Best Areas to Stay in Funchal, Madeira – Based on Your Travel Preferences
The moment I stepped off the plane at Madeira Airport, with my suitcase packed full of hiking gear and bikinis (you’ll need to pack both when you travel to Madeira!), I was greeted by the eternal summer weather of the island of Madeira.
Like it? Pin it!
Save this pin to help you plan to ultimate island getaway to Madeira, with Funchal – the capital city – as your home base!
Where to Stay in Funchal: Quick Tips
Where to Stay
– BEST BUDGET: Hostel Santa Maria
– BEST MID-RANGE: Hotel Cajú
– Best LUXURY: Cliff Bay Resort
When to Visit?
There’s no bad time to visit Madeira due to the island’s subtropical, consistent weather all year round! May – August tends to be the busiest time in Madeira due to European summer travel, so I recommend visiting in Madeira’s shoulder seasons in April and October.
One glance past the airport’s dramatic perch and I was staring at the mesmerizing sapphire waters of the Atlantic Ocean.
Had I just stepped into paradise? It sure seemed like it.
Located off the Northwest coast of Africa, situated remotely in the North Atlantic Ocean, Madeira is a Portuguese island that closely resembles heaven…the place where vibrant green hillsides and jagged peaks meet the dramatic blue waves of the shimmering sea.
Whether you prefer to seek respite at a mountain escape, or want to soak up the sun to the sound of crashing waves, Madeira has it all – dramatic peaks and soothing seas.
I spent five days exploring Madeira island paradise – discovering incredible things to do in Funchal, and beyond – and I’m already planning my next big adventure to “the Hawaii of Europe” (or should we call Hawaii “the Madeira of the US”?). This extensive guide will help you plan an unforgettable trip to Madeira island, with Funchal, the island’s capital, as your home base.
Funchal, the capital of paradise, is a beautiful hillside town dappled with bright orange roofs and vibrant green trees. I recommend using Funchal as your home base for adventure – much of the island is accessible via car or through guided day tours. This Madeira travel guide will cover the best areas to stay in Funchal and provide my top recommendations for accommodations in Madeira for every budget!
Why Choose Funchal as a Home Base in Madeira?
Perfect Weather, No Matter the Season
Madeira’s subtropical climate makes it an enjoyable place to visit during any time of the year. I visited Madeira during late August and found the weather to be mild and cool. If you plan to visit the more mountainous regions of the island, you’ll experience an entirely different climate so bring pants and a warm jacket!
Capital City Meets Beautiful Nature
No matter where you are on the island, nature finds a way to weave itself into the framework of the cities and towns! Funchal is a beautiful city that climbs up the mountainside like vines on a weathered brick building – the perfect mix of peaceful nature and bustling city life.
Easy Access to Other Parts of the Island
Even without renting a car, I found a convenient way to explore many picturesque towns around the island. By booking guided day trips to other parts of Madeira, I was able to traverse the unique landscapes all around the island. I even made it up to the top of Madeira’s tallest peak, Pico Ruivo, without the need to rent a car! Funchal’s central location and many transportation options makes it a great place for travelers looking for a home base for island exploration!
Amazing Food and Wine Scene
The local food and wine scene in Madeira draws travelers from all over the world. Funchal is a great place to experience the local culture and indulge in traditional dishes, try distinctive Madeira wines, and enjoy local drinks (like Poncha!). If you’re a wine connoisseur, the island even has its own wine festival, the Madeira Wine Festival, occurring at the end of August through mid-September.
A Walkable City
My favorite part about Funchal was the fact that I could walk everywhere! Old Town Funchal’s central location makes it a perfect place for travelers to explore the city on foot!
Access to Local Markets and Festivals
If there’s one local experience you must-do in Funchal, let it be a stroll at Mercado dos Lavradores, a local farmer’s market offering fresh exotic fruit and unique souvenirs. Funchal is home to many of the island’s cultural events and festivals making it the perfect place for travelers who want to immerse themselves in the island’s culture and history.
