Portugal/Spain in May

You will need to drop your rental car off when leaving one country for another or face huge drop fees. We were quoted a fee of 1000€.
It isn’t hard to take a taxi or bus across the border to pick up another car.
We had a driver in Porto take us to Vigo to pick up our car. We left Vigo and drove to seaside Baiona in Galicia.
We always use AutoEurope for car rentals.

I've never heard of being able to rent a car open-ended. I suspect that isn't going to work out. (They want to know when it will be back so they can rent it to someone else.)

While public transit can work in many places, it does not work well (efficiently) in other places (after all, it's designed for locals, not tourists). You can try, but (especially in rural areas) you will burn though a lot of time, still be limited in where you can get to, and miss out -- unless you have LOTS of time. In those places, there's no substitute for having your own car.

It's almost always possible to make your lodging arrangements as you go. But that's almost always going to mean that 1) you pick from the "dregs" that everyone else has passed on, or 2) you may have to pay through the nose because the bargains were all snatched up long before, or 3) you settle for something less optimal, maybe it's out of town, far from the places you actually want to be, or it's got "issues" or some combination of all the above. The "best" places usually get booked up early (however you define "best"). If you don't care about the particulars, you're not picky, you're willing to pay more for less, and you just want some place to sleep, you can usually accomplish that. But you will also be spending some of your precious vacation hunting and shopping and choosing where to sleep. To me, that's a task that I can accomplish in advance from the comfort of my home, where I have fast, reliable internet (plus patience and plenty of time to focus on it), and that's how I get better results.

For me (and I think for most folks) the most precious, most constrained resource we have is time - specifically, usable time while when we are at our destination. I'd rather spend an extra hour or two enjoying a glass of wine and a plate of pasta with a view of the setting sun at my destination, rather than spend those hours looking at screens and trying desperately to figure out where to sleep that night, what I'm willing to pay for, and what I'll put up with (been there, done that). You may feel differently, but I try to optimize the time when I'm away from home. That's why you go!

A side trip to Morocco? Great if you can spend the time to see the good stuff (that's all inland, far from the grotesque, touristy day-trip ferry ports on the north coast). Morocco is awesome, but like any great destination, it needs some time. Don't try to do a quickie day trip, Morocco (like Italy or France) needs more than a few days to do it justice (I consider a week to 10 days as a good minimal).

Hope that helps.

In my experience you can probably get away with last minute bookings in smaller towns, but I would not try in bigger centres, ie Lisbon etc. As well you are travelling at a popular time of year, that could become hot, so if you want air conditioning that is a factor.
We like to book our city stays and our weekends, as these can get booked up. Leaving a little flexibility through the week for smaller towns that we may only want one night in, or might like to stay longer ( ie Evora etc).

You don't say how long you think you will have. Bear in mind you cannot stay longer than 90 days ( Schengen zone).

For rental car, cars in Portugal use a different transponder systen on the major highways then in Spain, so that would also be an issue dropping in a different coutry. You won't want a car in Lisbon or Porto. You could look at picking up after Lisbon, dropping car in Faro, and taking bus across border to Seville as one example. I don't know Spain as well to make suggestions.

I appreciate these responses--ALL very helpful. I think I will try to book lodging and work out of those locations as home base with our rental car.

I love the idea of taking a trip and making decisions "on the fly." And traveling with a smartphone or tablet makes arranging for rooms a few days ahead easy. But most experienced travelers here know when they're making their first stop and where and when they're flying home--Open Jaw or Multi City reservations. And don't forget that the Schengen Agreement limits most U.S. citizens to 90 days of visiting out of 180 days within most of the EU.

Your trip might be more enjoyable if you make a decisions on how long you'll be in Europe and make a baseline itinerary that's subject to change day by day. Like go to Lisbon before visiting 4 cities in Spain. Then take a fast train from Barcelona to Paris. Fly on a budget European airline down to Rome and take a train back up to Florence and Venice. Then fly over to Budapest and take trains to Bratislava, Vienna and Prague. Take a shuttle service down to Cesky Krumlov and another shuttle to Salzburg. Then take a train in to Munich and fly home from there. You can fill in the blanks as you go along.

Remember that major European cities are worthy of a minimum of 4 days there.
Countries like Spain, France and Germany are larger than most people realize.
Lastly, there's no way anyone can see everything in 90 days.
And the chances are that you'll be back.

I regularly spend up to 4-1/2 months in Europe (part of the time being outside the Schengen Zone, of course) between April and October without pre-booking all my hotels. Since I started these long trips in 2015, the lead time on my hotel bookings has gradually crept up from 24-48 hours to 36-96 hours, and there are plenty of places where I have booked considerably farther ahead because of the local demand situation (which is affected by holidays as well as the general level of tourist traffic). I think David has summed up the issues very well. When you're using a car, you have the option of looking for lodgings (ahead of time, online) in smaller towns that would be inconvenient for public-transportation users like me, so I think winging it is less risky for travelers with cars.

However, there are issues with using a rental car for a wide-ranging trip--the aforementioned monstrous international drop charge that will probably be assessed being perhaps the most obvious. Other factors to consider are the costs of fuel and parking, the fact that in large cities a car is an impediment rather than a benefit, and the likelihood that longer distances between major cities will be covered more slowly by car than by train. It really depends heavily on your itinerary.

If you begin your trip in northern Portugal on May 7, it will be getting pretty warm by the time you get to southern Spain, assuming you plan to include Andalucia in your itinerary. I would definitely hit southern Spain before northern Spain, because the north coast is likely to be moderate in temperature almost every day even in mid-summer.

Be aware that technically, you may be asked to show your return ticket when entering countries.

You can’t hire a car with an open ended return - they need to know when it’s available for the next booker. How would they know how much to charge you? You will pay more to take the car from Portugal into Spain even if you are returning it to Portugal and significantly more with a one way drop.

If you are visiting areas or places during festivals, then you will need to book ahead, particularly once you get into June. Booking.com, VRBO, Trip Advisor rentals and if pushed Airbnb will be used, even if booking on the day of travel.

The ferry from Gibraltar doesn’t really get you to where you would want to be in Morocco. Morocco needs a week or 10 days to scratch the surface. Fly to Marrakesh.

Thanks everyone! This is definitely helpful and we are taking all of this advice into consideration as we plan. I can't imagine we'll be staying much longer than 30 days.

I am researching Spain and Portugal at the moment, Rick recommends not going from Gibraltar to Morocco in his guidebooks but he does not specify why, he instead suggests daytripping from Tarifa, Spain on their 1 hour fast boat to Tangier, Morocco