You may have heard of Madeira as the “Hawaii of Europe” – or that it’s a hidden gem that’s quickly becoming the next European hot spot.  Either way, this little Portuguese island is a destination you must check off your travel bucket list.

The larger towns and capital city of Funchal have a rich, historical past that make for some pretty cool sightseeing. Visitors have a lot to explore with Funchal’s Mercado dos Lavradores, cable cars, and the promenade. Outside of the city, the island offers amazing adventures for nature-lovers, like catching some waves or hitting up some of its famed hiking trails.

Most hostels in Madeira are in the capital of Funchal, which provides easy access on foot to the marina and historic old-town city center. Some hostels and low-cost hotels are located in coastal towns around the island. These are closer to the natural attractions in Madeira, like surfing and hiking. Apartments offer a more private stay to travelers, at prices that won’t break the bank.

Quick Answer: The Best Hostels in Madeira

Best Hotels in Madeira

The Best Hostels in Madeira

Madeira, Portugal

Overall Best Hostel in Madeira – Santa Maria Hostel

Santa Maria Hostel Madeira
Santa Maria Hostel has everything you could want!
  • $
  • Location: Funchal
  • Free WiFi
  • Free linens
  • Outdoor area
  • Free cake!

It’s pretty easy to see why Santa Maria Hostel is our pick for the Best Hostel in Madeira. It has it all – good prices, a central location, various room options, and awesome common areas to relax and meet other travelers.

This hostel is a renovated school building in the historic town center of Funchal, and sits right in the middle of the tiny, energetic streets. It’s also super close to the beach and all the city sights, including the popular cable car.

Best Cheap Hostel in Madeira – 109 Funchal Hostel

109 Funchal Hostel Madeira
  • $
  • Location: Funchal
  • Free WiFi
  • Free linens & towels

This traditional hostel will set you up for a great stay at a low cost in Madeira. 109 Funchal Hostel conveniently offers both affordable dorm and private rooms, so you won’t have to worry when traveling on a budget.

The hostel is in the center of Funchal and just steps away from the beach, so you’ll be close to everything the area has to offer.

Is This the Best Backpack EVER???
Aether Backpack

We’ve tested countless backpacks over the years, but there’s one that has always been the best and remains the best buy for adventurers: the broke backpacker-approved Osprey Aether and Ariel series.

Want more deetz on why these packs are so damn perfect? Then read our comprehensive review for the inside scoop!

View on Osprey View on REI

Best Hostel with a Private Room in Madeira – Residencial Funchal

Residencial Funchal Madeira
Private rooms at affordable rates!
  • Free WiFi
  • Location: Funchal
  • Free linens & towels

Residencial Funchal is the best place if you’re looking for more private accommodation. It’s in a central area of Madeira, right in the middle of everything you want to do in Funchal.

Immediately outside you’ll find the Zona Velha with its beautifully painted doors, and the Mercado do Lavradores, the market of fruit, veggies, fish, and flowers.

Best Hostel for Solo Travellers in Madeira – Madeira Native Motion

Madeira Native Motion Madeira
The perfect escape
  • Location: Lombada dos Marinheiros- Fajã da Ovelha
  • Free WiFi
  • Infinity pool
  • BBQ

Madeira Native Motion is an oasis for the solo traveler keen to dive into that hostel life. Located in Lombada do Marinheiros-Fajã da Ovelha, this hostel is a 50 minute drive from the city, making it the perfect place to get away.

Madeira Native Motion can help arrange outdoor activities like surfing, boating, hiking/biking, and paragliding at discounted prices. It’s a bit of a drive to get here, so remember to stock up on groceries for the communal kitchen or BBQ.

Madeira Native Motion is one of our favourites in Madeira but they’re not taking guests right now. We’re not sure if they’re closed for good but we hope they’ll come back soon.

Best Party Hostel in Madeira – Stay Inn Funchal

Stay Inn Funchal Madeira
  • $$ 
  • Location: Funchal
  • Free WiFi
  • Restaurant/bar
  • Fitness room
  • Terrace 

Ironically named, the Stay Inn Funchal is in a central location and an easy walk to restaurants and clubs. The hostel also features its own bar, which is ideal if you’re after a warm-up drink before hitting the town.

In true party-hostel style, late check-out is permitted. It comes in pretty handy when you’ve stayed out a bit late and don’t feel like rising and shining the next morning.

Stay Inn Funchal is one of our favourites in Madeira but they’re not taking guests right now. We’re not sure if they’re closed for good but we hope they’ll come back soon.

