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Where to stay in Funchal – The best Funchal hotels

As the capital of the island of Madeira, with plenty of bars, restaurants, cafes and activities to keep you entertained, Funchal is the most popular place to stay on the island. Madeira is small, so you can easily drive to all four corners and explore to your heart’s content when using Funchal as a base. The town of Porto Moniz is less than a 1 hour drive, and that’s one of the furthest points from the city!

If you’re searching where to stay in Funchal and want inspiration on well-located areas and the best hotels, continue reading our accommodation guide. After staying in Funchal many times and checking out many of the hotels on offer, we’ve assembled a list of options that we recommend. We’ve included some of the best Funchal hotels for every budget, from budget friendly to grand luxury. All hotels on the list are also rated 4.5+ on Tripadvisor.

Continue reading for an insight on where to stay in Funchal.

The best areas to stay in Funchal

Lido / Praia Formosa Beach

A long promenade stretching south-west of Funchal Old Town, Lido is the main resort area. If you want a traditional holiday resort with a large pool, plenty of amenities and space to relax, this is where you’ll find it. As a contrast to this, Funchal Old Town and the older areas of the city are much more densely populated, with smaller hotel options.

Aptly named for its lido swimming pools and rock pools along the coastline, Lido is a great place to go for an evening or morning stroll. The series of promenades stretch from Funchal, all the way to Praia Formosa beach. Whilst the Lido area itself doesn’t have a beach, there are areas to swim. Praia Formosa (Formosa Beach) is a short walk away too.

If you’re looking where to stay in Funchal and want lots of hotel, restaurant and bar options, without the crowds of the city centre, check out the Lido area.

Funchal City Centre

Funchal City Centre is the place to stay if you want to immerse yourself in the heart of the island life. A busy mix of locals and tourists, Funchal’s centre has an old façade with narrow streets, grand buildings and lots of sightseeing opportunities. It feels much more crowded than the ‘Lido’ resort area, but that’s the beauty of it. A stay here feels much like any other European city break.

Hotels in Funchal Old Town tend to be smaller and of the ‘boutique’ variety. Half board, all-inclusive, spas and swimming pools are less common. It also has a number of apartment options on the mountain-side that are great for those on a budget, plus some excellent hostels for solo travellers.

Choose to stay in the centre of the old town to for everything on your doorstep. Alternatively, stay near the waterfront for scenic views of the sea and the many cruise ships arriving and departing. For a quieter experience of Funchal City Centre, opt for an apartment or hotel on the steep mountainside. You’re only a short walk from town and can wake up to stunning views every morning.

The best Funchal Hotels


All of the hotels below are located in the ‘Lido’ promenade area of Funchal.

The Cliff Bay Hotel (Luxury)

View on | Tripadvisor rating 5/5

If you’re looking for the very best Funchal hotel and don’t mind paying for it, look no further than the Cliff Bay. It really is a tropical paradise of a hotel, with its own lush tropical gardens, endless sea views, direct access to the sea and luxurious facilities. A firm highlight of this hotel are the dining options, most of which have intimate terrace settings that overlook the sea.

Other hotel facilities include a spa, gym, multiple heated swimming pools, tennis courts, relaxation areas and excellent service. The reviews at this hotel speak for themselves! We personally recommend The Cliff Bay Hotel for special occasions or for couples that want a relaxing, luxury getaway with lots of hotel time. The Cliff Bay is in the Lido area, but is only a 20-minute walk into Funchal Old Town. You get the best of both!

Hotel Alto Lido (Moderately priced)

View on | Tripadvisor rating 4.5/5

Hotel Alto Lido is a gem of a hotel that’s located along the main road that runs through the Lido area. Recently renovated, it has a modern design and is split into tower and lower buildings, with many rooms featuring a sea-view. Top facilities here include a rooftop terrace with plenty of sun loungers and an infinity pool. It also has a large, heated indoor spa pool, with separate steam room and treatment rooms.

The hotel suits both those that want a half board hotel with evening entertainment for a traditional holiday experience. On the other hand, a bed and breakfast stay here is equally as fulfilling. The nearby area has plenty of restaurant options. We found the crowd at Hotel Alto Lido to be mainly English and German guests in the older age group. However, it really has something for everyone. Prices are very reasonable for the vast amount of facilities on offer.

