood, including the restaurant’s signature ‘cataplana’ seafood dish. These copper cooking pots are iconic of the region and reflect Portugal’s Moorish past, as the pot is like a couscous pot or tagine. It closes like a clam shell, to retain all the flavours whilst cooking, and since it is made of copper, the heat transfer helps create a unique flavour. The local Estopeta Tuna with tomato is another local dish that is worth trying in the restaurant, as is the grilled octopus prepared in local olive oil.

Before and after dinners drinks can be enjoyed on the terrace or in the Palace Bar. The public areas and restaurant are brightly lit with chandeliers and overhead lighting. Although this showcases the Rococo design of the historic spaces, it is in my opinion very bright. I think it would be more charming to have subtle mood lighting and candles in the evening to create a more relaxing style – especially when eating and having a drink.

Faro – and beyond

The regional capital of Faro has a marina and an interesting ‘Cidade Velha’ old town with typical Iberian, Portuguese and Moorish architecture.

As a holiday destination, expect plenty of choice for bars and restaurants; whilst for nature lovers the nearby river wetlands of the Ria Formosa nature park make for a wonderful place to hike or cycle.

The beaches are stunning

Praia de Faro beach is amongst is the nearest to the twon, but with a rental car one can discover charming covers, and uncrowded beaches – many are reached by board walks or even small trains as they separated from the main coast by wetlands.

The front desk of the Pousada Palacio Estoi can arrange guided tours, golf, and activities in the natural parks such as horse riding. The hotel makes for a very convenient base to enjoy the local area, as although it is in the quiet village of Estoi, it is close to the main highway, as well as the airport.

Sign up for our newsletter for inspiration, exclusive previews & luxury tips