Best Boutique Hotels in Madeira, Portugal

1905 Zino’s Palace

1905 Zino’s Palace is not your average boutique hotel. This pink-washed, fairy-tale building once belonged to Madeira royalty. It was a summer residence for the island’s governor. The palace was originally built in 1905 for Manuel Inácio de Souza Zino, one of Madeira’s wealthiest figures at the time. Its distinct coral-pink façade and romantic turreted architecture have earned it local legend status. Today, it’s a restored heritage palace where modern comfort meets timeless charm.

From the moment you arrive, the views steal the show. On one side: deep blue sea. On the other: lush mountains. Rooms have either a sea or mountain view, so no matter where you land, the scenery is spectacular.

The romantic on-site restaurant offers creative Portuguese cuisine with vegetarian, vegan, and gluten-free options, all plated with style and care. Breakfast is a feast, with warm dishes, local delicacies, and fresh pastries that would impress any foodie. Later in the day, treat yourself to high tea or a signature cocktail out on the terrace as the sun begins to dip.

Need to relax even more? Head to the pool bar and outdoor lounge area, where you can unwind with a drink, a book, or simply the sound of the waves far below. The team here has also thought of everything else, from air conditioning and private bathrooms in each room to free on-site parking and even a tour desk for exploring the area.

Good to know: The road up to the hotel is steep, you’ll want a confident driver behind the wheel. But the view at the top is absolutely worth it.

What about the Location?

It's tucked in Ponta do Sol, one of the sunniest spots in Madeira. This charming coastal village offers a laid-back atmosphere, photogenic cliffs, and local cafés perfect for afternoon strolls. You're a short drive from scenic levada walks, black-sand beaches, and dramatic viewpoints.

Hotel Cajú

Hotel Cajú is a hidden gem in the heart of Funchal. It blends vintage soul with a modern twist, and it does it effortlessly. Once a century-old building, this boutique hotel has been transformed into a creative escape for curious travelers who value design, comfort, and authenticity. Though you’re just steps from Funchal’s liveliest streets, the space inside feels curated and quiet. The windows let in soft natural light.

But the real heartbeat of Hotel Cajú? Prima Cajú, the on-site café and restaurant. It’s a local favorite for a reason. Think nutritious, colorful dishes served in a space where moss hangs playfully from the ceiling, (the moss is real). From green smoothie bowls to rich espresso, this café fuels your day in the best way.

Need to keep up your routine? The hotel has a compact but well-equipped fitness center. Prefer to explore? You’re a short walk from Funchal’s marina, farmers’ markets, and the old town’s charm. And when it’s time to unwind, the bar serves cocktails with a kick and zero pretension.

Staff go out of their way to make you feel at home, from insider tips on the city to thoughtful touches in your room. Breakfast is generous, healthy, and beautifully presented, don’t miss the homemade granola or fresh sourdough toast.

Interesting fact: Hotel Cajú was designed by renowned Portuguese architect Paulo David, who’s known for blending architecture with nature. His touch is evident in every detail, from the building’s sustainable elements to its respect for the original 19th-century structure.

Good to know: Parking is at a nearby hotel and costs €15 per day.

What about the Location?

It's just in the center of Funchal. Because you're in a central location, you might hear some city life in the early evening, but it fades quickly and never overshadows the comfort.

Estalagem Da Ponta Do Sol

Estalagem Da Ponta Do Sol offers panoramic Atlantic views that are nothing short of breathtaking. This boutique hotel in Madeira blends minimalist design with the island’s natural beauty. Housed in a renovated traditional farmhouse, the hotel’s architecture is a harmonious mix of modern aesthetics and historical charm. Floor-to-ceiling windows in each room invite the outside in, offering either sweeping sea vistas or tranquil garden scenes.

Guests can unwind in the infinity pool that seems to merge with the ocean, it’s the perfect spot for pictures. People can also relax in the hot tub while soaking in the sunset. The on-site spa provides a range of treatments, including massages and a sauna, ensuring a rejuvenating experience.

If you are an active traveler, the hotel offers complimentary bikes to explore the nearby village of Ponta Do Sol, known for its sunny microclimate and charming streets.

Free parking is available, though it’s advisable to arrive early during peak seasons due to limited spaces.

Good to know: Estalagem Da Ponta Do Sol is not just a hotel but also a cultural hub, hosting a variety of events that bring together guests and locals, enriching the travel experience.

What about the Location?

Located in the picturesque village of Ponta Do Sol, the hotel is a short drive from Funchal and other island attractions. The hotel's unique position offers easy access to levada walks and other outdoor activities, making it an ideal base for nature enthusiasts.

Atrio

Atrio welcomes you with a Poncha cocktail or a glass of Madeira wine. Tucked between the ocean and the forest, it offers the best of both worlds. With only 22 rooms, privacy and peace are part of the design. Each room opens to its own terrace or balcony, with lovely views that stretch from the pine-covered hills to the Atlantic horizon. Breakfast includes freshly baked bread, fruit, warm dishes, and even daily surprises. Fresh orange juice is squeezed on the spot. Each morning feels a little different, but always delicious.

The hotel offers a wide range of amenities. You can wander through the garden, nap by the heated outdoor pool, or head out on a levada walk right from the door. If you’re not one to rush out, stay put, Atrio has its own restaurant, open daily for lunch and dinner. Everything is homemade and you also have vegetarian options. The food is fresh, local, and worth staying in for.

And there’s more! The bar has a cozy fireplace, perfect for a quiet drink in the evening. Plus, there’s a small library, sauna, and massage services if you’re in the mood to truly unwind.

