Exploring caves and grottos around Albufeira, Portugal. -- Photos by Alison Downie

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Lisbon is booming.

New hotels are going up, old buildings are being renovated or have already been renovated, roads are being improved and various projects to attract more tourists are under way.

In the past few years, the number of hotel rooms in Portugal's historic capital city has increased by 25%. It draws more tourists than any other city in the country and is a top European holiday destination.

Lisbon has a lot to offer tourists. Prices are lower than many places in Europe, the climate is mild year-round, food and wines are wonderful, and it's one of the safest cities --just beware of pickpockets in crowded areas.

In its thousand years of history, this charming city has withstood earthquakes, a tsunami and fires. Formerly a major trading port, about 650,000 people now live in central Lisbon with another 2.5 million in the suburbs.

Its narrow cobblestone streets and alleys make driving difficult, so use public transit and explore on foot. The tiled building facades, wrought-iron balconies where residents hang their laundry, unique architecture and red roof tops give this city its character. The view from Saint George Castle, the fortress built in the 12th century that overlooks the city, is not to be missed.

Signature Vacations is making it easy for Canadians to visit Portugal. This year they began offering weekly flights and accommodation packages to Lisbon and the Algarve.

"The destination appealed to us as we saw it was not featured by any other mainstream Canadian package holiday, yet had a good profile in the Canadian market, notably for winter long-stays," says Martha Chapman, Signature's manager of corporate communications.

For those who want to explore the country, packages that include car rentals are available. Tourist officials say Canadians stay an average of three weeks when they visit and they enjoy taking excursions to notable places.

From Lisbon, you can hop on the highway and be in the Algarve in less than three hours. The Algarve is the 200-km province along the southern coast of Portugal where you'll find miles and miles of golden sand, rocky beaches, sheltered bays, grottos and cliffs that offer unbelievable views.

"The Algarve gets more sunshine than any other place in Europe," says Natalie de Jesus from the local tourist association.

For those who like the nightlife, Albufeira is a hot spot, drawing lots of foreign tourists, as well as many Portuguese. It's about a 40-minute drive from Faro Airport.

Albufeira was one of the first cities in Portugal to develop a tourist industry and it remains popular with holidaying Brits and Germans. During summer months, the beaches and bars are packed with tourists.

For those who prefer things a little quieter, the southern coast is dotted with quaint little fishing villages and towns that haven't been touched by tourism.

Colourful apartments overlook the new marina in Albufeira, Algarve. Some can be rented by tourists for long stays.

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BOTTOM LINE

MORE INFORMATION: In the summer, Signature Vacations offers air only Toronto to Lisbon, rental cars, air and hotel packages as well as air and hotel packages to the Algarve, with a car included. In the winter, it switches to air only Toronto to Faro, rental cars, and air and hotel packages to the Algarve.

In Lisbon, a stay at the four-star Fenix Lisboa, which is within walking distance of many historic sites, for one week in July or August, including airfare and daily breakfast, costs $1,519, plus tax. Three weeks air only to Lisbon in July is $889, plus tax.

In the Algarve, you can stay at the four-star Bella Vista in Albufeira for $2,359 plus tax per person, double occupancy for two weeks, July 15-29, which includes airfare, car rental and daily breakfast. Prices change so visit Signature's website, signaturevacations.com, for up to the minute prices

Architectural details give character to old buildings like this church.

For more on Portugal, visit the Portuguese Trade and Tourism Commission at visitportugal.com.

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10 REASONS YOU MIGHT FALL IN LOVE WITH PORTUGAL

- BEACHES

There are miles and miles of them and depending on what coast you are on, the scenery can be completely different. Some are crowded and others are just waiting to be explored. All kinds of water sports are available including deep sea fishing, para-sailing, jet skiing and surfing.

One of the beautiful beaches near Albufeira, the top tourist destination in the Algarve.

- THE SUN

They say it always shines in the Algarve except for one week a year when it rains. The area gets about 3,000 hours of sunshine each year. While all of Portugal is warm from April to October, the Algarve is mild throughout the year.

- FOOD

Portugal is a seafood lover's paradise. Fresh fish and seafood are abundant and relatively cheap. Favourites are monkfish, tuna and grilled sardines.

A group of tourists go for a sail in the Algarve, where all sorts of water sports are available.

The most traditional fish dishes use bacalhau (dried salt cod), which the Portuguese claim can be prepared 365 different ways. Beware though, salt cod can be a bit too fishy for some. Portuguese sausage is also worth trying and many restaurants offer a variety of grilled meats.

Meals are served with a platter of local vegetables, and on the side olives, goat cheese, carrots mixed with cilantro and chopped garlic and delicious breads and buns. Save room for dessert because the pastries and tarts are incredible.

In restaurants, you usually get more food than you can eat.

For those who miss North American food, Pizza Hut, McDonald's and KFC have franchises in the tourist areas.

- DRINK

Local table wines are inexpensive, but you have to try the fortified port and Madeira, which the country is famous for. There are also local firewaters, some made with figs or cherries, that will warm you up.

- GOLF

Portugal is a golfer's dream boasting more than 60 courses, with more than two dozen of those located in the Algarve. Many hotels offer golf packages, some unlimited.

- HISTORY

Portugal has a long, rich history and has taken care to preserve castles, churches, old buildings and monuments for future generations. You can walk among Roman ruins or tour centuries-old castles. The one castle not to be missed is in Sintra. It is spectacular, a combination of Gothic style with Moorish influences. You can easily spend a day there exploring the nooks and crannies.

- FADO

The traditional music of Portugal steeped in emotion is served up at a variety of cafes and clubs in Lisbon, mostly in the Alfama and Bairro Alto districts. One of the best is Joao de Praca where you can enjoy a fine meal while being entertained by male and female Fado singers accompanied by two or three guitarists.

You don't have to understand the lyrics to enjoy the music.

"It's like the blues in Portuguese style with Portuguese instruments," says Rodrigo Costa Felix, 33, who has been singing Fado since he was 17. "Emotion is what we sing about, all sorts of emotion."

- SHOPPING

While shopping centres called "Centros Comerciais," featuring fashionable shops and designer clothing have become popular, there are still outdoor markets that are filled with character. In Lisbon, there is a large outdoor market every Tuesday and Saturday. Formerly known as the "Thieves Market," you can find everything from roller skates to fossils.

- ACCOMMODATION

A wide range of accommodation is available from five-star hotels to self-service apartment units for those who want to stay more than a few weeks.

But the most unique places to stay are at the Pousadas. These are old historic buildings such as castles, palaces, convents, monasteries and old manor houses that have been converted into four- or five-star hotels.

Traditionally, when a Portuguese couple married, they would spend their honeymoon touring the country staying in Pousadas.

- THE PEOPLE

The Portuguese are warm and friendly and welcome tourists. Many speak English, particularly in the tourist areas.