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The Best Hotels in Funchal, and Who Each One Is Wrong For

Funchal is built into a hillside, so a hotel ten minutes from the market on a map can be seventy metres above it. Every walk below was routed and every height measured.

Best all-round: Castanheiro Boutique Hotel

See availability in FunchalLive prices for your dates
By Emma9 min readPublished Prices checked July 2026
Table of contents
Funchal's seafront hotels lit up above the Atlantic at sunset, seen from the Lido viewpoint
Photo: Jules Verne Times Two · CC BY-SA 4.0

In Brief

Which hotel should I book in Funchal?

Castanheiro Boutique Hotel is the best all-round base: eleven minutes from the market, a rooftop pool, and only sixteen metres of climb. Hotel Madeira does most of the same job for a lot less. Ignore both if you want a resort with a sea view, because neither has one.

Key takeaways

  • Best all-round: Castanheiro Boutique Hotel, in the historic centre
  • Best value: Hotel Madeira, same area, one band cheaper
  • The old town is flat. Almost nothing else in Funchal is.

Which one fits how you travel

Find the row that sounds like your trip. Every pick below names the traveller it is wrong for, so you can book on fit rather than on rank.

If you areBookWhy
On a first visit, three or four nightsCastanheiro Boutique HotelCentral, flat enough, and a rooftop for the afternoon the weather turns.
Watching the budget but want to stay centralHotel MadeiraSame part of town, a rooftop pool, one band cheaper. Small rooms are the trade.
Travelling with childrenHotel Baía AzulPools and space in the Lido strip. Accept that town is a bus ride.
A couple wanting quiet without leaving townHotel Porto Santa MariaAdults-only, on the seafront, six flat minutes from the market.
Here for the hotel itselfReid's PalaceThe gardens and the setting are the point. Half an hour from the old town.
Arriving without a car and not planning to hire oneBarceló Funchal Old TownThree minutes to the market and flat. Its lack of parking stops mattering.
Driving, with luggageQuintinha São JoãoOff the cobbles, with a shuttle into town so the car can stay parked.
See availability for your dates in FunchalCompare every hotel below on one map · from 120 dollars a night on the dates checked
  • Free cancellation on most rooms
  • No booking fee
  • Prices on Trip.com
Flights to FunchalCompare airlines and dates

What the bands mean

Rates here are shown as bands rather than numbers. No Funchal hotel publishes a fixed nightly price - every one runs a live booking engine - so a figure quoted today would be wrong by the time you read it. The bands come from a live Trip.com check on 29 July 2026 for one night, two adults, across the whole city: eleven properties came back between 80 and 459 US dollars, with the middle of the range at 249.

€
under about 120 dollars a night on the dates checked
€€
roughly 120 to 200
€€€
roughly 200 to 320
€€€€
over 320

The 10 hotels, and who each one is wrong for

Walking times are to Mercado dos Lavradores. Walking times are real pedestrian routes to Mercado dos Lavradores, measured through OpenStreetMap foot routing at 4.5 km/h, not straight lines. The height figure is the hotel's elevation above the market, from the EU-DEM 25 m terrain model. Funchal's gradients are the reason both numbers are here: distance alone tells you almost nothing on this island.

  • The Avenida do Mar seafront in central Funchal, with the cathedral tower and the city rising behind it

    Zona Velha, by the market

    Barceló Funchal Old Town

    €€€

    The closest hotel to the market, with a rooftop pool and bar over the old town roofs.

    Walk to Mercado dos Lavradores
    3 minutes, 190 m, and 4 m downhill to Mercado dos Lavradores
    Right for
    Anyone who wants to step out of the door and already be in the old town.
    Wrong for
    Drivers. It has no car park of its own, and this is the hardest part of Funchal to park in.
    The catch
    You are sleeping in the busiest part of the old town. The restaurant terraces on Rua de Santa Maria run late and the sound goes up, not away.
    Check dates and prices for Barceló Funchal Old TownOpens the live rate for your dates
  • The Fortaleza de Sao Tiago on the seafront at the eastern end of Funchal's old town

    Zona Velha seafront

    Hotel Porto Santa Maria

    €€€
    Rated 4.6 out of 5 on Google Maps from 1,042 reviews, as of October 2026

    Adults-only, on the seafront at the eastern end of the promenade, with an outdoor and an indoor pool.

