Three House Hotel Review: Best Boutique Stay in Funchal for Couples

Three House Hotel could not be in a better spot.

It’s right in the heart of Funchal, which made it so easy for us to walk everywhere: bars, restaurants, cute pottery shops like Lillie Ceramics, the Mercado dos Lavradores (the famous farmers market), and Rua de Santa Maria, the colorful street lined with painted doors.

We absolutely loved the location. It gave us access to local life while keeping us close to plenty of nearby hikes.

The parking setup can be hard to find but easy once you know how it works.

You’ll spot the hotel from a distance, but there’s a small pop-up structure in front that’s actually the garage entrance.

We drove down a pretty steep ramp, grabbed a token on our first visit, and then exchanged it with the front desk for a key card that let us come and go as we pleased.

There are three garage levels, so don’t panic if the first one’s full.

Just know the turns are tight, so choose your rental car wisely. We picked this car that had enough power to handle Madeira’s mountain roads but was small enough to squeeze into the narrow garage.

By the way, parking is complimentary!

Once we parked and took the elevator up to the lobby, we were greeted by the friendliest staff.

Sid, who checked us in, immediately set the tone for our entire stay.

He was warm, professional, and genuinely eager to help. He gave us their WhatsApp number for easy communication, which made everything seamless.

Within minutes, he texted us restaurant tips, hike suggestions, and a few local gems we never would have found on our own.

The hospitality here immediately stood out.

Three House doesn’t just hand you a key.

They hand you a local connection.

1. Contemporary with a retro twist: The design instantly grabbed us. Three House feels fresh and modern with just the right hint of retro personality, like the bright red SMEG fridge in our kitchen that added a fun pop of color.

2. A fabulous location with a standout rooftop: You can’t beat the setting. The rooftop is easily one of the best in Funchal, with incredible views and plenty of space to relax after a day of hiking or exploring.

3. Thoughtful local touches: Even the small details feel intentional, like the local Fábrica Santo António biscuits stocked in the kitchen, a simple but perfect welcome to Madeira.

Three House Hotel is a small boutique property packed with personality, and rooms book fast. I mean really fast.

If you’re even thinking about visiting Madeira during high season, book it now, especially if you want several nights in a row.

There are five room types:

→   Studio

→   Apartment

→   Superior apartment

→   Two-bedroom apartment

→   Superior two-bedroom apartment

We stayed in the apartment, which had an open-plan kitchen and living area with lots of space, natural light, and clean, contemporary finishes in calming neutral tones.

Our view overlooked the cable cars, which were surprisingly fun to watch from the window.

Bedroom

The bedroom had a comfortable king-size bed, blackout curtains, plenty of outlets, and a closet for luggage.

The air conditioning unit is in the bedroom, which kept the space perfectly cool at night.

Bathroom

The bathroom has a large shower, generous counter space, and even washcloths, which are a rare treat in Europe!

There’s a cubby below the sink that fits both of our toiletry bags perfectly. 

Living Room & Kitchen

The living area had a big couch, a dining table for two, and a TV we never turned on because we were too busy exploring.

The kitchen came equipped with a stovetop, oven, and full-size fridge, everything we needed to whip up quick breakfasts.

The only odd thing was that there was no microwave. I learned that the hard way while trying to make oatmeal one morning.

One of the best features was the community laundry room.

For anyone hiking in Madeira, having access to laundry facilities is a huge perk. We picked up detergent from the nearby Pingo Doce grocery store and were so happy to have clean clothes without paying hotel laundry prices.

Just be considerate and grab your clothes once they’re done since some guests tend to forget.

There are no balconies, but it really doesn’t matter. Just order a glass of wine or your favorite cocktail at the bar and enjoy the amazing outdoor space on the rooftop. 

It’s hands down a better view than any balcony could offer.

Breakfast

There’s no formal breakfast service, but every morning fresh, warm croissants are delivered right to your door, hanging in a little bag that makes waking up feel extra special. 

