Funchal City Guide
Funchal Hotels: How to Choose by Area, Star and Tax
This is a guide to choosing among Funchal hotels, not a ranking of them. It names no property, because it holds no rate reading and no inspection of its own, and every Funchal hotels search should start from the decisions that actually shape a stay: which of the city's areas fits your plan, what star category buys you under Madeira's own classification law, and the flat municipal tourist tax that lands on every category the same way. It also covers the one free check that tells you whether a listing is legal before you pay a deposit. For the area-by-area comparison this page points to throughout, see where to stay in Funchal, and for the wider trip, start at the independent Funchal guide.
Quick answer Area first, then star, then the tax
Funchal hotels are best chosen by area first, since the old town, the city centre, the Lido seafront and the western beach end suit different trips, compared in full on where to stay in Funchal. Star classification runs on Portugal's national 1 to 5 scale, with no separate Madeira tier. The city's tourist tax is a flat $2.29 (€2.00) per person per night regardless of star category, capped at 7 nights.
Key takeaways
- Compare the five sleeping areas side by side on the where-to-stay areas table before you compare individual listings.
- Every legal listing must show a registration number, verify it free at rnt.turismodeportugal.pt, see the checks section.
- Travelling on a tighter budget, see cheap hotels in Funchal for the lower star bands and what they trade off.
- Once booked, the Funchal old town walking tour is a low-key way to start the first morning near most central hotels.
- For every other page of the Funchal trip guide, start from the home page and branch out to attractions, food and day trips.
Funchal Hotels by Star Category
Madeira classifies hotels on the same national 1 to 5 scale as the rest of Portugal, and the city's tourist tax does not vary by that scale the way it does in some other cities. The figures below come from Madeira's own classification law and Funchal's tourist tax FAQ.
| Category | Governing rule | Tourist tax per person per night | Cap |
|---|---|---|---|
| 5-star hotel | DLR 12/2009/M, national DL 39/2008 scale | $2.29 (€2.00) | $16.04 (€14.00) at 7 nights |
| 4-star hotel | Same national scale | $2.29 (€2.00) | $16.04 (€14.00) at 7 nights |
| 3-star hotel | Same national scale | $2.29 (€2.00) | $16.04 (€14.00) at 7 nights |
| 1-2 star hotel | Same national scale | $2.29 (€2.00) | $16.04 (€14.00) at 7 nights |
| Quintas da Madeira | Madeira-specific typology layered on the national scale | $2.29 (€2.00) | $16.04 (€14.00) at 7 nights |
Every row carries the same tax because Funchal's tourist tax does not band by star category, unlike some cities elsewhere in this network. The star only changes what the room offers, not what the city charges on top. Source: Funchal's Taxa Municipal Turistica FAQ and DLR 19/2017/M. Figures current for in Q3 2026.
Choose the Area Before the Star
Funchal's five visitor-relevant areas suit different kinds of stays, and the full comparison lives on a dedicated page rather than being repeated here.
The Estrada Monumental hotel strip, one of five areas compared on where to stay in Funchal.
Zona Velha, the old town, puts you by the cable car's lower station and the Mercado dos Lavradores, at the cost of being farthest from the beach strips. The Se and city centre anchor the civic core around Praca do Municipio. The Lido and Estrada Monumental run along the seafront promenade, the area that opened its first stretch in August 1993. Sao Martinho and Praia Formosa sit at the quieter western end, nearest the free pebble beach. Monte, the hill above the city, is a day trip, not a base to sleep in.
Each area's trade-offs, and the only officially published transport time between them (the Aerobus minutes from the airport, since no official walking-minute figure connects the areas to each other), are set out in full on the areas table on where to stay in Funchal. Read that table first, then use the star and tax detail on this page to narrow the search within your chosen area.
One Free Check Before You Book
Portugal runs a public register for every classified hotel, and it costs nothing to use.
Whatever the star category, the registration number is what to check, not the view.
Any hotel, aparthotel or Quintas da Madeira property can be verified for free at rnt.turismodeportugal.pt, using the Pesquisa_ET.aspx search, by name, address, type or municipality. If a listing you are considering does not turn up in that register, ask the host why before you pay anything. This is the same register that covers classified tourist enterprises across mainland Portugal, so it works the same way for a Funchal hotel as it would for a Lisbon one.
Star classification itself runs on the national 1-5 scale under Decreto Legislativo Regional 12/2009/M, which adapts the national Decreto-Lei 39/2008 to Madeira, as amended by DLR 19/2017/M. Madeira adds no separate regional scale. The only local addition is the Quintas da Madeira typology, layered on top of the standard categories for properties built around a pre-existing property of cultural or architectural value.