Good to know: Free parking is available.

What about the Location?

You’ll find Atrio in Calheta, just far enough from Funchal to escape the buzz but still close enough for day trips. It's a top choice among rural boutique hotels in Madeira for travelers who want fresh air, quiet nights, and natural beauty all around.

Castanheiro Boutique Hotel

Castanheiro Boutique Hotel invites you to immerse yourself in the city’s charm, right in the heart of the action. If you’re after the best boutique hotels in Madeira that deliver both character and comfort, this one deserves your attention. Housed in five restored historic buildings, this hotel blends old-world soul with fresh, modern design. Rooms feel personal, never generic. Some offer rooftop views, others open onto terraces. However, all include thoughtful touches like ultra-comfy beds, modern bathrooms, and soft robes.

After a day of exploring, head up to the rooftop. The infinity-edge pool overlooks Funchal’s rooftops and the distant mountains, truly an unforgettable sunset spot. Craving downtime? The spa awaits with a hydrotherapy pool, Turkish bath, and soothing massage treatments. You’ll feel restored in no time.

Breakfast is simply perfect and has it all. From warm pastries and eggs to fresh fruits you might never have tasted before, every bite reflects the island’s bounty. Later in the day, happy hour at the bar draws both new friends and returning guests, an easy way to unwind and share stories.

What about the Location?

It's in the Center, you can explore Funchal on foot. Museums, markets, and sea views are just around the corner. And yes, the rooftop views? Always guaranteed.

The Vine Hotel

If you are looking for a hotel in Madeira that blends bold design, impeccable service, and unforgettable views, The Vine Hotel checks those boxes. Located in the heart of Funchal, The Vine is more than just a hotel, it’s a sensorial experience. The rooms are large, modern, and each is inspired by one of the four seasons. Think moody lighting, sculptural furniture, and deep soaking tubs. You’ll also find thoughtful touches like in-room movies, laptop-sized safes, and of course, fast, free WiFi.

Head up to the rooftop to find one of Madeira’s best views. The heated infinity pool stretches toward the ocean, so the views are guaranteed. A 20-meter hot tub and open-air massage area make it feel like a private sanctuary above the city. Want something different? Try a vinotherapy treatment at the on-site spa, it’s grape-based, antioxidant-rich bliss.

The rooftop UVA Restaurant serves French-Madeiran fusion using local ingredients, paired with a curated wine list that celebrates Madeira’s rich viticulture. Want to have some fun after dinner? Take your drink to 360° Bar for a cocktail with panoramic views.

The design, location, and service are excellent. Private parking is available, and the concierge team is known for their local recommendations. Perfect for couples, solo travelers, and design lovers.

Good to know: The Vine was designed by award-winning Portuguese architect Ricardo Bofill, with interiors by Nini Andrade Silva, Madeira’s most celebrated interior designer.

What about the Location?

You’ll find The Vine Hotel steps from Funchal’s Old Town, within walking distance to shopping, restaurants, and the waterfront.

Casas da Levada

Casas da Levada is a home away from home on Madeira’s Wild West Coast. This wonderful place is tucked into the rolling green hills of Ponta do Pargo, the setting is breathtaking. Overlooking the Atlantic, this collection of eco-friendly stone cottages is surrounded by gardens, ocean views, and even a small farm with baby goats and donkeys. Yes, baby goats! It’s as charming as it sounds. The property feels remote, but it’s still only 22 miles from Funchal, so day trips are easy.

Each house is self-contained and beautifully furnished, blending rustic touches with modern comforts. Expect natural wood finishes, cozy seating areas, terraces with loungers, and a fully equipped kitchen stocked with essentials. The best part? Fresh bread is delivered to your door every morning. Locally made jam included.

There’s a quirky Hobbit-style bar by the pool, perfect for an evening drink with a view. People love the serene vibe, the privacy, the baby animals. And that unforgettable morning ritual of waking up to warm bread and sea views. It’s like living in a postcard!

Good to know: Casas da Levada is proudly eco-conscious. Solar panels heat the water, rainwater is collected for the gardens, and many of the materials used in the construction are repurposed from old Madeiran homes.

What about the Location?

Located in Ponta do Pargo, sits on the historic Levada Nova trail, the island’s westernmost village, the property is ideal for exploring lesser-visited gems like the Farol Lighthouse or the nearby levada trails. A car is recommended, and there's free private parking on-site.

Villa Camélia Boutique House

If you want something truly special, stay at Villa Camélia Boutique House. This gem blends design, comfort, and local charm in a way that’s hard to find. With just the right mix of intimacy and elegance, this boutique stay gives you the sense of having your own private villa, minus the planning stress.

Villa Mamélia is housed in a beautifully preserved Madeiran house. Picture warm wood, volcanic stone accents, and curated decor that feels both elevated and personal. Each room offers comfort-driven amenities: private bathrooms, blackout curtains, fast WiFi, and calming views of the pool or garden, you choose!

People’s favorite part? The open-air bath! An unexpected luxury you’ll want to sink into more than once. The garden and pool area are peaceful, never crowded. Great for reading, napping, or simply soaking in that clean Atlantic breeze. If you’re up for a bit of activity, hiking trails and even bowling alleys are nearby. Off-site, but easy to get to.

Good to know: The staff is genuinely kind, attentive, and full of great local tips.

What about the Location?

Villa Camélia Boutique House is located in São Martinho, one of the calmest areas of Funchal. It’s just far enough from the busy center to enjoy real peace and quiet, but close enough to reach the ocean or downtown by car or public transport.