Honestly depends on your fitness level and how much time you've got, but here's my take after doing both trams and the bus there.
Lisbon's hills are legit steep, even worse than people expect from photos. Alfama and Bairro Alto especially are brutal on foot, cobblestones plus steep grades is a rough combo. This is where hop on hop off Lisbon tours actually earn their price, way more than in flatter cities, because you're skipping serious climbs, not just mild inclines.
That said, the famous Tram 28 covers a lot of the same hilly, scenic routes for way cheaper (couple euros vs 20-25+ for a HOHO day ticket), but it gets absurdly crowded, especially in tourist season, expect standing room only and long waits at popular stops. Pickpocketing is also a known issue on that specific tram because it's so packed, worth being careful with bags/pockets.
When I'd say hop on hop off Lisbon is worth it:
First day in the city, want an overview before deciding where to spend real time. Bad knees/not into steep uphill walking. Traveling with people who have mobility issues, kids, etc. Want to cover both the historic center (Alfama, Baixa) and further-out spots (Belém) in one day without doing separate tram/bus/walk combos.
When I'd skip it and just walk/tram:
You're only doing the historic core (Alfama, Baixa, Chiado), which is walkable if you pace yourself and don't mind hills. Budget trip, tram + walking covers 90% of the highlights for a fraction of the cost. You enjoy getting lost in narrow streets, HOHO buses can't even fit down a lot of Alfama's tiny alleys, so you're missing the best parts of that neighborhood if you only do the bus.
Worth noting: Belém (Jerónimos Monastery, Belém Tower, the pastel de nata place) is far from the center and this is honestly where hop on hop off Lisbon makes the most sense, since walking there isn't realistic and it saves you figuring out the tram/bus combo yourself.
My honest take: do hop on hop off Lisbon for day 1 to get oriented and handle the Belém trip, then switch to walking + Tram 28 (or just walking, tbh) for day 2 once you know the city and want to actually wander Alfama properly instead of driving past it.
Anyone else do Lisbon HOHO? Curious if people found the routes actually covered the best viewpoints or if it felt like a waste in a city this walkable.