Planning a trip to Funchal, Madeira and looking for the perfect place to stay? My accommodation guide will help you choose the best Funchal hotel or other lodging for your needs.
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Last updated April 2026
Funchal, the charming capital city of Madeira, is known for its stunning landscapes and gardens, beautiful old town and vibrant culture. It’s also the best place to stay if you intend to take group tours around the island as most leave from Funchal. Likewise, public transport to other parts of the island is easier from Funchal.
Funchal offers a mix of accommodation styles, from clifftop hotels with ocean views to boutique stays in the old town and modern apartments across the city.
Where you stay will affect how much walking or transport you need each day, especially with Funchal’s hills, so it’s worth choosing a base that fits how you plan to explore.
On my first trip to Funchal, I recall being somewhat surprised at how hilly it is. If I’d thought about it/researched more, I would have been prepared for the fact that once you get away from the waterfront and old town centre of Funchal, the city extends up the slopes.
For visiting the main sights, I found it more convenient to be in the historical centre than where we stayed the first time, which was a long walk or a bus ride away from where we actually wanted to spend our time.
In this article, I’ll guide you through the best hotels and apartments in Funchal so that you can pick the right location and lodging for your needs.
If you’re comparing different parts of the island, see my full guide on where to stay in Madeira for a broader overview.
My Top Picks For The Best Places To Stay In Funchal
Best 5-star hotel: Quintinha Sao Joao Hotel & Spa – peaceful gardens and a relaxing base just outside the centre
Best 4-star hotel: Castanheiro Boutique Hotel – central location with rooftop pool and views
Best apartment: Apartments Vista Oceano – with sea views and private pool
Not sure how to structure your stay in Funchal or Madeira?
If you’re still figuring out where to base yourself, how long to stay, or how to fit everything into a realistic plan, that’s completely normal at this stage.
Some people already have a rough itinerary that doesn’t quite work. Others are still deciding how to split their time across the island.
That’s usually what we focus on first — making sure your route, timing and logistics actually make sense, so you can start booking with more confidence.
👉 Find out more about my Portugal Trip Planning Consultation
Which area should you choose?
Funchal is small enough to get around, but where you stay can still change how your days feel.
Old Town (Zona Velha) – Best if you want restaurants, traditional architecture, atmosphere, walkable sights and easy access to tours, but expect some noise and uneven streets.
Lido area – More modern and flatter, with larger hotels, pools and lots of restaurants and shops. It’s less characterful but easier for a relaxed stay, especially if you like resort-style hotels or have kids, and there are frequent buses to the old town.
Hillside areas – Quieter with better views, often with beautiful lush gardens and more space, but you’ll rely more on taxis, buses or hotel shuttles.
👉 Compare car rental options in Madeira
5-star hotels in Funchal
Spacious, elegant rooms set within peaceful gardens, with indoor and outdoor pools and a well-equipped spa. It’s just outside the centre but there’s a free shuttle into town.
I’d choose this if you want somewhere calm to come back to at the end of the day without being too far from Funchal. Check availability and prices
Reid’s Palace
A classic luxury hotel overlooking the Atlantic with multiple pools, a spa and a Michelin-starred restaurant, plus traditional rooms with period features.
This works well if you’re after a more refined, old-school experience and plan to spend time enjoying the hotel itself. Check availability and prices
A historic manor house set in extensive gardens above Funchal, with access to a golf course, spa and both indoor and outdoor pools.
I’d go for this if you don’t mind being outside the city in exchange for space, views and a quieter setting. Check availability and prices
4-star hotels, Funchal
A well-designed boutique hotel in the old town with a rooftop pool, hot tub and views across the city and sea. Rooms are modern and comfortable, and everything is within walking distance.
You’d pick this if location matters and you want somewhere central but still relatively quiet. Check availability and prices
ARTS IN Hotel Conde Carvalhal
Suites in a restored mansion plus modern studios, set slightly uphill with wide views over the city, mountains and ocean. There’s also a garden and parking onsite.
This works if you’re happy with a bit of a climb in return for more space and better views. Check availability and prices
A larger, modern hotel near the Lido with multiple pools, restaurants and sea views, recently renovated to a good standard.
I’d recommend this if you prefer a resort-style stay with everything onsite rather than being in the old town. Check availability and prices
3-Star Funchal hotel
A centrally located hotel with a rooftop pool and outdoor spaces, recently renovated with more modern interiors and spacious rooms.
This works well if you want a central base with a few extra facilities, without paying for a higher-end boutique hotel. Check availability and prices
Apartments in Funchal
ASPA – São Paulo Studios
Modern, bright studios in the historic centre with well-equipped kitchenettes and a shared terrace. Everything is set up for an easy, comfortable stay.
I’d go for this if you want flexibility to self-cater occasionally while staying central. Check availability and prices
Central – São Pedro Boutique
Stylish, newly furnished studios and apartments close to the municipal park, with comfortable beds and responsive hosts.
This works well if you want a central base that feels modern and straightforward. Check availability and prices
Spacious studios with balconies and sea views, plus access to a shared pool and garden, set in the hills above the centre.
You’d choose this if you don’t mind using transport or tackling the hill in exchange for views and outdoor space. Check availability and prices
None of these take your fancy? Search Booking.com for hotels in Funchal
FAQs
Is Funchal the best place to stay in Madeira?
Funchal is the most convenient base if you want restaurants, tours and transport connections. However, other parts of the island may suit you better if you prefer quieter surroundings or plan to explore mainly by car. See this Madeira accommodation guide to help you choose the most suitabel base for your trip.
Do I need a car if I stay in Funchal?
Not necessarily. Funchal is the easiest place to stay without a car, especially if you plan to use tours or public transport.
Old town or Lido – which is better?
Old town is better for atmosphere and walkability. The Lido is more modern and easier if you want larger hotels, pools and flatter streets.
Are apartments a good option in Funchal?
Yes, especially for longer stays or if you want more space and the option to self-cater. Just check how hilly the location is before booking.
