Best hostels in Madeira

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Travellers on a budget in Funchal soon find the city has few hostels: two were listed in a sample search for two adults, two nights from 10 to 12 October 2026. The best hostels in Madeira's capital come down to one, the Santa Maria Hostel on the main street of the old town, 8.4 from 933 reviews, for about €193 for the two nights.

The real budget choice is the guest houses: 17 guest houses, bed and breakfasts and inns score 7.0 or more, with a median of 8.4 and a median price of about €217. Prices move with the dates.

The hostel and the guest houses

The common mistake is to look only for hostels. In Funchal, the guest houses are the budget stays.

The Santa Maria Hostel, at number 145 on Rua de Santa Maria, a 2-minute walk from the Almirante Reis beach, has family rooms with private bathrooms, a shared kitchen, a lounge, a terrace and a tour desk. The other hostel in the sample, Hostel Monaco on Rua das Hortas, has a shared kitchen and rooms with private bathrooms, and scores 6.7 from 505.

For cheap hotels in Funchal Madeira visitors can walk everywhere from, the guest houses are the better value. São Francisco Accommodation, a renovated building of 6 floors with a lift, 5 minutes from the harbour, scores 9.0 from 1,032 reviews for about €217. Rochinha Cozy Home, in Santa Maria, scores 9.1 from 195 for about €202, and Museum House, on Rua das Pretas in São Pedro, 8.2 from 798 for about €200.

Valhalla Panorama, in Santa Luzia, scores 8.4 from 1,378 reviews for about €237, and A Casa do Caseiro, on the Caminho do Monte, 8.6 from 719 for about €228. The lowest price of any place above the floor, about €142, was for a flat with a rooftop terrace in São Pedro.

Funchal's hostels cluster in the old town, close to the market and the cable car.

The cheapest hotels

Visitors often assume a budget stay means far from the sea. Several of the cheapest hotels are on the Lido.

A cheap hotel Funchal visitors can book on the Lido is the Hotel Escola, a four-star in São Martinho and the lowest-priced hotel in the October sample, at about €228 for the two nights, 7.9 from 991 reviews. The Hotel Windsor, a four-star in the centre on Rua das Hortas, cost about €272 at 7.1, and the Suite Hotel Jardins da Ajuda, the most reviewed hotel in the city with 3,214 reviews, about €288 at 7.9, with indoor and outdoor pools.

The Florasol Residence, a three-star with a large outdoor pool and self-catering rooms, cost about €306, and Hotel Orquídea, a three-star in São Pedro with a large roof terrace over the city, about €328 at 8.0.

To save on the rest, take the city buses, €2.05 a trip on board and €1.45 on a GIRO card, on the 2026 tariff.

Common questions

Are there hostels in Funchal?

Few: the Santa Maria Hostel in the old town scores 8.4 from 933 reviews; Hostel Monaco in the centre scores lower.

What is the cheapest way to stay in Funchal?

A guest house or a small flat: the median guest house cost about €217 for two October nights for two.

Is Funchal expensive for hotels?

On the October sample, the median hotel cost about €477 for two nights, and the cheapest about €228.