    Walk to Mercado dos Lavradores
    6 minutes, 410 m, and 10 m downhill to Mercado dos Lavradores
    Right for
    Couples who want the old town on the doorstep but not directly overhead.
    Wrong for
    Families. It does not take children, so this is a hard no rather than a preference.
    The catch
    Parking is private but charged, and the approach road down to it is narrow and one-way in places.
    Check dates and prices for Hotel Porto Santa MariaOpens the live rate for your dates
  • The Se Catedral do Funchal in the historic centre, the quarter where the central Funchal hotels sit

    Historic centre, by the Sé

    Castanheiro Boutique Hotel

    €€
    Rated 4.8 out of 5 on Google Maps from 1,196 reviews, as of October 2026
    Best all-round

    Five restored buildings knitted into one hotel in the historic centre, with a rooftop pool and jacuzzi and an indoor spa pool.

    Walk to Mercado dos Lavradores
    11 minutes, 810 m, and 16 m of climb to Mercado dos Lavradores
    Right for
    A first visit. It is central, it is genuinely quiet for how central it is, and the rooftop earns its keep on a wet afternoon.
    Wrong for
    Anyone booking Funchal for a sea view. You are two streets inland and the view is over rooftops.
    The catch
    The car park is private but charged, and the streets around it are the steep cobbled ones. A suitcase on that surface is a genuine nuisance.
    Check dates and prices for Castanheiro Boutique HotelOpens the live rate for your dates
  • The tree-lined Avenida Arriaga in central Funchal, with its mosaic pavement

    City centre, by the municipal garden

    Hotel Madeira

    €
    Rated 4.3 out of 5 on Google Maps from 624 reviews, as of October 2026
    Best value

    A small three-star in the centre with a rooftop pool and bar, near the municipal garden.

    Walk to Mercado dos Lavradores
    14 minutes, 1.0 km, and 10 m of climb to Mercado dos Lavradores
    Right for
    Anyone who wants a central base and a rooftop and would rather spend the difference on the island.
    Wrong for
    Anyone who needs space. The rooms are noticeably small, which is the trade for the price and the postcode.
    The catch
    Parking is charged and not on site. On a three-star budget that cost is a real share of the nightly rate.
    Check dates and prices for Hotel MadeiraOpens the live rate for your dates
  • Yachts moored in Funchal marina, the harbour front where the marina-side hotels stand

    Harbour front and marina

    Pestana CR7 Funchal

    €€
    Rated 4.4 out of 5 on Google Maps from 2,547 reviews, as of October 2026

    A four-star on the harbour front with a rooftop outdoor pool, sauna and jacuzzi.

    Walk to Mercado dos Lavradores
    18 minutes, 1.3 km, and 6 m downhill to Mercado dos Lavradores
    Right for
    Younger travellers and anyone who wants the marina and the harbour rather than the old lanes.
    Wrong for
    Anyone after a quiet, traditional Madeira. The whole property leans hard on one theme and does not pretend otherwise.
    The catch
    Parking is public and charged rather than the hotel's own, and the harbour front is exposed when the wind gets up.
    Check dates and prices for Pestana CR7 FunchalOpens the live rate for your dates
  • The Monte cable car climbing above Funchal, showing how steeply the hillside hotels sit above the bay

    São João hillside

    Quintinha São João

    €€€
    Rated 4.7 out of 5 on Google Maps from 561 reviews, as of October 2026

    A five-star with gardens and a spa on the hillside above the centre, with indoor and outdoor pools.