Best Hostel for Couples in Madeira – Quinta Splendida Wellness & Botanical Garden

Quinta Splendida Wellness & Botanical Garden Madeira
The views here are stunning
  • $$$$
  • Location: Canico
  • Pool
  • Fitness room
  • Restaurant & bar
  • Billiards 

Quinta Splendida Wellness & Botanical Garden is the getaway you and your partner are dreaming about. This restored 19th century Manor House is set in a 30,000 square meter garden (with over 1,000 different types of plants), overlooking the Atlantic Ocean.

You can relax by the heated outdoor pool or book spa treatments together. Some rooms have kitchens so you can make your own meal, unless you’d prefer to have a romantic dinner at the restaurant.  

Quinta Splendida Wellness & Botanical Garden is one of our favourites in Madeira but they’re not taking guests right now. We’re not sure if they’re closed for good but we hope they’ll come back soon.

Best Hostel for Digital Nomads in Madeira – Reed’s View

Reed’s View Madeira
Work with a view
  • $$$ 
  • Location: Santa Cruz
  • Free WiFi
  • Free linens & towels 
  • Parking
  • Kitchen
  • Balcony

The most important needs of the digital nomad are usually internet speed and signal. Most places on the islane provide free WiFi but don’t host communal computers, which makes this hostel our top pick for digital nomads.

As we live in the digital age, the tech-savvy of us usually bring our devices with us. In your own private apartment, you can hook up to the free WiFi without someone else slowing it down – a luxury.

Reed’s View is one of our favourites in Madeira but they’re not taking guests right now. We’re not sure if they’re closed for good but we hope they’ll come back soon.

Travel with peace of mind. Travel WITH a security belt.
Active Roots Security Belt

Stash your cash safely with this money belt. It will keep your valuables safely concealed, no matter where you go.

It looks exactly like a normal belt except for a SECRET interior pocket perfectly designed to hide a wad of cash, a passport photocopy or anything else you may wish to hide. Never get caught with your pants down again! (Unless you want to…)

Hide Yo’ Money!

What to Pack for your Madeira Hostel

Pants, socks, underwear, soap?! Take it from us, packing for a hostel stay is not always quite as straight forward as it seems. Working out what to bring and what to leave at home is an art we have perfected over many years.

Don’t Let Snorers Keep You Awake!
Don’t Let Snorers Keep You Awake!

Ear Plugs

Snoring dorm-mates can ruin your nights rest and seriously damage the hostel experience. This is why I always travel with a pack of decent ear plugs.

Keep your laundry organized and stink free
Keep your laundry organized and stink free

Hanging Laundry Bag

Trust us, this is an absolute game changer. Super compact, a hanging mesh laundry bag stops your dirty clothes from stinking, you don’t know how much you need one of these… so just get it, thank us later.

Stay Dry With a Micro Towel
Stay Dry With a Micro Towel

Sea To Summit Micro Towel

Hostel towels are scummy and take forever to dry. Microfibre towels dry quickly, are compact, lightweight, and can be used as a blanket or yoga mat if need be.

Make Some New Buddies…
Make Some New Buddies…

Monopoly Deal

Forget about Poker! Monopoly Deal is the single best travel card game that we have ever played. Works with 2-5 players and guarantees happy days.

Reduce Plastic – Bring a Water Bottle!
Reduce Plastic – Bring a Water Bottle!

Grayl Geopress Water Bottle

Always travel with a water bottle! They save you money and reduce your plastic footprint on our planet. The Grayl Geopress acts as a purifier AND temperature regulator. Boom!

Check out our definitive Hostel Packing list for our top packing tips!

Travel Safety Tips for Madeira

ALWAYS sort out your backpacker insurance before your trip. There’s plenty to choose from in that department, but a good place to start is Safety Wing.

They offer month-to-month payments, no lock-in contracts, and require absolutely no itineraries: that’s the exact kind of insurance long-term travellers and digital nomads need.

SafetyWing is cheap, easy, and admin-free: just sign up lickety-split so you can get back to it!

Click the button below to learn more about SafetyWing’s setup or read our insider review for the full tasty scoop.

Final Thoughts on the Best Hostels in Madeira

You can’t go wrong with a stay on Madeira if you’re traveling around Portugal. You definitely won’t run out of things to do, whether you’re into history, nature or just enjoy chilling on the beaches.

Whether you stay at Santa Maria Hostel or any of the others on our list, you’ll be sure to totally enjoy yourself without compromising your trip or your wallet. Plus, you’ll never be far from some of Madeira’s best trails, ideal for adventure lovers .

And for transparency’s sake, please know that some of the links in our content are affiliate links. That means that if you book your accommodation, buy your gear, or sort your insurance through our link, we earn a small commission (at no extra cost to you). That said, we only link to the gear we trust and never recommend services we don’t believe are up to scratch. Again, thank you!