At first sight, Setubal seems to be a rather ugly city – too close to Lisbon to develop a strong profile of its own. Grown on the basis of industrial wealth (production and port), it expanded in the 1960s the results of which are a very, very visible belt around the old centre of the town. Taking a closer look, you will discover a very charming, authentic Portuguese city that has maintained its character, which wasn’t influenced by tourism, for instance.

The Pousada of Setubal is overlooking the city and the large lagoon-like bay, which actually is the delta of the river Sado. The intimate hotel with 16 rooms has been integrated in a medieval fortress, thus exemplifying the philosophy of the Portuguese Pousadas: Allowing people to experience the country’s history. And in this case, they have succeeded to the fullest. Driving up the hill, entering through an enormous gate and later climbing up century-old stairs and alleyways really provides a feeling of history. And you are rewarded by stunning views and peaceful tranquillity. Well, to be honest, a large part of the view is on the huge industrial port, and another piece includes the hotels of Troja – a magnificent peninsula just across the bay. It does not diminish the quality of the location at all. On the contrary, especially in the evening, it is charming and entertaining to look down on the city centre, which is of course along the old port – just below the Pousada.

The staff at the Pousada Sao Felipe is impeccably friendly, the rooms are spacious, most bathrooms have windows, and the air condition in the rooms is superb (which can be important at times). Try to get a room on the 3rd floor to the front where the view is best (301, 302, 303, 306), and always choose a Panoramic room. Frankly, if you can’t pay that extra 30ish Euros, consider to stay somewhere else; the standard rooms are on the first floor facing a dark backyard.

Breakfast is very good, given that they will do a full buffet even if they only have 6 of their rooms occupied (as was the case when I was there).

We stayed in room 101. All 10x rooms are "cells" with no window for the bedroom, but only a small window on 1. floor, a small room with a sofa. Thus the rooms are quite dark and difficult to get fresh air into, which makes them uncomfortable to sleep in (aircondition is available, but has virtually no effect as it is mounted on the 1. floor).
We paid 200/170 Euro for a Saturday & Sunday night, wich is almost 2x the price of other Pousadas.
The restaurant is quite good with a phantastic view of the bay area. Meals are according to 4* - no better no worse. Service is excellent and the staff is really committed to do a good job.
If you make a reservation make sure you get a room on the 2. floor, the main building, with a window to the harbour.
No WiFi available. Parking is in the castle but there are some stairs/a long entrance to overcome until you are in the reception.
Compared to other Pousadas this one is not worth it's price. Book a room in the city and have dinner in the restaurant to get the view and you're better off.

The view is really great, and you are really located into the old castle. Be careful, some rooms have no view and are very dark... Ask for a room with a view. Not because of the view itself (the windows are pretty small actually) but because these rooms are really bigger and get more light. The view is fantastic... from the restaurant and from the bar. The price is extremely reasonable, so don't hesitate to make a stop at Setubal. This is not the most touristic place to be, but you will not regret it nevertheless. We enjoyed this hotel very much.

We spent a night at the Pousada on our way from Lisbon airport to the Algarve. The Pousada was very easy to find, thanks to the numerous waysigns. Unlike what you may believe from the official photos, the Hotel does not overlook the open sea, but rather the city of Setubal, including the port and noisy construction sites. Setubal itself is on the Sado river estuary.

The Pousada is really located on top of the castle, a long way uphill over stairs from the car park, so it is helpful to organize your luggage so you do not have to haul all your bags for one night. The staff was very friendly and prepared for our late arrival. The room was quite large. The breakfast was very adequate. Overall, it was a good experience for our first night in Portugal.

The market of Setubal is definitely worth a visit, if you can find it (tip: it is a large hall near the port with lots of cars parked around it.