There’s no formal breakfast service, but every morning fresh, warm croissants are delivered right to your door, hanging in a little bag that makes waking up feel extra special.

If you’re craving something more, the restaurant serves brunch starting at 10 a.m.

Or, better yet, you can order anything off the restaurant menu and have it delivered straight to your room for a 10% service fee if you’d rather stay cozy and skip getting dressed up.

Lunch

Lunch was fantastic.

We had Lamb Truffle Ragu with fresh pappardelle and shimeji mushrooms, along with Three House fish tacos with crispy bellyfish, piccalilli mayo, and avocado.

We paired everything with crisp glasses of Sauvignon Blanc, the perfect midday pairing before heading back out to explore Funchal.

Dinner

For dinner, we ordered the Arroz Socarrat, a caramelized rice dish (kinda like paella) topped with perfectly cooked tenderloin. It’s a meal for two and incredibly satisfying. 

The rice is cooked for exactly 33 minutes, not 32, not 34, and while I didn’t time them, I loved the precision.

We paired it with a bottle of Taboadella Reserva Jaen from the Dão region of Portugal. As big wine travelers, we always geek out over restaurant wine lists, and this one impressed.

A few years ago, we did a lovely wine tour in the Douro Valley but never made it to the Dão region, which is known (according to Wine Folly) for exceptional quality and aging potential.

The Dão Jaen was full-bodied with bright acidity, firm tannins, and deep blackberry notes, a perfect pairing with the rich, caramelized rice and tender beef.

And then came dessert, which totally surprised me.

I’m not a cheesecake person, but the Basque Cheesecake San Sebastián with pumpkin and orange ice cream was incredibly light and refreshing, the perfect way to end a heavier meal.

By the way, if you love wine, don’t miss doing a wine tour in Madeira during your stay!

We had such a fun time learning about the local varietals grown on the island during our amazing wine tour with Roberto.

It’s one of those experiences that gives you a whole new appreciation for Madeira’s winemaking heritage.

Coffee & Cocktails on the Rooftop

They also make some incredible coffee.

Three House uses beans from Odd Coffee, a local roastery on Madeira that does a light roast to really highlight the natural flavors of the beans.

And for those who also geek out on coffee, yes, they have a La Marzocco machine. If you’re a foodie who appreciates these kinds of details like we do, you’ll love Three House.

The rooftop bar serves up some seriously creative and unique cocktails like the …

→   Pearish (Botanist Gin, Burnt Cheese Tart, Pear, Lemon)

→   Picky Pickle (Mezcal Siete Misterios, Tequila Corralejo, Toasted Corn Flour, Red Cabbage Pickle, Spices)

We love mezcal and visited several mezcal distilleries in Oaxaca, which was super fun!

→   Sentinel (Santissima Trinidad Rum, Smoked Fennel, Peach, Three Cents Soda)

My husband and I have tried cocktail bars all over the world, from Mexico City to Hong Kong to Japan, and these combinations definitely caught my eye.

We didn’t get to try them this trip, but they’re at the top of my list for next time. If you’ve had one, let me know in the comments because I’m dying to hear which cocktail was your favorite.

They also have a great gin and tonic selection. We actually had an incredible gin from a small-batch Madeira distiller called O Reizinho. His three-year cask strength rum is fantastic, but we were surprised by how much we loved his gin.

We even set up a rum tasting with the owner, Pedro, while we were there, and it was such a fun experience. Maybe Three House will carry his gin in the future.

And don’t miss the Three House Happy Hour Special. One, two, three … the third cocktail is free. It’s a clever deal that makes rooftop drinks even better.

Pool

The best amenity at Three House Hotel is the rooftop pool, which is a heated natural stone saltwater pool you can enjoy almost year-round.

The design is a little quirky. As you walk up, there’s a narrow walkway through the center that splits the pool in two, leading to a small raised platform with panoramic views of Funchal.

It’s the perfect spot to sit back with a cocktail and take it all in.