The Residence at Porto Mare (Luxury)

View on | Tripadvisor rating 5/5

Those searching where to stay in Funchal that want a place that feels like home, ideal for longer stays, The Residence at Porto Mare is a top option. Part of the Porto Mare hotel complex, this section of the resort has a luxurious collection of large apartments and studios. Unlike the neighbouring hotel, the added benefit of The Residence is the larger room spaces and cooking facilities. They’re perfect for longer stays where you don’t want to eat out every night.

The Residence boasts multiple indoor and outdoor swimming pools, with heated options for the cooler months of the year. It also features a spa, four restaurants, bars, and a large garden area with panoramic views of the sea. Life here, and at the Porto Mare resort in general, feels like its own world away from busy Funchal. It’s well located enough for sightseeing, but far away enough to feel like a luxury retreat.

Golden Residence Hotel (Moderately priced)

View on | Tripadvisor rating 4.5/5

Situated at the far end of the Lido promenade area, near Formosa Beach, Golden Residence Hotel is a great value place to stay. Being slightly out of the main tourist centre, it has a lower price point, but with the same great facilities of other 4-star hotels. We personally like the hotel’s location; it feels less touristic and more of an area where the locals and expats hang out. It’s within close proximity to a nice beach, the many shops of Forum Madeira shopping centre and some excellent restaurants. The only downside is the distance from Funchal Old Town. You’ll need to catch a bus or taxi to get there.

Room options at the Golden Residence include standard hotel rooms, but also large apartments with cooking facilities. They all feel very large compared to standard European room options. Facilities are not in short supply either. It has an outdoor terrace with a swimming pool and view of the sea, an indoor spa pool and jacuzzi, gym, sauna and a bar and restaurant.

Hotel Baia Azul (Budget friendly)

View on | Tripadvisor rating 4.5/5

Hotel Baia Azul outshines many of best Funchal hotels on our list for being great value for money. 4-star rated and with all the facilities you’d expect for that rating; swimming pools, a spa, gym, sea views and multiple room options, it’s ideal for an affordable 7-day getaway. Its location on the side of the Lido cliffside is situated well for access to the long promenade, but also for bus services around the island. It’s close to many restaurant options, and the popular Forum Madeira shopping centre.

Many rooms at Baia Azul have a sea view. They’re compact but modern, with easy access to the hotel’s common areas. We personally loved the large terrace area on the upper level of the hotel. It’s a quiet place to relax on a sun lounger as you look out at sea. The Baia Azul is a large hotel so you’ll often find a well-priced room no matter the month you travel.

Funchal City Centre

All of the hotels below are located in and around Funchal Old Town.

Pestana CR7 Hotel (Luxury)

View on | Tripadvisor rating 4.5/5

Did you know that there’s a Cristiano Ronaldo themed hotel in Funchal? You do now! Pestana CR7 Hotel is a joint partnership between the hotel brand and world-famous footballer, completely themed on Ronaldo and football. It’s somewhat of an attraction in itself, featuring a Cristiano Ronaldo museum, a statue of the superstar and lots of memorabilia. It’s located directly opposite the Funchal cruise terminal.

The CR7 Hotel isn’t just a gimmick. Look at the reviews and you’ll find out that it’s a fully functioning boutique luxury hotel. It boasts a rooftop swimming pool and lounge area, multiple bars, a restaurant and detailed theming throughout. If you’re searching where to stay in Funchal and want something completely unique, check out this hotel. Everything from the rooms to the toilets is themed on Ronaldo. Its aim is trendy and edgy rather than tacky; but that’s for you to decide. 😊

Porto Santa Maria Hotel (Luxury)

View on | Tripadvisor rating 4.5/5

Porto Santa Maria Hotel is a paradise in a city of hustle and bustle. Located right on the Funchal promenade next to São Tiago Fortress and a 2-minute walk from the famous cable car to Monte, it’s one of the best Funchal hotels for exploration. It has the benefit of being right in the city, but also boasts beautiful sea views, spacious relaxation areas and a gorgeous swimming pool.

Everything about Porto Santa Maria feels like a luxury boutique hotel experience. From champagne breakfast on the balcony to indulging at the spa and enjoying a classy evening out at the bar and restaurant, you’ll leave the hotel and will instantly want to return. The facilities and location of the Porto Santa Maria Hotel demand a higher than average price tag. However, it really is one of the best places to stay in Funchal. It’s worth splashing out if you want an amazing hotel.

