Where to Stay in Funchal, Madeira (Neighbourhood & Accommodation Guide)

Last Updated March 10, 2026||

When you’re visiting Madeira, Funchal is a great spot to base yourself. Located on the southern, sunnier coast of the island (and close to the airport), it’s perfect if you’re looking for city life and within easy access to all the adventures we’re sure you’re excited to go on!

While there are a bunch of other great places to stay around the island, we’ve yet to find one that beats Funchal. We’ve visited the island 4 times, and something always draws us back to Madeira’s beautiful capital.

Steep coastal cliffs in Madeira rise above the calm Atlantic Ocean, with white buildings scattered along the rugged shoreline. A seabird flies low over the water as the dramatic headlands stretch into the distance under a blue sky.
The view from Funchal has to be one of the most beautiful city views in the world

After having spent over 6 months in Funchal, staying in various different accommodations, here are our best suggestions for your trip!

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Best areas and places to stay in Funchal

View from our free walking tour in Funchal, Madeira.
Old Town Funchal in the early spring with the Jacaranda Trees in bloom

Funchal is a stunning city right by the ocean, and while there aren’t any pristine white-sand beaches (you have to visit the neighbouring island, Porto Santo for that), Madeira’s capital has so much to offer!

The Old Town is full of stunning Portuguese-styled cobblestone streets (Calçada Portuguesa) with Jacaranda Trees, cute cafes and coffee shops, fruit & vegetable markets with delicious fruit you might’ve probably never heard of, wine cellars, natural pools, and so much more.

What to consider before booking your stay

We love walking down little random streets of Funchal because we always seem to be able to find somewhere new – but we might have to warn you, because some of the streets are very steep!

That’s one of the reasons why it’s important you pick a good area to stay in, because we’ve made the mistake of booking something that looked to be close to the centre just to realize it was a +20-minute walk uphill!

Another thing to know when booking your place is that some of the streets are quite narrow as well and it can be challenging to navigate with a car (and finding parking).

The good news is that we’ve already made these mistakes, so we’ll help you avoid making them, too!

A sloped residential street with parked cars descends toward the ocean in the distance. Red-tiled roofs and low buildings line the road under a partly cloudy sky overlooking the water.
A narrow Portuguese-style cobblestone street lined with traditional buildings leads toward a church tower with a bell and cross at the top. A pedestrian walks along the sidewalk beneath blue skies, with balconies and shuttered windows framing the historic street scene.
Some examples of steep and narrow streets in Funchal

Some things to consider when booking accommodation in Funchal:

  • Parking – not all places have parking included, and street parking can be challenging to find as well as costly depending on where you stay
  • Breakfast included – to save you time when you’re ready to explore (although if you need recommendations for the best cafes in Funchal, we’ve got you)
  • Air conditioning – a lot of places in Madeira don’t have A/C as the locals just open doors and windows for a natural flow. Personally, we don’t use much A/C in Madeira, but it can get hot during the summer months!

And if you’re visiting during peak season (June through September), we highly suggest booking your accommodation early to avoid the best places booking out.

This happened to a few of our friends when they flew to Madeira for our wedding, and planning is just less fun with a slimmer, more costly selection! Click here to see what’s still available during your visit.

Below, we’ll get into the different neighbourhoods and which ones we suggest staying in based on the kind of holiday you want. Funchal is quite big (100,000+ people – see area map below), so picking the right area is essential for making the most of your trip.

A map of Funchal, Madeira shows hotel price markers in euros scattered across the city and along the coastline. Prices range from around €336 to over €1,000, with landmarks such as Praia Formosa, Museu CR7, and Forte de São Tiago visible on the map.
Hotel map overview of Funchal

City Centre (Sé)

Photo of a restaurant in Funchal, Madeira.
A little local café close to Rua de Santa Maria and Mercado dos Lavradores

The city centre and Funchal Old Town is our personal favourite area to stay in and where we’ve spent the majority of our time in Madeira.

It’s full of character, cute little shops, close to the water, and there are plenty of private apartments available, which is exactly what we were looking for during our extended stays here as digital nomads in Madeira.

Beautiful mural art in downtown Funchal.
Photo of a mural on Rua de Santa Maria.
Rua de Santa Maria in Funchal’s Old Town is famous for its painted doors

You’ll find a good variety of accommodation here in the old town, with lots of boutique hotels as well as more luxurious places with rooftop pools and ocean views (NEXT is a great option for this).