The rooftop is beautifully landscaped with plenty of tropical plants that create a sense of privacy and intimacy. It feels lush and inviting, like a little urban oasis.

There are high-top tables along the edge if you want a city view, plus cozy shaded spots under a pergola-style canopy where you can relax out of the sun.

And under that pergola?

A gold disco ball. I can only imagine it adds a whole new level of fun during one of their rooftop parties.

Near the pool, there’s also a small castle-like structure with a spiral staircase that leads to an even higher vantage point.

From up there, you get sweeping views of both the city and the mountains.

Whether you’re swimming, sipping, or just soaking in the views, the rooftop is one of those spaces that makes you forget there’s an entire city buzzing just below you.

Gym

There’s also a gym on the second floor for anyone who wants to keep up their routine, but we didn’t use it.

With so many incredible hikes across Madeira, we had plenty of ways to break a sweat outdoors.

Hiking

This is your vacation, so the activities are really what you make of them.

Three House Hotel doesn’t offer any official structured activities, but all you have to do is tell the staff what you’re into, whether it’s hiking, great restaurants, wine tours, or whatever, and they’ll load you up with insider recommendations.

We spent most of our time exploring Madeira’s incredible outdoors.

During our stay in Funchal, we hiked Levada dos Balcões, Vereda da Ponta de São Lourenço, Levada do Alecrim & Lagoa do Vento Loop Hike, Levada do Caldeirão Verde, Bica de Cana Viewpoint, Pico do Arieiro, and the Banana Route.

Each one offered something different: lush forest paths, dramatic coastal cliffs, and those iconic Madeiran mountain views that make you feel like you’re standing on the edge of the world.

Foodie Experiences

We also did a super fun Funchal food tour learning about all the great bites and sips that make up classic Madeiran cuisine.

From the heavenly delicious bolo do caco and pastel de nata to poncha and fortified Madeira wine, it was such a tasty crash course in the island’s flavors and food culture.

And of course, Funchal’s dining scene is reason enough to plan your evenings carefully.

We had standout meals at Akua and Yuki, both run by the talented local chef Julio Pereira, and another memorable dinner at Casal da Penha (won a Michelin Guide Bib Gourmand award!).

Unique Madeira Experiences

One day we rode the cable car up to the Monte Palace Tropical Gardens and wandered the gorgeous, meticulously-kept grounds with peacocks strutting and flamingos just casually hanging out.

Then we did the classic Monte Toboggan ride down the hill.

It’s 100% touristy, but truthfully, it’s way too fun to skip!

Two experiences that are uniquely Madeira and totally worth your time.

Wine Tour

If you’re a wine lover, definitely carve out time for a wine tour during your trip.

We booked ours independently, and it was such a fun way to learn more about Madeira’s unique varietals and local producers.

This part honestly blew me away. The value you get at Three House Hotel is unreal.

Rates start around 95 euros for the Panorama Studio and go up to about 195 euros for the Two-Bedroom Superior Apartment.

I honestly can’t remember the last time I paid that little for a hotel that offered this kind of quality, hospitality, and foodie-level experience.

The apartment we stayed in started around 115 euros a night, which felt like a steal given the space, location, and comfort. Of course, prices vary depending on the season and your dates, but the overall value is exceptional.

I’d put Three House up there as one of the best-value boutique hotels we’ve ever stayed at and definitely the best bang for your buck in Funchal.

We’re pretty picky travelers, so when we pick a hotel, it has to check all the boxes: location, hospitality, thoughtful details, and great value.

Three House hit every one of them.

✔️  Exceptional Ratings & Warm Hospitality

We’re super discerning travelers, and reviews always matter to us.

Three House continuously gets exceptional ratings (we’re talking like 9.6 on booking.com, which is insanely high!), and it’s easy to see why.

The hospitality is warm and genuine in a way that even many luxury hotels don’t always pull off. The staff truly wants you to enjoy your stay and make you feel at home.

