Best Hotels in Funchal 2026: Our Top Recommendations

As soon as we landed in Funchal and drove our rental through the city, we were stunned. We knew what Madeira would look like from photos, but seeing it with our own eyes hit differently.

Funchal is this incredible mix of tropical greenery and dramatic mountains — houses stacked along cliffs, winding roads that reveal a new view every few seconds, and then the coast suddenly dropping into the Atlantic with waves crashing straight against the rocks. The energy here is something else — it’s hard to beat. Exploring the city was one of the best things to do in Madeira.

Even though the city itself is compact, hotels spread out along the coastline and the surrounding hills, and we quickly realised choosing the right base can shape your whole trip. For us, staying in the right place meant slow mornings, balcony sunsets, wandering to dinner without planning, and always feeling close to the sea.

We tried a few spots, and one thing became clear fast: a great hotel in Funchal isn’t about star ratings — it’s about views, comfort, and feeling connected to the coastline.

Where to stay in Funchal: Our experience

On this trip we stayed in a few different places, starting on the northwest coast in Porto Moniz. It’s calm, rugged, and perfect for exploring that corner of the island. We felt like the pace was exactly what we needed after landing on our first trip with Ema who was 3 months old at the time.

After a few nights there, we moved to Funchal, which instantly felt like the most comfortable base for the rest of our trip. It’s central, everything is close, and you’ve got easy access to tours, car rentals, cafés, bars, and dinners without planning ahead.

If you’re stull unsure about the best base for your holiday, read our detailed guide about Where to stay in Madeira.

In Funchal, we wanted a hotel that wasn’t just a place to crash, but somewhere we’d genuinely enjoy spending time in. Porto Mare gave us that feeling right away: tropical gardens, multiple pools, and balconies with ocean views. Afternoons by the pool were a highlight, and we loved the themed dinners at hotel’s restaurant!

After that, we switched to Enotel Magnólia for a change of pace. It’s smaller and quieter, with a more personal feel — still comfortable, just less of the resort atmosphere. It suited us when we wanted something simple and calm while staying close enough to walk into town.

Both places worked for us in different ways, and that helped us figure out what matters most when picking a base here.

Here are the best hotels in Funchal we’d happily book again — each for slightly different reasons.

Best hotels in Funchal

This list brings together our favorite places to stay around Funchal — spots we’ve either stayed in ourselves or would happily book after exploring this place from end to end.

We’ve done the hard research so you can easily decide which of the best hotels fit your needs and preferences.

Hotel Porto Mare 4*

Porto Mare quickly became one of those places where we didn’t feel the need to rush anywhere. The tropical gardens, ocean views, and multiple pools make it easy to settle in, and we loved being able to walk straight onto the promenade for sunsets or grab dinner nearby without planning. 

But what surprised us the most were the themed buffet dinners — loads of choice, great quality, and each evening felt a little different, so we never got bored. Rooms are bright, spacious and comfortable, breakfast is solid, and the whole place feels relaxed.

We’d book this again in a heartbeat.

⭐️ Best for: relaxed stays with sea views, great food, and resort comfort with great value
👉 Check availability and current prices →

Savoy Palace 5*

Savoy Palace feels like the kind of place you come to when you want your hotel to be part of the trip, not just your base. The rooftop pool is the star — panoramic ocean views, expertly made cocktails, and those unforgettable sunset moments that make you glad you splurged.

We stayed nearby and noticed the hotel from our balcony. Its exterior already looks breathtaking. We couldn’t resist going in. Once we stepped inside, everything felt polished and spacious without losing warmth. It definitely was one of the grandest hotels we’ve been to.

The rooms are beautifully designed, and the spa and outdoor pool set in a tropical garden make it easy to treat yourself on slower afternoons. We still talk about the unique atmosphere here.

Meals here feel elevated too — from stylish breakfast to drinks by the water — so you never feel like you’re “just at a hotel.” The location makes it easy to reach the promenade or city centre on foot, so you’re perfectly placed for both relaxation and exploration.

If we were choosing a hotel for a special trip to Madeira, this is where we’d stay.

⭐️ Best for: travellers who want a memorable, full-service luxury stay with outstanding views and elevated experiences
👉 Check availability and current prices →

Pestana Vila Lido Madeira Ocean Hotel 5*

Pestana Vila Lido strikes a great balance between luxury and comfort, especially if you want ocean access without the full price tag of the most premium stays. Every room comes with a balcony and many offer uninterrupted ocean views, so your first and last moments of the day are framed by the Atlantic.

