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There are some excellent beaches like Ilha de Tavira with soft sand and old town in the vicinity. Laos also has some beautiful beaches with an old town in the background.
Albufeira is also famous for budget travelers. The east coast has some fabulous beaches with strong current and waves. It is popular with the wind surfers.
Guincho near Cascais and Ericeira are also popular among the tourists with white water and soft sand stretches.