✔️  Location

If it’s your first time visiting Madeira, staying in Funchal is a no-brainer.

It’s the most central base on the island, which makes getting around super easy.

Almost all tours, transfers, and day trips start from Funchal, and ordering an Uber or Bolt is no problem when you’re in the city. Once you get farther out, transportation can get trickier, but from here, everything is within easy reach.

The location is also packed with things to do.

There are endless restaurants, bars, and cute little shops right outside your door. We wandered around the Painted Doors along Rua de Santa Maria, and spent time exploring the coastal walk to Câmara de Lobos.

Staying in Funchal made it all effortless.

✔️   Thoughtful Touches

It’s the little details that make Three House stand out.

Every morning, fresh croissants are quietly delivered to your door.

There’s a complimentary laundry room, which is such a lifesaver when you’re hiking as much as we were.

There’s also on-site parking that’s completely free. No valet fees or surprise charges.

And as a sweet surprise, Sid left us a box of UAUCacau artisanal chocolates made from local Madeiran ingredients at checkout. They were almost too pretty to eat. Wow, just wow.

For what you pay, these thoughtful touches add up to an incredible amount of value.

✔️  Rooftop and Foodie Experience

The rooftop alone could be a reason to stay here.

Between the heated saltwater pool, the cozy layout, and the creative restaurant, it’s the kind of place you look forward to coming back to after a full day out exploring.

We also really appreciate hotels that support local producers and build menus around regional ingredients.

Before booking Three House, we did a lot of research.

Funchal has no shortage of incredible boutique stays, and we seriously considered a couple before landing on our final pick.

Villa Quinta Torrinha

Villa Quinta Torrinha was high on our list.

It’s tucked in the Santa Luzia district of Funchal and has serious old-world charm. The property is over 130 years old and used to be a working farm that once grew sugar cane and bananas.

Today, it’s been transformed into a peaceful, elegant hideaway with terraced gardens, a pool, and sweeping views of the mountains, city, and port.

The property only accommodates about 20 guests at a time, so it offers a quiet, exclusive atmosphere that really appealed to us.

One reason we decided to stay at Three House Hotel for our first Madeira trip is that we wanted to be right in the heart of Funchal for easy access to restaurants and tours.

But we did wrap up our trip with a few nights at an incredibly relaxing wine country retreat in the north called Terrabona Nature and Vineyards. Don’t miss all the juicy hotel review details of my stay if you’re interested!

Canto Apartments

We also loved the look of Canto Apartments, a small collection of restored apartments in a century-old building right in the heart of Funchal.

The space blends historic character with a bright, minimalist design and includes a tropical courtyard with a small pool, a cozy lounge, and a rooftop terrace with panoramic views of the city.

It has a soothing old-world charm energy that’s perfect if you prefer a smaller, independent stay with authentic local character.

We were really tempted, but ultimately Three House’s rooftop pool, restaurant, and unbeatable location sealed the deal for us this time.

Our time at Three House Hotel couldn’t have been a better start to our Madeira adventure. It captured everything we love about travel, thoughtful design, warm hospitality, and incredible food.

This boutique hotel completely overdelivered.

Three House proved that you don’t have to spend a fortune to enjoy great service, comfort, and character. It’s one of those rare hotels that makes you feel at home the moment you arrive and a little sad to leave when it’s time to check out.

For us, staying here set the perfect tone for the trip. We spent our days exploring Madeira’s dramatic landscapes, sipping incredible wine, and returning each night to a space that felt like our own stylish city retreat.

Then, heading north to Terrabona Nature and Vineyards gave us the perfect contrast, peaceful vineyard views, romantic privacy, and that quiet countryside charm that makes you slow down and savor it all.

Together, the two stays gave us the best of both worlds, a central, boutique experience in the south and a serene, wine-filled escape in the north.

If you’re planning a trip to Madeira, I can’t think of a better way to experience the island.

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Questions about our stay at Three House Hotel?

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