Albufeira or Santa Ponsa?

Albufeira is a great place but I'm biased as I go to Portugal for a couple of months every year. Old Town Albufeira is basically in a bowl surrounded by hills so yes it's hilly but you can get around. I agree with Roo's answer except for the 40 euros for a meal for two. There are places to get meals for less. Be sure to look for daily specials particularly prato do dia (dish of the day) which you will lots of in Old Town. Do check out tripadvisor for other travellers advice on hotels.