Direct Flights to Europe
To escape the hustle and bustle of European cities, fly directly to Madeira for a choose-your-own-adventure trip on the island! Avid hikers will enjoy the mountainous regions of the island, beach-goers will enjoy the relaxing, coastal side of the island, and history nerds will love Funchal’s Old Town. I flew directly to Madeira from Lisbon.
Funchal Map (Downloadable!)
Download my personalized map of Funchal to discover the best areas to stay in Funchal with recommendations for where to stay in the capital city!
Best Areas to Stay in Funchal
The beauty of Madeira island is that no matter what type of traveler you are, whether adventurous and daring or laid-back and leisurely, there’s a place to call home for every type of traveler during the duration of your Madeira itinerary!
Sé/Funchal Old Town (Zona Velha)
Ideal For: History lovers, budget travelers, foodies, nightlife
Vibes: Historic, Walkable
Funchal Old Town (purple on my downloadable map of Funchal!), also known as Zona Velha, is the historic district in Madeira’s capital city. Blending narrow historic cobblestone alleyways with open squares and modern restaurants, Funchal Old Town is the best place to stay in Madeira for first-time visitors. History is woven into every facade and wall art is not uncommon in the historic city center – the street art makes for a great scavenger hunt!
At the heart of Funchal Old Town is one of the oldest surviving buildings, Corpo Santo Chapel. From this historic chapel, near one of the oldest streets in Funchal (Santa Maria Street) the city transforms from historic timelessness to modern beauty. I really enjoyed a guided tour of Funchal Old Town to learn about the unique history of this port city.
For part of my stay on Madeira island, I stayed at Hotel Cajú, a boutique four-star hotel in Funchal Old Town. This is one of my favorite hotels in all of Funchal!
Pros and Cons of Staying in Funchal Old Town
Pros
- Central Location
- Near lots of sites and activities (Mercado Dos Lavradores, Monte Cable Car, Funchal Port)
- Close to lots of local restaurants, walkable
Cons
- Many hotels don’t have direct beach access
- Can be busy (touristy)
- Higher accommodation prices in Old Town – more competitive
Best Hotels in Funchal Old Town
Budget
Hostel Santa Maria
Hostel Santa Maria is a great budget-friendly hostel in Madeira with access to the city’s major sites and attractions. This hostel also features a restaurant (by the same name) serving delectable Portuguese dishes for an affordable price!
Mid-Range
Hotel Cajú
I absolutely loved my stay at Hotel Cajú. Its central location and elegant stone decor makes Hotel Cajú feel like a luxury hotel for a mid-range price!
Luxury
Barceló Funchal Old Town
If you’re looking for a five-star hotel in Funchal Old Town featuring modern, elegant rooms with incredible views of the North Atlantic Ocean, look no further than Barceló Funchal Old Town!
São Martinho/Lido Area
Ideal For: Beach lovers, resort stays
Vibes: Oceanfront, modern
São Martinho is the resort side of Funchal (blue on my downloadable map of Funchal!). Featuring cliffside views of the mesmerizing North Atlantic Ocean, a variety of luxury resorts for all types of travelers (family-friendly, adults only, villas, and MORE!), and close access to Funchal Old Town, São Martinho is the place to go for travelers expecting an island escape.
I decided to splurge on a luxury stay for a few nights during my time in Madeira and I’m glad I booked my relaxing retreat at Cliff Bay Resort! Directly on the cliffs of Sāo Martinho, Cliff Bay Resort offers guests an incredible view of the ocean, a luxury spa experience, and direct access to the sapphire waters of the North Atlantic ocean (you can even rent snorkeling gear!).
Pros and Cons of Staying in São Martinho/Lido
Pros
- Peace and tranquility – farther from busy areas of Funchal
- Cliffside views of the Atlantic Ocean
- Great for families looking for a resort stay in Madeira
- Romantic getaway for couples
Cons
- Requires transport to and from Funchal Old Town
- More expensive area of Funchal (hotels and restaurants may be more expensive)
Best Hotels in São Martinho/Lido
Mid-Range
Pestana Grand
Offering lux travelers incredible views of the Atlantic Ocean, Pestana Grand is a five-star hotel in Madeira perfect for travelers hoping to enjoy a relaxing resort stay. This hotel has several restaurants, a saltwater pool, and a luxury spa!
