Portugal has sun. It has mile upon mile of beaches, including the longest coastal national park in Europe. And, think about it – the main city, linked to the principal landmass by two suspension bridges, is full of steep hills, trams and rolling fogs, and once suffered a famous earthquake. And it is indeed on the far west coast.

But Portugal is not California, and Lisbon is not San Francisco. It doesn't take long to get from Lisbon airport to your city centre hotel room – 20 minutes, max – but it's enough time to figure out that you're not going to find much of that laid-back, West Coast vibe here. The streets are handsome, but subdued. The people seem slightly uptight and rather melancholy. They speak like Russians trying to get their tongues around Spanish – expressive, but slow and slurred. Like Prague or Krakow, Lisbon feels like a town that's come late to hedonism and is still getting to grips with it. Less West Coast, then – more Eastern Europe, with better seafood.

Sure, you have the Bairro Alto, the renovated bohemian quarter of Lisbon, which is as hedonistic as anywhere in Europe after dark. But the tenor of Portugal is Atlantic, not Mediterranean. The humour of the place is wet and damp, not dry and hot. They're a bit like us, really, which is why the British are more likely to flock to southern Spain (or the Algarve, which almost everyone, the Portuguese included, regard as much the same thing). They want something different.

I had my theory all mapped out when I met the man from the Alentejo tourist board. And he was amazed. Melancholy? Pah! The Portuguese are southern, he said, emotional, expressive. Look at José Mourinho. I appealed to an Anglo-Portuguese friend for adjudication. "You're both right," she said. "The Portuguese are never quite sure where they fit in the world."

That may be why Portugal is going through another "repositioning". The West Coast of Europe has been left behind. Instead, holidaymakers are being offered a country where hillsides are as important as beaches, Roman ruins celebrated as much as golf resorts, rural vineyards promoted as well as luxury marinas. It's a more varied experience, and – compared with a stay in Tuscany or Provence – tremendously good value too. So, has Portugal come up with the right offer at the right time?

The statistics suggest it has. In 2011, 14.1 million overseas travellers visited Portugal; 3.8 per cent more than in 2010. Of those, 1.2 million were British – a 12 per cent increase. British tourists spent 6.3 million nights in Portugal, up by 14 per cent. If there was a souring of relations between British holidaymakers and package holiday Portugal after Madeleine McCann disappeared in May 2007, that's long since changed. Or, perhaps we've just started searching for a richer experience than those soulless apartments in Praia da Luz.

Which brings us to a dry, hot, sparsely populated land east and south of Lisbon. This is the Alentejo, the region at the heart of the new Portuguese plan. Most British visitors perform a heart bypass as they zoom into Lisbon or Faro, but I took the road less travelled, driving a couple of hours south from Lisbon airport to the coastal resort of Zambujeira do Mar.

Perched above a sweet little bay, Zambujeira was, well, rather subdued: there were some farmworkers having coffee, a smattering of lost- looking German teenagers and a couple of surfers. The row of cafés wasn't busy. I entered one and ordered the set lunch. An hour later, I'd had sardines, a tomato salad, prawns and dip, two ice-cold glasses of vinho verde, a big bottle of water, coffees and ice cream. Total bill: just under €12 (less than £10). Maybe that's the angle for the Alentejo tourist board: pre-euro charges.

There was more pricing from the innocent days of the escudo at the Monte da Galrixa, a farm 7km from Zambujeira, set among the ancient cork and pine trees. Here you can get a homely little apartment looking on to a quiet garden with a small swimming pool. You can go for a walk around the lake, check out the local chickens or take the dodgiest mountain bikes on the Iberian peninsula for a spin. You get organic fruit and pastries with your breakfast coffee, and all this costs from €75 (£60) a night. For two.

The Monte da Galrixa is part of a new front just opened for the foot soldiers of European tourism – the ramblers. It's one of the many rural stopovers on the Rota Vicentina, a 338km trail that winds from Cape St Vincent in the far south west, to Santiago do Cacem in the Alentejo. One branch reaches inland, the other – "The Fisherman's Trail" – along the coast. At Zambujeira, the straight, sandy roadside track is broken by smaller trails, where you can take your chances on the breezy cliffs.

