If you want a decent hotel in the old town, this is the only real option. Location is perfect and you have everything within reach. In our opinion this is one of the best hotel locations in all of Funchal because you are by the water, but at the same time in the beautiful old town, which is what made us fall in love with Madeira the first time we visited.

Our video from there: https://youtu.be/wi5zgUJSRyk?t=248