Funchal is the capital city of Madeira, and it's a ruddy cute one! Funchal is situated around the port, which also sees tourists de-camp from cruise ships (so watch out as there can be an influx of people). So there are good amenities all within a handy walking distance.
We stayed in a gorgeous boutique hotel Caju Le Petit Hotel in the historic area, overlooking a lovely cobblestone street with great restaurants and used that to explore every day!
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