Hotel Madeira (Moderately priced)

View on | Tripadvisor rating 4.5/5

Nestled behind the backstreets of Funchal Old Town, Hotel Madeira is a bright and welcoming hotel with a selection of suites and standard rooms. Its rooftop swimming pool has some fantastic views of the rows of terracotta houses in Funchal. Its rooms are cheery and colourful. Facilities wise, Hotel Madeira has an intimately small breakfast room, terrace and rooftop relaxation areas and a bar that’s perfect for a pre-dinner drink.

We recommend this hotel for those that want to be located in the heart of Funchal old town, a short walk away from the many sites, cafes, bars and restaurants. It feels much like a city break hotel, but with the added benefit of having a pool and relaxation areas. You’re only ever a short walk from your hotel room when out and about in Funchal.

Travellers Pearl by Storytellers (Budget friendly)

View on | Tripadvisor rating 4.5/5

When looking for a centrally located, budget-friendly accommodation in Funchal but you want a hotel room over a hostel, Travellers Pearl by Storytellers is the place to stay. Themed top to bottom with a ‘travellers of the world’ theme, it’s a unique apart-hotel very close to the centre of Funchal. Apartments have large world map murals behind the bed and are decorated with a modern but simplistic design.

With a low cost per night compared to other nearby accommodation and a variety of apartment options where you can cook your own meals, Travellers Pearl is one of the best Funchal hotels for the budget traveller. It doesn’t have the facilities of some of the hotels on our list. However, it has a lot of character and is a good base for any long weekend visit to Madeira.

Rent an apartment

For those that prefer to rent an apartment whilst on holiday, there are some great options on and Airbnb. Apartments lack the many facilities of a hotel. However, you get more space, prices can be more affordable and you can cook some of your own meals to save money. We personally opt for the apartment option for holidays of 2 weeks or more. Eating out every evening for a long period can be expensive! You’ll find Funchal apartment options in all of the areas we’ve mentioned above, ranging from large villas view private pools and a view, to budget studios in the middle of Funchal.

Compare options to find accommodation that suits you best. Remember to check reviews! This is just as important for apartments as it is for hotels.

Our top tips for finding a place to stay in Funchal

  • First decide whether you want a self-catering, bed and breakfast, half board or all-inclusive holiday. Your hotel choices will automatically narrow down depending on the option you choose. For instance, Funchal City Centre doesn’t have many half board and all-inclusive options. Lido does.
  • Location is everything! If you don’t want to walk some distance to get to a restaurant or the main attractions, avoid choosing a hotel on the mountainside in Funchal, or at the very far end of Lido promenade by Formosa Beach. The steep terrain in Funchal can be a tough challenge on an evening after you’ve spent your day sightseeing.
  • Is a good swimming pool important to you? If travelling in the cooler autumn and winter months of the year, most outdoor pools are cold. Choose a hotel with a heated outdoor or indoor pool if you like to swim.
  • Compare package holidays versus flight and accommodation separately bookings to find the best prices. Check out our guide here for tips on how to find the cheapest accommodation for your chosen dates.
  • Some hotels offer free breakfast as part of the price; others don’t. Keep this in mind. Sometimes it’s worth paying a little bit more for a hotel with a good breakfast option.
  • Do you want to cook some of your own meals to save money or avoid eating out all the time? Choose a hotel with studios, apartments and cooking facilities. Alternatively, an apartment might be better suited.
  • Do you value evening entertainment at your hotel? The larger hotel chains in the Lido area will be best for you. Larger complexes (Porto Mare, Melia, Pestana) have more shows on evenings compared to smaller, boutique hotels.
  • Madeira is a year-round warm destination, so although prices can be high in peak periods (summer, Easter, between Christmas and New Year), costs are similar throughout the year.

Thanks for reading our complete guide on where to stay in Funchal. Now we’ve shared some of the best Funchal hotels, all that’s left to do is find your favourite and book! We’re sure you’ll have a great time no matter where you choose to base yourself. Keep in mind whether you want a relaxing holiday in the sun or an active holiday with lots of sightseeing. Your perfect hotel will then be easy to spot. If you have any questions about the hotels we’ve featured, be sure to leave a comment below. 😊



Author bio:

An adventurer at heart that loves anything outdoors. Beaches, mountains and amazing scenery is everything I love about travel! I also enjoy home comforts and need a nice place to relax and re-charge after every trip.

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