A hand holds a glass of yellow cocktail with two striped paper straws against a backdrop of the ocean at sunset. A resort pool and palm trees are visible below from an elevated viewpoint.
A coastal hotel complex sits on a rocky cliff overlooking the ocean at sunset, with soft pink and orange clouds in the sky. Palm trees and a pool terrace are visible below, and the building displays the name “Royal Savoy.”
NEXT by Savoy Signature is a great spot if you love sunsets

Some of the best accommodation in Funchal Old Town:

  • NEXT by Savoy is great if you’re looking for a luxurious hotel with a rooftop pool and amazing ocean views. There’s also a bar on the rooftop, which is perfect for sunset drinks – and the sunsets here are amazing.
  • Three House is located in the perfect spot, located right next to Rua de Santa Maria, the famous fruit market, and the cable car up to Monte. While we’ve yet to stay here, we’ve been to their restaurant and rooftop more times than we can count – and based on the quality of their food, service, and incredible reviews, we know how good this place is. With free parking and an epic swimming pool, you can’t go wrong with this place!
  • Barceló Funchal Oldtown is located really close to the Marina and Funchal Cathedral, and is a great option if you don’t plan to rent a car. There’s a rooftop pool as well as a gym, and the place has amazing breakfast!

If you’re a digital nomad looking for more long-term accommodation, make sure to also check out Flat.io as they often have better prices if you’re staying for a month or longer.

Lido & Ponta da Cruz

The sun sets over the ocean, casting golden light across the water as a rocky cliff and hillside town appear in the distance. Warm orange and pink clouds fill the sky above the coastline.
Catching the sunset from Doca do Cavacas Restaurant in Ponta da Cruz (Funchal)

If you’re looking for an area with beautiful ocean views, the Lido & Ponta da Cruz area is a great option for you.

Both of these areas are located a few kms west of Old Town Funchal (although it’s pretty much all connected). We’re including them here together as they pretty much merge and, while the entire stretch is around 2km, it’s very easy to walk between the two.

This area is definitely the more touristy part of town, and it’s where you’ll find a lot of the bigger chain hotels with beautiful pools and ocean views. There’s also quite a few “swim complexes” here where you can swim in saltwater pools or get ocean access.

The Doca do Cavaxas Natural Pools right outside of Funchal.
Doca do Cavacas natural pool is in the Ponta da Cruz area

Funchal doesn’t have any sandy beaches, so to swim in the ocean, you sometimes need to go to a complex or natural pool to enter the water. One of our favourite natural pools in Madeira (Doca do Cavacas) is actually in the Ponta da Cruz area.

On the Eastern part of Lido, closer to Old Town Funchal, you’ll find the famous Reid’s Palace, which is famous for its high tea. It is one of the most luxurious 5-star hotels in Madeira, and it’s also one of the oldest hotels on the island, dating back to November 1891.

Another amazing hotel in this part of town is The Cliff Bay, which is perfect for a couple who want a romantic and relaxing getaway with easy access to Funchal and all the fun activities nearby.

Stone steps with wooden railings lead down through lush greenery toward a large hotel building under a clear blue sky. The hotel sign is visible on the upper facade above the surrounding trees.
A spa treatment room features two massage tables covered with white towels and folded blankets. Wooden cabinets, skincare products, and soft lighting create a calm, relaxing atmosphere.
A plate of sliced fresh fruit including kiwi, strawberries, pineapple, and passion fruit is arranged on a dark plate beside a glass of orange juice. A candle and table setting sit on a wooden table in a bright dining area.
Cliff Bay in Lido is great for a relaxing couple’s getaway

We went to Cliff Bay for a massage and spa experience after our wedding and it was amazing! The hotel is so beautiful with the garden and the ocean views – and while it’s still on the higher end, it costs a fraction of what Reid’s Palace costs.

Going to the Ponta da Cruz side (further west, away from old town), there’s an amazing place called Quinta Falesia Apartment, but you have to be lucky to get a booking here as the place books out fast (probably due to the excellent reviews), and you do have to stay for a minimum of 3 nights to book.

