Lisbon, Western Europe's most affordable capital: The dream spot for budget travellers

Ricardo points out the spindling tower of the basilica at the other end of the park. 

"I'm not going to force you to go into a church," he says. "We've got about 130 of them in the city and they're all the same to us. But it's free to go in if you really want to.

"Now go run through the park, and pretend you're kids again."

It's fair to say that We Hate Tourism Tours doesn't stick to safe and easy bus-tour formulas, although the name should probably give that away. Chugging around the city in the back of ancient Portuguese-made pseudo-Jeeps, the emphasis is on sharing local knowledge rather than traipsing through a predictable highlights reel. We're given an extensive run-down on where does the best bifanas – naughty but great greasy pork sandwiches – and see impromptu fado music performances without tourist trap entrance fees.

In Bairro Alto there are tips on how to do a night out the local way. "Hardly anyone buys drinks in the bars any more," says Ricardo. "They get cheap beers and a plastic cup from the convenience stores then wander the streets."

Unfusty tours and Bairro Alto's hedonistic nightlife are two key reasons why Lisbon is popular with budget travellers. Cost is part of the equation – Lisbon is western Europe's most affordable capital, and you can eat and drink heartily for a relative pittance. And then there is the hostel scene.

When specialist booking site Hostelworld released its user rating-generated list of the best hostels in the world last year, the top four were in Lisbon. Those four – Living Lounge, Yes, Home and Travellers House – share many similarities: a ruthlessly meticulous attitude to cleanliness, a surprisingly good quality breakfast and there all-sorts of bonding activities such as group dinners and organised bar-crawls. Individual reading lights for all dorm beds are common, as are shelves or bags for storing phones and books while on the top bunk.

But there are differences, too. At Living Lounge, each room is designed by an different artist. At Home, the reception is also a bar and the owner's mum cooks a slap-up three-course meal, including as much wine and beer as you can drink, for about $15. Yes throws in a free shot at 11.30pm and mural art on the staircases. Travellers House plays up its gorgeous, old building with clever use of antique furniture and underbed lockers containing safes.

Why the concentration of excellent hostels? Living Lounge co-owner Valter Pratas it's partly because the owners travel themselves. "We stayed in hostels that were like hospitals, with cold service, curfews and lots of signs telling you what not to do. We could see what we didn't want, and did the opposite."

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The relative novelty of hostels in Lisbon helps, too. "When we started nine years ago, there wasn't an established hostel scene here. And when the first one has high standards, any other new ones have to try and match it." 

Pedro Barbosa, manager of Yes, says local character helps. "The city is very friendly – people like to answer and explain," he says. "The Portuguese are very skilled with languages, so it's easy to get staff who speak three or four languages."

But perhaps unique to Lisbon is the neglect of the city centre. Until recently, it has been something of a dead zone – which made it cheap for hostels to set up in buildings that, to visitors, are in prime locations. "This building cost us one-fifth of the price of a similar one in, say, Madrid," says Barbosa. "That allows us to give a lot more and charge less."

At 11.45pm, the suitably lubricated band of pub crawlers heads out of Yes and up the hill to Bairro Alto. The area seems so quiet and residential during the day, but every unassuming door seems to lead to a small bar at night. Signs compete for gaudiness in their $7 mojito offerings, and each bar seems to have its own place on the scale from demure to rowdy. 

Sure enough, though, most people seem to be wandering the cobbled streets with plastic cups in hand. The little shops – which stock little more than Kit Kats and booze – are doling out large bottles of beer, shot-sized doses of moscatel wine and impromptu vodka mixers. By about 2am, there's a mass drift towards the lookout over the city centre. The atmosphere is gloriously good-natured; a free-flowing party that, even for the not so youthful, encapsulates Lisbon's youthful spirit.

TRIP NOTES

MORE INFORMATION

See visitLisboa.com 

GETTING THERE

Emirates offers one-stop flights to Lisbon from both Sydney and Melbourne, changing planes in Dubai; see emirates.com/au.

STAYING THERE

Living Lounge has dorm beds from $19, twins from $76; see Livingloungehostel.com. Yes has dorms beds from $16, private rooms from $107; see Yeshostels.com. Home has dorm beds from $22; see homelisbonhostel.com. Travellers House has dorm beds from $22, en suite doubles from $107; see travellershouse.com.

TOURING THERE

We Hate Tourism Tours offers its three-hour King Of The Hills Tour for $38; see wehatetourismtours.com.   

David Whitley was a guest of Turismo de Lisboa.

FIVE LISBON BARGAINS

NOVELTY TRANSPORT

A one-day public transport card costs $9.10 but includes Lisbon's array of novelty transport. Tram 28 goes along the city's best sightseeing route, the funicular railways go up the steep hills and the Eiffel-esque Santa Justa Elevator connects the centre with Bairro Alto.

METRO ART

Most of Lisbon's metro stations have specially commissioned tile art inside them – turning underground journeys into a budget gallery hop. The Parque and Oriente stations are particularly impressive.

MUSEU NACIONAL DO AZULEJO

For the world's most extraordinary collection of tile art head to the Museu Nacional do Azulejo​. It covers the history of Portugal's signature artform and the church the museum is built around is a jaw-dropping masterpiece. See museudoazulejo.pt.

WINE TASTING

On Praca do Comercio​, Lisbon's main square, Wines of Portugal showcases wines from different regions of the country, with tasting measures costing about 75¢. See viniportugal.pt

FEIRA DA LADRA​

On Tuesdays and Saturdays, Lisbon's sprawling flea market is far more about socialising than shopping. The quality of goods is iffy, but the people-watching is world class.

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