We stayed from 7th to 21st January this year, and a lot of what I was going to say, has already been covered by "mothersday". I would add that another problem arising from the cliff repair and the road closure, is that several small cafes and restaurants along there are closed, so there is no alternative to the hotel for eating within a short walking distance. These works are due to go on for 3 months, and I believe that booked guests shoukld have been advised in advance, but as I did get a very nice room upgrade I felt I got a good deal.
We took B&B, and dined in the a-la-carte restaurant. This was a very friendly, quiet, waitered place which we found to be much nicer than the main (buffet) dining room for dinner. It does in fact offer a set 3 course meal (limited choice of 2 items (changed daily)per course) for 12 euros, as well as pizzas and more ambitious, but not hugely expensive, food.
Calheta being a bit out of the way, you may feel, as we do, that a car would be useful. Madeira, with its scenic routes, is very rewarding for drivers, but its often very steep, narrow and winding roads make it a demanding drive; not for the faint hearted! Signeage is particularly erratic. In particular, access points to the east-west expressway when returning from Funchal, are not always marked; twice we completely missed them and found ourselves driving into the heartland. We found it best to explore gradually, as the natural road hazards (not excessive, I must stress) are compounded if you have just realised you have lost your way.
Room Tip: Rooms in the new extension are good. If on a budget, cliff view rooms seem OK.
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This review is the subjective opinion of a TripAdvisor member and not of TripAdvisor LLC