6 Best Hostels in Madeira For Budget and Solo Travellers

I’ve heard it too many times: “You can’t visit Madeira on a small budget.” Actually, you can, but only if you’re careful to plan your trip in advance – and even better, if you can secure a bed at one of the best hostels in Madeira.

Hostels are still a relatively new concept in Madeira, where for many, many years, the main tourists were older retiree couples. However, nowadays, people of all ages are seeing the chiselled mountains and dramatic hikes on social media and making their way here regardless of budget.

Now, here’s the thing. As I explain my guide to visiting Madeira on a budget, you can absolutely go to Madeira with a limited budget, but there are only 6 – 10 hostels on the island. Therefore, you need to book your trip at least 3 – 6 months in advance (or hope you get lucky with a last-minute bed).

In the guide I’ve just mentioned, I also share important budget tips like where to stay to avoid rental car and taxi costs. However, in this post, I’ll be focusing on sharing the best hostels in Madeira, and who I’d specifically recommend them to.

Disclosure: This post may include affiliate links. If you decide to click through and make a qualifying purchase, I will receive a small commission at no extra cost to you – thanks for your support.

Why Are There Not many Hostels in Madeira?

For many years, Madeira has been popular with retirees from Europe and America looking for a laidback coastal lifestyle.

However, in the past 2 – 5 years, Madeira’s dramatic hikes (especially the PR1 – Pico do Areeiro to Pico Ruivo) have gone viral on social media.

As a result, a younger audience (and therefore more budget and solo travellers) is flocking to the island. I’m one of them; I came here to hike the mountain trails and experience being a digital nomad in Madeira.

The thing is, for many years, there’s been no demand for hostel beds. Then, suddenly, there’s a huge demand but the island is still catching up.

Therefore, there are only a handful of hostels in Madeira: 6 – 10 to be exact… and about four of those I haven’t even featured in this list, because the ratings are too poor for me to feel good about recommending them.

As the demand grows, I expect that more and more hostels will crop up in the next few years. I will be keeping this list up-to-date as it does.

The 3 Main Hostel Locations In Madeira

• Funchal: If you’re visiting Madeira on a budget, the capital is the best place to stay, no questions about it. It has the best public transport and tour connections, so you don’t need to spend on a rental car.
• Porto da Cruz: This village on the east coast of Madeira is stunning, with a pebble beach (plus beach bar) and good access to two stunning hikes, Eagle Rock and Vereda do Lorano. However, it’s best explored with a car.
• North Coast: Again, a car is recommended for Madeira’s wild north coast. This side of the island doesn’t get as much sun as the south, but it’s excellent for surfing, natural pools and hikes.

Do You Need a Car to Stay at Hostels in Madeira?

Renting a car is one of the biggest expenses on your budget for Madeira. Therefore, most backpackers want to avoid that completely. If that’s you, then I recommend staying at a hostel in Funchal.

Funchal

You can always rent a car for just one day, like I did, and use buses and tours for the remainder of your trip.

However, if you’re keen to rent a car (which’ll cost €35 – €50 per day depending on the model), you can stay absolutely anywhere.

Having a car really does make exploring easier, and you may be able to share rental costs with other backpackers if you ask around your hostel and/or Facebook groups.

In that case, I recommend looking at the hostels in Porto da Cruz and the north coast. You can easily rent a car directly with a company in Funchal or check availability in advance on Discover Cars or Klook.

How Much Do Hostels Cost in Madeira?

A hostel bed in Madeira ranges from €33 to €51 per night.

The only hostel that’s more expensive is The Waves Hostel on the north coast (€140 per night), but that’s because it only has private rooms. I had to include it, though, because the reviews are just that good!

The Best Hostels in Madeira, By Location

1. Funchal

Funchal is the best place to stay if you don’t want to rent a car. It’s the capital city of Madeira, so it has the best public transport connections.

Most tours and hiking transfers only include drop-off and pick-up within the city limits, too, so it helps in avoiding costly last-minute taxis.

Best Hostels in Funchal

There are a handful of hostels in Funchal, some more expensive than others:

• Jaca Hostel Funchal (€43 per night) is my favourite hostel in Funchal. Rated 8.7/10 on Booking.com, it’s just above the town centre and has its very own café and a shared kitchen. Funchal Marina is a 15-minute walk away.
• Santa Maria Hostel (€36 per night) is rated 8.5/10 on Booking.com. No wonder, as it’s in one of my favourite parts of Funchal, within a five-minute walk of the promenade and popular hangouts like Art Food Corner and Barreirinha Bar Café. The hostel has a shared kitchen and a tour desk.
• 29 Madeira Hostel (€33 per night) is less than 100 metres from Jaca, placing it within easy reach of the marina and town centre. It also has a well-equipped shared kitchen.
• Lazareto 148 Hostel (€51 per night) is a good hostel with a shared kitchen and ocean views. However, it’s a little far from the city centre (35 minutes’ walk) and Funchal marina (45 minutes).

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2. Porto da Cruz

Porto da Cruz is a truly beautiful location on the rural east coast of Madeira. It’s just a village, but it has a pebble beach (with a popular bar in summer) and good access to the Eagle Rock and Vereda do Larano hikes.

The thing is, public transport is patchy in this part of Madeira and tours are practically non-existent (they don’t offer pick-up here), so you really do need to rent a car.

Best Hostels in Porto da Cruz

There’s only one hostel in Porto da Cruz, but it’s a really good one. It’s the sister hostel for Jaca Hostel in Funchal.

• Jaca Hostel Porto da Cruz (€43 per night) is located right next to the beach, restaurants, coffee shops and surf school. The hostel runs events like pizza parties, so it’s very community focused and great for solo travellers.

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3. North Coast (São Vicente)

The north coast is often overlooked in favour of Madeira’s sunny south coast. However, it has dramatic cliffs, bigger waves and a series of beautiful natural pools.

Renting a car is pretty important to get around here, as it’s much more rural than the south.

Best hostels on the north Coast of Madeira

There’s only one hostel on the north coast of Madeira:

• The Waves Hostel by Amazing Madeira in Sao Vicente (€140 per night) only offers private rooms, hence the steep room price. However, it comes with all the perks of a hostel like a shared kitchen and friendly, helpful hosts. The hostel is on the outskirts of São Vicente, so it bears repeating that a car will come in handy.

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That’s all for my guide to the best hostels in Madeira. Let me know your trip plans in the comments below, and I’ll reply with my best tips for saving money during your visit.