Sources: Turismo de Portugal, Pesquisa RNET, DLR 19/2017/M.
The Tax on Top, and How It Differs From Other Cities
Funchal's tourist tax is simpler than some cities' schemes because it does not vary by star category.
The tax is $2.29 (€2.00) per person per night, capped at 7 consecutive nights, for a maximum of $16.04 (€14.00) per uninterrupted stay. It has applied since 1 October 2024, and extends to cruise passengers since 1 January 2025. It applies to every paid overnight stay in a classified tourist enterprise or an Alojamento Local unit within the municipality, at any star category, regardless of which platform you booked through. Free stays are exempt.
This is Funchal's own rate specifically. Camara de Lobos, Santa Cruz and other Madeira municipalities run separate schemes, including Santa Cruz's own Ecotaxa, so a night just outside the city can be taxed differently. Full detail and the total-cost table by length of stay is on where to stay in Funchal.
Start the Morning Near Most Central Hotels
The old town walking tour and the city tuk-tuk tours both meet in or near the Zona Velha and city centre areas where most central hotels sit.
from $18.84
Funchal Old Town Walking Tour
A 2 hour small-group walk through Funchal's Old Town, the Jesuits' College, the Farmers' Market, a wine lodge and a historic sweet factory.
Check Availability
from $91.89
City Highlights Tuk-Tuk Tour
A 2 hour small-group tuk-tuk ride to 25 Funchal highlights including Pico dos Barcelos, the fortress, the Cathedral and the Farmers' Market, hotel pickup included.
Check Availability
from $29.86
City Sightseeing Hop-On Hop-Off Bus Tour
A 24 or 48 hour Funchal hop-on hop-off pass with a 14-language audio guide, a free Historic Centre walking tour and a wine tasting stop at Blandy's.
Check AvailabilityPrices, ratings and details are the platform's own. dollar figures are the listed prices — the platform bills in your account's currency.
Next Steps After Choosing an Area
Once the area and star category are settled, these pages carry the decision forward.
Where to Stay in Funchal
The full area-by-area breakdown behind this page, with the live room search by area.
Cheap Hotels in Funchal
Budget stays and the lower star bands, on cheap hotels in Funchal.
Funchal Apartments
Self-catering as an alternative to a hotel room, on Funchal apartments.
Funchal Hotels: Questions
Which area of Funchal is best for a hotel?
It depends on the trip. Zona Velha puts you nearest the cable car and the market, the Se and city centre anchor the civic core, the Lido and Estrada Monumental run the seafront promenade, and Sao Martinho and Praia Formosa sit at the quieter western end near the free beach. Compare all four in the areas table on where to stay.
How much tourist tax do Funchal hotels charge?
A flat $2.29 (€2.00) per person per night, capped at 7 consecutive nights for a maximum of $16.04 (€14.00). Unlike some cities, Funchal's tax does not vary by star category. See the tax section.
Does a 5-star hotel in Funchal cost more in tax than a 3-star one?
No. The tax is the same $2.29 (€2.00) per person per night at every star category and at Alojamento Local units too. Only the room rate changes with the star, not the tax. See the star comparison table.
How do I check a Funchal hotel is legally registered?
Search it for free at rnt.turismodeportugal.pt using the Pesquisa_ET.aspx tool, by name, address, type or municipality. If it does not appear, ask the host why before paying a deposit. See checks before you book.
Is Monte a good place to stay?
Not really, as a base. Monte sits about 550 metres above the city and functions as a day trip reached by cable car, not a sleeping area with its own hotel cluster comparable to the four listed on where to stay.
Where should I stay for the beach in Funchal?
Sao Martinho and Praia Formosa, at the western end of the promenade, sit nearest the free pebble beach. Full detail on that and the other areas is on where to stay in Funchal.
Staying in Funchal, on Film
Three videos on the areas and hotel choices this page is about.
Where to stay in Madeira | Best Places to Book your Hotel
An overview of Madeira's hotel areas, the same trade-off covered in the areas section above.
Video: Picture the WorldWhere to Stay in Madeira: Explore Scenic Views and Charming Hotels + Map
A map-based look at Madeira's lodging areas, set against Funchal's own five areas.
Video: MissTouristBest Hotels in Funchal Madeira
A tour of hotel options across Funchal's neighbourhoods.
Video: Canuck Girl TravelsVideos load from YouTube only when you press play.
Prices, hours and terms are set by the venue or operator and confirmed at checkout.
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