Mid-Range
Pestana Vila Lido Madeira
Located directly on the cliffs of Sāo Martinho offering guests dramatic seaside views, Pestana Vila Lido is a beautiful luxury accommodation in Madeira. This five-star hotel in Madeira has direct access to the ocean!
Luxury
Cliff Bay Resort
This five-star hotel in Madeira is one of the most beautiful luxury properties in Funchal. Featuring direct beach access, a luxury spa, and a Michelin star restaurant, the Cliff Bay Resort is the best luxury hotel in Funchal.
Santa Maria Maior/East Funchal
Ideal For: A local experience, quieter part of Funchal
Vibes: Residential, less touristy
Santa Maria Maior, the East side of Funchal, is a quieter, more residential part of town (pink on my downloadable map of Funchal). Large families or groups will enjoy the limitless apartment and vacation rental options in East Funchal!
This side of the capital city is quieter, away from the touristy parts of town, and more local, giving travelers an authentic local experience. From Santa Maria Maior, Old Town Funchal can be accessed via taxi or bus.
Pros and Cons of Staying in East Funchal
Pros
- Less touristy
- Easier to find accommodations for large groups/families
- More local experience
Cons
- Farther away from Funchal Old Town – requires transport into historic city center
- Farther away from many activities
Best Hotels in East Funchal
Budget
On Track Hostel
On Track Hostel is a clean and comfortable accommodation for travelers hoping to spend less money on hotels in Madeira. With single beds priced under 40 euros (dorm-style accommodation), this hostel is a great option for budget travelers!
Mid-Range
Palheiro Village
Formerly a 19th century hunting lodge, the Palheiro Village is a beautiful hilltop luxury accommodation with breathtaking views of Funchal and the Atlantic Ocean. This fully-furnished luxury vacation rental is great for families or large groups.
Luxury
The Bay House
Offering guests panoramic views of the Atlantic Ocean, The Bay House is a private luxury vacation rental in Madeira that sleeps up to four guests!
Monte – A Town Above Funchal
Ideal For: Scenic views, nature lovers
Vibes: Hilltop retreat
High above the historic Funchal Old Town is a beautiful hillside town offering scenic, panoramic views of Funchal and the North Atlantic Ocean. Monte, a cable-car journey up the hillside, is a beautiful town above the city of Funchal (green on my downloadable map of Funchal). Home to the Monte Palace Tropical Gardens, a must-visit place in Madeira, Monte is the place for travelers who love scenic views!
Pros and Cons of Staying in
Pros
- Beautiful hillside town above Funchal
- Cooler climate (in the clouds!)
- Incredible views of Funchal (scenic)
Cons
- Far away from Old Town
- May require a car or multiple journeys via cable-car
- Less options for accommodations
Best Hotels in Monte, Madeira
Budget
A Casa do Caseiro
A Casa do Caseiro is a charming guesthouse high above the city of Funchal. This affordable guesthouse offers travelers clean rooms and close access to the Monte Palace Tropical Gardens.
Luxury
Quinta Mirabela
A luxury boutique hotel in Madeira high above the city of Funchal, Quinta Mirabela is a great luxury stay for travelers who love scenic views and charming luxury!
Luxury and Boutique Hotel Options in Funchal
Madeira island, though small, has lots of boutique and luxury hotel options! My favorite boutique hotel in Funchal is Hotel Cajú. This moderately priced hotel in the heart of Funchal is walking distance from Mercado dos Lavradores and other Funchal activities. My favorite luxury resort is Cliff Bay. I truly felt like royalty at this cliffside palace and I love the pool with ocean access!
The beautiful Cliff Bay Hotel, my favorite luxury hotel in Funchal.
Sparkling, clear blue waters at the Cliff Bay Hotel in Funchal.
A beautiful view of the Cliff Bay lawn from our suite balcony!
This and a freaking piňa colada.
All roads lead to Madeira!
A dip in the pool, a trip to the spa, endless days in Funchal!