The outdoor pool sits right by the water and is one of the hotel’s highlights with sunbeds overlooking the ocean. What really impressed us are the direct steps down into the Atlantic, a rare touch in Funchal.

There are multiple dining options and bars on site, including a restaurant with sea views and a pool bar for sunset drinks. And we always appreciate when a hotel has extras like a sauna, steam room, and massage facilities for slower days.

⭐️ Best for: travellers who want true oceanfront luxury with excellent facilities, sea access, and standout views
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Castanheiro Boutique Hotel 4*

Castanheiro Boutique Hotel is spread across restored historic buildings. We chose it for its warm, character-filled atmosphere without feeling old-fashioned. The rooftop pool with panoramic city and ocean views is a highlight — perfect for sunrise swims or winding down after exploring.

Rooms feel refined and comfortable, with designer details. The small spa with indoor pool, sauna, and treatments adds that extra layer of relaxation you don’t always get in city hotels.

⭐️ Best for: travellers who want a stylish, central stay with rooftop views and boutique comfort
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Three House Hotel 4*

Three House isn’t a typical resort — it’s a small collection of stylish apartments that give you extra space and privacy while still feeling like a hotel. It’s a great base if you like spreading out a bit, cooking breakfast in your own kitchenette, or if you’re travelling with kids and want room to breathe. 

The rooftop pool and bar are the highlight with panoramic views over Funchal, comfy loungers, and a laid-back vibe that makes it hard to leave. Rooms come with kitchenettes, which is super handy for easy meals on slower days. The central location means you can walk to cafés, the market, and the waterfront in minutes.

It feels stylish without trying too hard — just enough design to feel special, without losing that home-away-from-home comfort.

⭐️ Best for: travellers who want apartment-style stays with hotel comfort and a rooftop pool in a central location
👉 Check availability and current prices →

Reid’s Palace, A Belmond Hotel 5*

Reid’s Palace is Madeira’s most iconic and exceptional hotel, and it truly feels like stepping into a piece of history with plenty of comfort and warmth. The clifftop location gives you sweeping Atlantic views from almost everywhere.

What I love the most about it is the heated sea-water pool built directly into the rocks, which is something you won’t find anywhere else in Funchal.

Afternoons here are made for tea on the terrace overlooking the ocean, slow swims, and relaxed walks through the subtropical gardens that surround the hotel. The whole place has that timeless atmosphere that makes a stay feel memorable long after you leave.

This is our dream stay and the hotel we recommend for a once-in-a-lifetime experience.

⭐️ Best for: travellers who want a historic, clifftop luxury stay with world-class service
👉 Check availability and current prices →

Enotel Magnólia 4*

We stayed at Enotel Magnólia after Porto Mare because we wanted something simpler and quieter while still being close to the centre — and it worked really well for that. It doesn’t have the big resort feel, but that’s exactly why we liked it: it’s calm, personal, and easy to settle into. 

We could walk to dinners without thinking twice, grab coffee on the way to the waterfront, and come back to a peaceful pool area surrounded by greenery with lovely views over Funchal — the perfect place to unwind at the end of the day.

Rooms are clean and practical with comfortable beds, but they did feel a bit small. The hotel has an incredible rooftop with stunning views, unfortunately it’s not used for anything which is a pity. But this stay gave us everything we needed without unnecessary extras for a very reasonable price.

⭐️ Best for: travellers who want a quieter, good-value stay with an easy walk to the centre
👉 Check availability and current prices →

Final thoughts on best hotels in Funchal

After staying in Funchal and trying different styles of accommodation, we realised how much the hotel shapes the pace of your trip here. Slow mornings with ocean views, easy walks to dinner, and a pool to come back to at the end of the day—those things added more to our stay than we expected.

The hotels we’ve listed are places we’d genuinely book again, either for the facilities, the views, or simply because they made our days comfortable and relaxed.

If you’re still deciding, start with what you want your days to feel like: relaxed resort comfort, a central boutique stay, apartment-style flexibility, or a quieter base with good value. From there, choosing gets easier.

Wherever you end up, Funchal rewards slowing down—and the right hotel makes that effortless.