    Walk to Mercado dos Lavradores
    27 minutes down, 2.0 km, and 71 m of climb on the way back to Mercado dos Lavradores
    Right for
    Anyone who wants quiet and greenery and is happy to be driven into town.
    Wrong for
    Anyone planning to walk everywhere. The free shuttle exists precisely because the walk back does not work.
    The catch
    That 71 m is the whole story. Downhill into town is pleasant, uphill at the end of a long day is not, so you are on the shuttle or in a taxi.
    Check dates and prices for Quintinha São JoãoOpens the live rate for your dates
  • The lake and fountains in Parque de Santa Catarina, above Avenida do Infante in Funchal

    Avenida do Infante

    Savoy Palace

    €€€€
    Rated 4.7 out of 5 on Google Maps from 2,593 reviews, as of October 2026

    The big modern five-star on Avenida do Infante, with a rooftop and a spa over the bay.

    Walk to Mercado dos Lavradores
    28 minutes, 2.1 km, and 40 m of climb to Mercado dos Lavradores
    Right for
    Anyone who wants a full-service city resort with sea views and does not mind a walk into the old town.
    Wrong for
    Anyone who came for old Madeira. This is a glass-and-scale hotel, and the character is in the service, not the building.
    The catch
    It is a large hotel and it feels like one at breakfast. The seafront promenade walk into town is pleasant but it is not short.
    Check dates and prices for Savoy PalaceOpens the live rate for your dates
  • Funchal's western hotel strip along the Estrada Monumental, seen from the water

    Estrada Monumental clifftop

    Reid's Palace

    €€€€

    The 1891 clifftop hotel west of the centre, with terraced gardens, several pools and a Michelin-starred restaurant.

    Walk to Mercado dos Lavradores
    33 minutes, 2.5 km, and 30 m of climb to Mercado dos Lavradores
    Right for
    Anyone treating the hotel as the destination. The gardens and the afternoon tea are the reason to book it.
    Wrong for
    Anyone who wants to be in the middle of things. You are half an hour from the market and the hotel knows it.
    The catch
    Deliberately old-fashioned. That is the appeal for most guests here and an irritation for the rest, so read it as a warning as much as a selling point.
    Check dates and prices for Reid's PalaceOpens the live rate for your dates
  • The Lido promenade in Funchal, the palm-lined seafront walk along the western hotel strip

    Lido hotel strip

    Hotel Baía Azul

    €€
    Rated 4.6 out of 5 on Google Maps from 2,497 reviews, as of October 2026

    A renovated four-star out in the Lido hotel strip, resort-shaped with several pools.

    Walk to Mercado dos Lavradores
    56 minutes, 4.2 km, and 31 m of climb to Mercado dos Lavradores
    Right for
    Families and longer stays who want pools and space more than they want the old town.
    Wrong for
    A short first visit. You will spend the trip commuting to the part of Funchal you came to see.
    The catch
    Nearly an hour on foot to the market. In practice you are taking the bus or a taxi every time you go into town, and that adds up over a week.
    Check dates and prices for Hotel Baía AzulOpens the live rate for your dates
  • The Palheiro gardens in the hills above Funchal, often in cloud at 500 m above the town

    Palheiro hills, east of town

    Casa Velha do Palheiro

    €€€€
    Rated 4.7 out of 5 on Google Maps from 639 reviews, as of October 2026

    A converted hunting lodge in the hills east of Funchal, with a golf course, a spa and indoor and outdoor pools.

    Walk to Mercado dos Lavradores
    Not walkable: 5 km and 496 m above the market to Mercado dos Lavradores
    Right for
    Golfers and anyone who wants the mountains, the gardens and complete quiet.
    Wrong for
    Anyone without a car or a taxi budget. This is not a base for seeing Funchal.
    The catch
    That 496 m of elevation is the single most important number on this page. It puts you in a different climate band from the seafront, and it means every trip into town is a drive.
    Check dates and prices for Casa Velha do PalheiroOpens the live rate for your dates

Where not to book in Funchal

There is no unsafe part of central Funchal, so the thing to avoid is a gradient rather than a district. Anything above roughly the Rua do Castanheiro line puts a real climb between you and dinner, and the cobbled calçada surfaces are hard on wheeled luggage in a way photographs never show. The other trap is the Lido strip. It looks central on a map of the bay, but Baía Azul is a fifty-six minute walk from the market, so book it for the pools or not at all. And if you are staying above the town without a car, check the hotel actually runs a shuttle before you rely on one.

