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There are many amazing regions in Madeira but the main hub is Funchal. In this article, I’ve handpicked some of the best hotels in Funchal and the best overall places to stay in Funchal with recommendations for the top luxury hotels, value picks, and some budget hostels in the center of the action.

If you are visiting Madeira for the first time, I suggest you base in Funchal, which is the capital of Madeira Island. It is an excellent destination for first-time visitors, families, and budget travelers. It’s where the action is. You’ll find everything you need in the capital such as where to eat, shop, sleep, and more. I based in Funchal for several months and there is so much to experience when it comes to culture, food, and history. The small city has an artsy vibe, is widely known for its botanical gardens, Gothic-style churches, harbor, and wine cellars whereas the other regions are simply picturesque without many restaurants or bars. It’s also a great place to base geographically as it is close to many of the top hikes and attractions on the island.

If you plan to stay in Funchal, you might get away with not hiring a car as there are plenty of tour agencies to choose from departing from Funchal, which saves you some money for your adventures. As far as Funchal accommodation options are concerned, worry no more because you’ll find plenty of choices. That is why I’ve put together a list of the best places for you to stay in Funchal based on luxury, family choice, and budget.

Here is a comparison table of my personal recommendations on the best places to stay in Funchal.


Belmond Reid’s Palace9.5- Exceptional$354
The Cliff Bay- PortoBay9.4- Superb$183
The Vine Hotel9.0- Superb$185
Savoy Palace9.4- Superb$168
Quinta da Casa Branca9.6- Exceptional$170
Golden Residence Hotel8.8- Fabulous$79
Pestana Carlton Madeira Ocean Resort Hotel8.6- Fabulous$106
Castanheiro Boutique Hotel9.4- Superb$128
Hotel Alto Lido9.1- Superb$96
Quinta Da Penha De Franca8.7- Fabulous$73
Hotel Baia Azul9.1- Superb$88
Allegro Madeira- Adults Only8.9- Fabulous$92
TURIM Santa Maria Hotel9.0- Superb$83
Museum House9.4- Superb$48
Santa Maria Hostel9.2- Superb$50


Belmond Reid’s Palace (Luxury): This historic five-star hotel is set atop a cliff with insane Atlantic Ocean views. Built-in 1891, this luxury haven is well-known because of its timeless elegance, century-old gardens, and beauty that even Winston Churchill had stayed here before. It offers classic and refined rooms with modern amenities yet keeping the hotel’s traditional interior design and charm. Amenities comprise outdoor swimming pools, four restaurants with one Michelin star, bar, spa, and wellness center, tennis court, and more. There is complimentary breakfast, parking, and Wi-Fi. What’s unique about this hotel is the elevator that takes guests down to sea level where they can find a pool built on the rock. Belmond Reid’s Palace is renowned for its world-class service, insane views, traditional English afternoon tea, and sumptuous cuisines. Undoubtedly, the best luxury hotel in Funchal and probably the top place to stay in Madeira.

Click here to check the best current rates and availability of Belmond Reid’s Palace.

The Cliff Bay- PortoBay (Luxury): The Cliff Bay- PortoBay is a ritzy hotel set on a cliff in Funchal, offering a stunning 360-degree view and direct access to the sea. This five-star hotel has achingly stylish rooms and suites, all fitted with complete amenities such as large comfy beds, seating area, air conditioning,  and more. The property houses two Michelin-starred restaurant serving Mediterranean and Iberian cuisines, not to mention the bar, spa with 8 rooms for treatments, Turkish steam bath, jacuzzi, sauna, modern fitness center, and three swimming pools. If you are a tea lover, the hotel has one of the best English afternoon teas serving home-made scones and mini-sandwiches. Whether you’re looking out the peninsula suite or just swimming in the hotel infinity pool, this stunning hotel offers abundant opportunities for photographic moments. The Cliff Bay draws mostly couples and families that are looking to disconnect from the bustling noise of the metropolis yet still stay in a Funchal hotel with a good location.

Click Here to check the best current rates and availability of The Cliff Bay- PortoBay.

The Vine Hotel (Luxury): If you are looking for a luxury place to celebrate your honeymoon or anniversary, The Vine Hotel is your perfect pick. Yes, the hotel design was inspired by the richness of a full-blooded wine just like what the island is famous for— WINE. This inexpensive yet ultra-chic luxury hotel is super modern and has some amazing spa facilities. The hotel has plenty of rooms and suite options but if you want a room with an extra-large double bed and a fancy bathtub, you might want to book the Design Panoramic Suite. Overall, all rooms are beautifully designed, extensive, and some may even have floor-to-ceiling windows that allow for stunning views and provide plenty of opportunities to take pictures for your Instagram. When it comes to food, the hotel has a fusion restaurant and bar that serve exquisite food and drinks. Couples can book a table by the pool for romantic private dining. For a romantic getaway with your loved one, I highly recommend this 5-star hotel in Funchal!

Click here to check the best current rates and availability of The Vine Hotel.