The Rota Vicentina is already hugely popular with Britain's walking-pole-and-cargo-panted community. James Keane, Inntravel's regional manager for Portugal, says the Costa Vicentina has been its most popular walking holiday in 2012. He puts its success down to "real value, superb off-the-beaten-track walking, friendly hoteliers and unforgettable views of a truly unspoilt coastline". I'd like to have walked all 338km, but a very different development drew me north.

No one would call the Troia peninsula at Alentejo's northern tip "unspoilt". It's the site of Portugal's most ambitious tourism development. With its blue-turquoise waters and stretches of white sand, Troia looks as if it's been transported from the Indian Ocean and dropped on to this scrubby land of semi-deserted villages and empty tree-lined roads.

But its history is uniquely European. It was developed in the 1960s in an ideologically precarious deal between German trade unions and the authoritarian right-wing government in Lisbon. Only one of the ugly hotels from that era has survived. The new centrepiece is the Blue& Green Design Hotel, a visionary piece of coastal architecture, with wave-like balconies, which are lit up at night like futuristic beacons.

However, the hotel is also quiet. There are good deals to be had here. After all, it did open a few days before Lehman Brothers crashed, and Portugal joined Italy, Greece and Spain in the least desirable and most indebted club in Europe – the Pigs.

Now under Portuguese ownership, the new Troia resort looks like it has stepped straight out of an architect's PowerPoint presentation. It feels as if humans have yet to get their grubby paws on the oceanside cafés, walkways, the marina and shops. A little way down the coast at Comporta, there are even more ambitious plans afoot, in hopes of attracting the kind of well-to-do hedonists that can usually be found in Dubai, Marbella or Quinta do Lago. Only this time, the developers are trying to do it the green way.

For centuries, the seven villages huddled between the marshes and the coast have been an unlikely centre of rice growing. Now the real-estate people are putting it on the map. When I was there, a certain notorious Premier League footballer had been doing a spot of house-hunting. He probably won't be bothered by the paparazzi for the moment. That may change if, as Troia's marketing people predict, Hyatt and Aman go ahead with plans to build luxury hotels here.

A contact of mine in Estoril, the west-of-Lisbon resort that has had a monopoly on the stylish and affluent for a century or more, is frankly sceptical that such big players will alight in the Alentejo. He sketches out an alternative route to prosperity, where Lisbon becomes the centre of a new, well-heeled, Portuguese-speaking class from the booming economies and former colonies of Brazil and Angola. Stand in the bar of the Four Seasons or the Hotel Tiara Park in Lisbon and you can already see what he means.

Still, the Alentejo coast has plenty of space for any number of luxurious palaces. But the story of Portugal has moved inland, to the wineries and walking routes, the Douro and the Alentejo, the rivers and nature reserves. The Algarve may as well be another country. Visitors are finding their own private Tuscany or Dordogne in its unexplored hinterland. In fact, as we drove past reddish fields and eucalyptus trees in piercing sunshine and hot winds, I caught myself thinking: a few days in the Alentejo would be the perfect preparation for a trip to Australia.

So, perhaps we're no clearer in placing Portugal, geographically or emotionally. But, after five days of good food, great wine, beautiful weather, low prices and no hassle – does it really matter?

TRAVEL ESSENTIALS

Getting there

Mark Jones travelled with British Airways (0843 493 0787; ba.com), which flies to Lisbon from Heathrow. TAP Portugal (0845 601 0932; flytap.com/UK) flies from Heathrow, Gatwick and Manchester. easyJet (0843 104 5000;easyJet.com) flies from Bristol, Edinburgh, Gatwick, Liverpool and Luton.

Staying and visiting there

In Lisbon: Hotel Tiara Park, Rua Castilho (00 351 213 818 706; tiara-hotels.com). Room-only doubles from €105 (£84). The Independente hostel and Decadente restaurant, Rua de Sao Pedro de Alcantara 81 (00 351 21 346 13 81;theindependente.pt). Dorms from €10; suites from €100, B&B.

In the Alentejo: Monte da Galrixa, Lugar de Joao Frio, Sao Teotonio 00 (00 351 960 477 940; montedagalrixa.com) Doubles start at €60, including breakfast. Blue&green Design Hotel, Marina de Troia, Troia (00 351 265 498 007;troiadesignhotel.com). Doubles start at €139, including breakfast. A Escola restaurant, Estrada Nacional 253, Alcacer do Sal (00 351 265 612 816).

More information: Visitalentejo.pt/ven Visitportugal.pt Algarve Car Hire