When to book

Funchal has two spikes rather than a summer season. New Year, when the bay fireworks fill the city and the seafront hotels sell out months ahead, and the Flower Festival in spring. Outside those, the island runs warm and even all year, which is why prices move less here than on the mainland and why booking six to eight weeks out is usually enough. If you want a rooftop-pool room in the old town specifically, go earlier: those hotels are small and there are not many of those rooms.

Best hotels in Funchal: FAQ

The questions travellers ask most when picking a hotel here.

The old town, unless you are here mainly for a pool. The distances decide it. Barceló Funchal Old Town is a three-minute walk from Mercado dos Lavradores and Castanheiro is eleven, while Hotel Baía Azul out in the Lido strip is fifty-six minutes on foot. The Lido has the bigger, more resort-shaped hotels and better value for space, so it works for families and long stays. For three or four nights you will spend too much of the trip travelling.

The seafront and the old town are, and almost nothing else is. Funchal is built up the side of an amphitheatre, so the useful measure is height rather than distance. The old town hotels sit within about 16 m of the market and are an easy walk. Quintinha São João is 71 m above it, which is why it runs a shuttle. Casa Velha do Palheiro is 496 m above it and is a drive, not a walk. Check the climb, not just the kilometres.

About 18 km, or roughly 19 minutes by road to the old town in normal traffic, on the fast VR1 along the coast. It is one of the shorter island airport transfers in Europe. Every hotel on this page is within a few minutes of that figure, so the transfer should not influence which one you pick.

Of the hotels here, Castanheiro Boutique Hotel, Barceló Funchal Old Town, Pestana CR7 and Hotel Madeira all have one. Castanheiro adds a jacuzzi on the roof and a separate indoor spa pool, which matters more than it sounds: Madeira gets real rain, and a rooftop-only hotel gives you nowhere to swim on a wet day.

Not for Funchal itself, and in the old town a car is closer to a liability. Barceló Funchal Old Town has no car park at all and most of the central hotels charge for parking that is not on site. You need a car for the rest of Madeira, so the common answer is to stay central without one and hire for the days you are leaving town.

New Year. The bay fireworks are the island's biggest event and the seafront hotels price and sell out accordingly, months in advance. The Flower Festival in spring is the second spike. Outside those two, Funchal's rates are unusually flat through the year because the weather is, which is why there is no cheap season here so much as a cheap week.

Plan the rest of the trip

Continue Planning Your Trip

Photo credits (10)

Photos via Wikimedia Commons, used under their respective licences.

  • The lake and fountains in Parque de Santa Catarina, above Avenida do Infante in Funchal: Palickap - CC BY 4.0 · source
  • The tree-lined Avenida Arriaga in central Funchal, with its mosaic pavement: Luis Miguel Bugallo Sánchez (Lmbuga) - CC BY-SA 4.0 · source
  • The Fortaleza de Sao Tiago on the seafront at the eastern end of Funchal's old town: Alberto-g-rovi - CC BY 3.0 · source
  • The Avenida do Mar seafront in central Funchal, with the cathedral tower and the city rising behind it: Michael Gaylard from Horsham, UK - CC BY 2.0 · source
  • The Se Catedral do Funchal in the historic centre, the quarter where the central Funchal hotels sit: Dr. Thomas Liptak - CC BY-SA 4.0 · source
  • Yachts moored in Funchal marina, the harbour front where the marina-side hotels stand: Stephen Colebourne - CC BY 2.0 · source
  • The Monte cable car climbing above Funchal, showing how steeply the hillside hotels sit above the bay: Vicky Sorsby - CC BY 2.0 · source
  • The Lido promenade in Funchal, the palm-lined seafront walk along the western hotel strip: Dr. Thomas Liptak - CC BY-SA 4.0 · source
  • Funchal's western hotel strip along the Estrada Monumental, seen from the water: Virgílio Gomes - CC BY-SA 4.0 · source
  • The Palheiro gardens in the hills above Funchal, often in cloud at 500 m above the town: Vix_B - CC BY 2.0 · source