Book the Ultimate Getaway at the Cliff Bay Resort in Funchal, Madeira!
You’ll thank me later 😉!
Where to Stay in Funchal for Different Travel Styles
Best Area for Couples in Funchal
For couples looking for a lavish romantic stay, the best area in Funchal is Sāo Martinho, which features stunning cliff formations and beautiful views of the Atlantic Ocean. There are a variety of adults-only luxury options in Sāo Martinho!
Best Area for Families in Funchal
Depending on your family’s travel style, I recommend choosing between Funchal Old Town and Sāo Martinho. Old Town is great for active families hoping to explore a variety of activities in Funchal. Sāo Martinho is a great place for families looking for a variety of hotel amenities like a nice pool, ocean access and kids’ activities.
Best Area for Solo/Budget Travelers in Funchal
Solo and budget travelers will really enjoy staying in Funchal Old Town or East Funchal. The best budget accommodations in Funchal, Santa Maria Hostel and On Track Hostel, are great home bases for adventurous, but budget-conscious travelers hoping to explore Madeira!
When is the Best Time to Visit Madeira?
May through September is considered peak season in Madeira, however, the island’s subtropical climate creates comfortable, warm weather all year round! In the higher elevation regions, temperatures are significantly cooler and weather patterns are oftentimes unpredictable! If you plan on visiting the mountainous regions of Madeira for hiking or other adventure activities, keep an eye on local weather channels and be prepared for unexpected showers!
One of Madeira’s most fascinating features is its diverse microclimates—thanks to the island’s unique topography, each region can offer a different weather experience on the very same day. Along with your summer attire – shorts, bathing suits, flip flops, etc – I recommend bringing a raincoat and hiking gear (pants, shoes, hiking poles if necessary) if you plan to venture around the mountainous regions of the island! Always be prepared for a change in plans! Weather in Madeira can change very quickly!
How Long Should I Spend in Madeira?
I recommend spending five or MORE days visiting Madeira! There are so many incredible small towns, each with their own history and culture across the island of Madeira. Five days is enough to get a general overview of Funchal and other large towns, but I recommend spending five to ten days exploring the island!
Tips for Booking Accommodations in Funchal
Book Early
If you plan on visiting Madeira during peak season, from May to September, I highly recommend booking your hotel and activities at least two months in advance. Peak and off-season in Madeira are still very enjoyable due to the island’s warm, subtropical climate all year round! My best resource for booking hotels in Madeira is Booking.com! Reserve your hotel in advance so you can get the best deal at the best hotel in Madeira!
Consider Renting a Car (But Check For Parking!)
Though renting a car is not absolutely necessary, many travelers choose to rent a car to travel around the island at their own pace.
Madeira Travel Tip!
If you plan on renting a car, consider the regions you’ll be visiting. If you plan on spending a lot of time hiking or driving along off-roads, consider renting a car that can handle terrain. Otherwise, I recommend renting a small sedan to travel around the island! There are lots of narrow roads on the island of Madeira and a small sedan is the best way to avoid driving accidents or scary situations!
Check for Balcony or View
There’s nothing quite like enjoying ocean views from your hotel room balcony or window! Check with your hotel before reserving your room to get the best views of the North Atlantic Ocean.
Choose the Right Location in Funchal
There are many different locations in Funchal suitable for any type of traveler! If you prefer exploring the historic side of the city, choose a hotel in Funchal Old Town near Santa Maria Street, the oldest street in Funchal. If you want an affordable, off-the-beaten-path accommodation in the residential side of the city, choose a rental in East Funchal.
For families or couples looking for a resort-style getaway, Sāo Martinho is the best place for family friendly getaways or cliffside luxury. Your travel style will determine the best location in Funchal for you!
Enjoy your time in Funchal! I hope this guide helps you find the right accommodation in Funchal for your travel style and budget!
Want to explore even MORE Madeira content?
Check out my latest Madeira blog Posts BELOW ⬇️
15+ Incredible Things to Do in Funchal, Madeira
Madeira Hiking Guide: PR1 Pico do Arieiro to Pico Ruivo Hike