🅿️ All of these hotels have free parking included! 🚘

São Martinho

Just above Lido & Ponta da Cruz, you’ll find São Martinho, which is more of a local and expat area. This is another great area if you’re looking for a private apartment or a longer stay as a digital nomad (it’s close to Sangha Cowork).

We won’t go into too much detail about São Martinho, as we think Old Town Funchal or Lido and Ponta da Cruz will be better areas for you to stay during your time here.

That being said, if you’re curious to learn more about this area (or you’re staying as a “long term” digital nomad), these are some of our suggestions…

Monte

Stunning view overlooking Funchal city.
View of Funchal from the Levada do Bom Sucesso to Monte Hike

Up above Funchal, you’ll find Monte – a beautiful, green, quieter area near the capital, with easy access to the botanical gardens and the highway, making it perfect for day trips around the island.

Some of the best hotels in Monte:

  • If you’re looking for a relaxing stay close to nature and with beautiful views, Villa Monte is a great option. The villa is modern and clean, and the sun terrace is one of my favourite parts of this place. It’s perfect if you’re 2 couples travelling together!
  • Quinta do Monte is a charming, traditional-styled Portuguese hotel with a beautiful outdoor area right next to the Quinta do Monte Panoramic Gardens. If you wish to stay in Monte, this is probably the best location you can find!
  • Granny’s House is perfect if you want to stay in a real Portuguese-style house. The interior is traditional and warm with dark wood, and outside there’s a lovely balcony with city and ocean views – and as a bonus, you have a kitchen and a barbecue so you can cook your own food!
A hillside hotel with red-tiled roofs and green balconies is surrounded by lush tropical plants and tall trees under a bright blue sky. The ocean is visible in the distance beyond the landscaped gardens and terraces.
The beautiful view from Quinta do Monte (source)

Why stay in Monte?

Monte is often a bit cooler than Funchal because of the higher elevation, and it tends to be bit more rainy and moody too – but on a clear day, the views overlooking Funchal and the Atlantic Ocean are incredible!

While we’ve yet to stay in Monte, we’ve done lots of trips up to Monte to hike Levada dos Tornos, visit the botanical gardens, and take the cable car. It’s also in Monte you can try the world-famous toboggan experience (must-do!).

Monte is a great option if you want to stay near Funchal without being in the heart of the city, and enjoy a quieter area of the capital.

📍 Want to know about all the best spots in Madeira?
Then check out our Madeira Maps with +135 locations around the island that we have personally visited and love! 🗺️

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Final thoughts on where to stay in Funchal

A coastal view of Funchal, Madeira shows colourful buildings with red-tiled roofs stretching up the hillside behind a waterfront promenade. The calm ocean sits in the foreground, with palm trees and low-rise hotels and apartments lining the shore under cloudy skies.
Funchal Beach and Old Town on a cloudy day

There are a few more neighbourhoods in Funchal than we’ve mentioned in this guide (like São Pedro, Santa Maria Maior, Santa Lucia, and São Goncalo), but for a holiday in Madeira, the places we’ve listed in this post are by far the best options to make the most of your trip!

As we’ve already mentioned a few times, Old Town Funchal will always be our go-to spot, but if you prefer to be a bit further away from the city centre, Lido and Ponta da Cruz are also great options!

We hope this post helped you get a better feel for what Funchal is like and which places are good to stay at.

If you have any questions, you’re more than welcome to leave a comment on this post or reach out to us on Instagram @redwhiteadventures.

Have an amazing time and enjoy this beautiful island!

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A lush garden pathway leads down toward The Cliff Bay hotel in Funchal, surrounded by tropical plants and bright blue skies. Text overlay reads “Neighbourhood Guide: Where to Stay in Funchal”.
A narrow cobblestone street in Funchal’s Old Town features historic buildings and a church tower rising above the rooftops. Text overlay reads “Where to stay in Funchal, Madeira – Sé, Lido, or Monte?”
Sunset over the Atlantic Ocean beside the Royal Savoy hotel in Funchal, with pastel skies and palm trees lining the coastline. Text overlay reads “Where to Stay in Funchal + Best Neighbourhoods” with redwhiteadventures.com at the bottom.
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2 Comments

  1. Manajemen Pemasaran on April 9, 2026 at 7:27 am

    Are there more information regarding about this topic for us to research for?

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    • redwhiteadventures on April 18, 2026 at 8:22 am

      Yes! You can send us an email and we can help you 🙂
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