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On further searching I have just about decided that Olhao would be a good place for carless travellers to be based - but all self-catering that I can find seems full for last week of Oct. I am wondering about Fuseta which has a few places and says it is 8 km away. Does anyone know the "lay of the land" here. What is it really like and does it have any public transport? Not sure of spelling - sometimes it appears as Fuzeta.

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Fuzeta's much smaller than Olhao, but it's got a great beach and cafes.
You still have the same public transport (buses to Olhao, Faro, Tavira, etc), and it's quite calm and nice.
Depends really on what you's like to do.

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