Savoy Palace (Luxury): Savoy Palace is a huge, top-notch hotel precisely close to the ‘Old Town’ and just walking distance from the heart of Funchal. This five-star hotel features 309 rooms and 43 suites making it the perfect place to have your dream grand holiday. Each room and suite is bright and airy with phenomenal views of the Atlantic Ocean. This luxurious property has a myriad of facilities and amenities such as a stunning huge outdoor pool and generous breakfast. I love how the room takes advantage of its beautiful view. The restaurants have a wide selection of food with vegan and kid-friendly dishes. Here at Savoy Palace, you will have the best dining experience in your life not to mention it comes with scenic views. Savoy Palace is beautifully designed, chic, and stunning throughout. This is by far one of the most charming luxury hotels in Funchal and a great choice for a Funchal hotel close to the old town. 

Click here to check the best current rates and availability of Savoy Palace.

Quinta da Casa Branca (Luxury): Quinta da Casa Branca is a one-of-a-kind luxury boutique hotel in Funchal and probably a history buff’s ideal place. It is not trendy and chic but once you stay here, there may be no reason to leave. It offers a huge, beautiful garden and rooms like no other with so much history. You will sleep like a king or queen in the manor house suite. Yes, each manor house comes with a marble bathroom fitted with a bath, balcony with a garden view, coffee/tea making facilities, free Wi-Fi, classic-style decor, and a huge bed with an adjoining seating area. What can you ask for? Other room types include garden rooms, premium rooms, and deluxe suites. The place is tranquil and the grounds are so pretty. There are two heated swimming pools, wellness facilities, two restaurants, a bar, and complimentary parking on-site. The breakfast on the terrace is quite amazing and the staff is fantastic. If you want a peaceful atmosphere and luxury place to stay while in Funchal, I cannot recommend this luxury hotel enough!

Click here to check the best current rates and availability of Quinta da Casa Branca.

Golden Residence Hotel(Excellent Location): Golden Residence Hotel is one of Funchal’s best family-friendly hotels. Make yourself at home in one of the 172 individually decorated rooms and self-catering apartments, featuring flat-screen televisions, minibars, and private balconies. The location is perfect for sunset watching and sweeping sea views. Each apartment has a living room and a fully-equipped small kitchen. The hotel is not only family-friendly but also ideal for business travelers. It has meeting rooms, swimming pools, a modern gym, sauna, meditation room, and restaurant. What I love about this hotel is the proximity to the black beach and the terrific view of the ocean. For the view, best room rates, and amenities, I certainly recommend this hotel as it definitely ticks the family-friendly box.

Click Here to check the best current rates and availability of Golden Residence Hotel.

Pestana Carlton Madeira Ocean Resort Hotel (Family): If you’re the kind of family who wants five-star luxury, kid-friendly services, and pet-friendly accommodation, Pestana Carlton Madeira Ocean Resort Hotel is your perfect choice. Set on a cliff, this appealing hotel offers magnificent views of the garden, mountain, sea, pool, and Funchal Bay. It offers a wide range of air-conditioned rooms and suites with stylish decor, balconies, Wi-Fi, LCD TV, and more. The hotel features four restaurants, two bars, a tennis court, a diving school, two outdoor swimming pools, a hairdresser, a library, and plenty of sunbeds by the pool area. Whether your kids want to do water sports, swim, or read books in the library, surely they will have a great time! There is also a pool bar at the sea level that serves cold drinks and ice cream.

Click here to check the best current rates and availability of Pestana Carlton Madeira Ocean Resort Hotel.

Castanheiro Boutique Hotel (Family): If you enjoy staying in a place with a bit of character, then you’ll love this beautiful, quirky hotel in Funchal. Castanheiro Boutique Hotel is ideal if you need both quality family time and relaxation. With its stunning views from the rooftop, excellent location, various activities for kids, you might not want to leave. The best feature of this hotel is the rooftop pool and bar overlooking the city of Funchal. The rooms are equipped with a TV with cable channels, a private bathroom, free toiletries, and some rooms have a hot tub and a fully-furnished balcony. The service is excellent and if you want to rent a bike or a car, the hotel staff can definitely help you out. The attention to detail and the kid-friendly touches is outstanding. The fact that it is in a prime location, you can’t fault Castanheiro Boutique Hotel.

Click here to check the best current rates and availability of Castanheiro Boutique Hotel.

Hotel Alto Lido (Family/ Location): Chic, modern, and sleek. Hotel Alto Lido is one of the newest hotels in the Lido area in Funchal. This newly-renovated 4-star hotel offers 315 minimalist-style and well-appointed rooms with modern decor and furniture. Each room has a fridge, a flat-screen cable TV, a private bathroom with shower and hairdryer, air conditioning, telephone, safety deposit box, and free WiFi. The studios have a fully equipped kitchenette which is pretty handy. The hotel also has three restaurants offering a buffet, a la carte, and light meals. What’s more? There are three swimming pools—-indoor, outdoor heated pool as well as children’s pool. You can enjoy live music and fancy drinks from the 360 Bar plus you can indulge in a relaxing sauna and a traditional Turkish bath. If you are traveling with kids and want to be close to everything such as a beach, book a room at Hotel Alto Lido.

