Since we got to the hotel we were well treated like we were someone of the family. I really enjoyed my stay.

For a cheap break, this was an absolute gem of a hotel. Our family of 4 stayed in two adjacent double rooms, each with plenty of room and (when the clouds went away) a lovely view to the distant sea. An amazing buffet breakfast is included in the rate. In the evening, there is a log fire in the guests' living room area, along with a selection of games and some books (mostly foreign).
The location is very convenient for walkers, being within easy reach of everything in western Madeira.
But the best thing about this hotel is the welcome extended to guests. They really know how to look after you as individuals, getting to know your preferences quickly and suggesting things to do on a wet day.
The only slight problems are that the upstairs rooms have a design flaw in the balcony doors, meaning that they let in rain unless the outer shutters are closed. Also, the in-house dinner could get expensive if you eat in every night, but there is a wide choice of cheap restaurants at the marina in Calheta, 20 minutes drive away.

This hotel is the only one on the high plateau of Paul da Serra, at 1400 meters, 10 km from any nearest houses and quite near Rabacal, the famous levada walk. It's isolation means of course that it is very quiet and no other noises that can disturb, so ideal for people who seek rest and quietness or want to walk. But it's altitude means also that there is a high chance that walks will not offer much view as it is often in clouds, especially in winter. Rooms are not big but have heating (airco not necessary at this altitude), carpet, a nice bathroom with bath, a balcony or terrace overlooking the road and facing the south coast but not seeing much of that. The TV on the table has many channels, Portuguese, 5 German, 1 Dutch (BVN), 1 Italian, 1 Spanish, CNN. Breakfast is not much but just adequate. When there are few guests it is served in the cybercafe, not a buffet. There's also a recreation room with bigger TV, sofas and chess tables. Also a bike rent shop but I found the available bikes too small for me. Also a souvenir shop, 2 restaurants, a Catholic chapel and a cybercafe (2 Euro per hour). The Rain Jungle Cafe is a restaurant decorated like a jungle with large stuffed animals (or looking like it). A 3-course meal will cost about 30 Euro, not cheap but the only other restaurant is a grill with not much atmosphere. The Cybercafe serves sandwiches and snacks all day till 6 PM.
The hotel offers transportation but not for free. A drive to Porto Moniz on the northwest coast was quoted to me as costing 40 Euro.
A great hotel to get away from everything and a lot quieter than the Eira do Serrado mountain hotel.