Click here to check the best current rates and availability of Hotel Alto Lido.

Quinta Da Penha De Franca (Family): This 4-star boutique hotel is fabulously rated and a very popular accommodation in Funchal. Set in front of a rocky private beach, the property boasts two outdoor saltwater swimming pools and a stunning garden. The 109 rooms are fitted with balconies showcasing the best sea and garden views. Each room is well-appointed, cozy, and spacious making it perfect for families. Room amenities include a mini-bar, telephone, safe, TV, seating area, air conditioning, and more. I love the character and the attention to detail not to mention the rate is reasonable. This colonial-style hotel is also in a convenient location which means close to the town and some various restaurants. There are a bar and restaurant on-site and guests can play billiards, too. I cannot recommend Quinta Da Penha De Franca enough!

Click here to check the best current rates and availability of Quinta Da Penha De Franca.

Museum House (Excellent Location): If you’re on a tight budget yet you want easy access to everything including public transport, then stay in Museum House. This amazing guest house is centrally located which means it is also close to the shops, restaurants, and pubs. Museum House offers six well-equipped and minimalist rooms come with coffee/tea making facilities, Wi-Fi, flat-screen TV, a seating area, and a private bathroom with a hairdryer. This is also a perfect accommodation for families who seek budget rooms in a quiet street. The host is very welcoming and always at your disposal. Surprisingly, the standard is high considering the price so it’s great value for money. I highly recommend this guest house in the heart of Funchal.

Click here to check the best current rates and availability of Museum House.

Santa Maria Hostel (Budget): Santa Maria Hostel is used to be a primary school and now became a popular cheap accommodation in the heart of Funchal’s ancient town yet close to the sea and the city. This vibrant, boutique hostel offers high-ceiling dormitory rooms (mixed and female) which come with lockers, chairs, and shared bathrooms. Plus, there are also double rooms, triple rooms, embroidery suites, and Madeira Wine suites to choose from. Each suite is fitted with a vintage tub, king-size bed, and private bathroom with a garden view or sea view. The best thing about this hostel is that breakfast is included in your stay. And if you feel like cooking your own meal, there is a clean, fully-equipped kitchen painted with aqua tone. The restaurant serves a wide range of fresh dishes especially seafood not to mention there is a pretty mural by the dining area. You can’t fault at Santa Maria Hostel.

Click here to check the best current rates and availability of Santa Maria Hostel.

Hotel Baia Azul (Budget): Modern, clean, and comfortable are among the things you’ll love about Hotel Baia Azul. Not to mention this newly refurbished 4-star hotel boasts a wide range of rooms including budget double or twin rooms for $88 a night. I recommend you book a room facing the sea as it offers panoramic views. Apart from the indoor heated pool, there is also a huge, outdoor swimming pool with sea views, pretty grounds, and plenty of sitting areas to chill and relax, three restaurants (Ocean, Atlantic, and Sal), a spa, a state-of-the-art fitness center, a sauna, steam bath, and massage services. Room service is available as well as private parking. And the breakfast is really good. For the price, amenities, and views, Hotel Baia Azul can’t be beaten.

Click here to check the best current rates and availability of Hotel Baia Azul.

TURIM Santa Maria Hotel (Budget): This is one of the popular budget-friendly accommodation in Funchal. Some of TURIM Santa Maria Hotel’s 92 rooms are inexpensive and have floor-to-ceiling windows offering the best view of the city. Each room has air conditioning, flat-screen TV, a kettle, comfy chairs, a minibar, and more. The hotel is also within walking distance to museums, a tennis court, and other attractions in Funchal. Regarding the amenities, you will find an amazing swimming pool and bar on the rooftop, chic shared lounge, and restaurant. The rooftop bar is probably the highlight as it offers panoramic views of the city and the sea. When it comes to dining, the buffet has a lot of choices which is awesome. Guests can take advantage of the car rental services, room services, airport transfer, and the 24-hour front desk. With its great location, rooms with a view, excellent food, it’s quite reasonable for the price. At TURIM Santa Maria Hotel, you’ll more than what you paid for. 

Click here to check the best current rates and availability of TURIM Santa Maria Hotel.

Allegro Madeira- Adults Only (Budget): This is by far the most popular budget hotel on Madeira Island. Allegro Madeira Adults Only is a newly-renovated hotel showcasing a wide range of swanky, adult-only rooms from double rooms to suites and all are fitted with complete amenities and balconies offering panoramic views of the Atlantic Ocean. The suites come with a lovely living room. The hotel is very close to everything including the seafront promenade, park, shops, and restaurants. The best feature of this hotel is undoubtedly the rooftop bar where guests can chill with cocktails in hand while enjoying amazing views. The property has also two restaurants, an outdoor swimming pool, spa, and fitness center. This 4-star hotel is also great value for money. With stunning views, excellent service, and immaculately clean rooms, I highly recommend this hotel! 

Click here to check the best current rates and availability of Allegro Madeira- Adults Only.

I hope you enjoyed this guide about the top hotels in Funchal and it helped you decide on where to stay in Funchal based on your preference. Have a good stay on Madeira Island!


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