My wife and I were travelling with a UK based specialist tour operator - Inntravel. The first 2 nights of our holiday was based at this hotel. We paid to upgrade for a suite in the old building.
Pros: Pleasant appearence, beautiful suite, convenient for golf course and levada walk. Drinks and refreshments were good prices. The small nearby village was OK with a couple of small shops and bars and a nice little park.
Cons: Meal service was a bit rushed, there was some humming noise noticeable in our suite - perhaps coming from the kitchen extractor, altitude means there was a tendency to be affected by low cloud i.e. a bit cool and damp, no real views from the hotel.

Although the hotel is small, we felt it had an atmosphere of elegance and charm.
The room was in a modern extension. It was in a good state of decoration, and was clean, comfortable and well-equipped, and quiet.
The dining room – in the original, older part of the building - was small but elegant, with very pleasant décor, and served an excellent dinner from a table d'hôte menu (when we were there, I noticed the main course choice included a meat, fish & vegetarian dish).
The breakfast buffet was also very good, with eggs cooked to order.
The small public areas of the hotel were pleasant, and they served a lovely afternoon tea (with warm scones etc.). A computer giving free Internet access was available and functioning.

A very special place and the warmth and welcome have been outstanding. Very comfortable room with everything working well. Plenty of space and good facilities. The staff have been very special and helpful at all times. It was a pleasure to meet the owner who gave us all the background information on the hotel and plans for the future. We would certainly come again. The location is at quite an altitude and a hire car is essential. The local town is quaint and very interesting. The weather at this time of year is mixed and the temperature at this altitude rather lower than down at the coast. A swimming pool is planned for the near future and this will be an extra bonus. The gymnasium is good.
The food was abundant and the starters often a meal in themselves and no room for pud! The local wines available at supper time are lovely and include Madeira and Portugese wines. The menu is limited but the food is very good indeed.

My wife and I booked a suite for two nights back in May 06 and received email confirmation. On arrival, the hotel did not have our booking, nor our golf tee times confired. Fortunately, we had kept the email confirmation and since a large party of golfers were booking out, the hotel had a room for us. They were very pleasant and apologetic and offered to put us in the larger suite when it had been cleaned.The room was very pleasant, although the matress had a broken spring which protruded from the side and nearly drew blood - found on last day.

In a great location for the eastern part of Madeira for lavada walkers and for Serra Golf which is why we booked it. Only 7 minutes from the airport but you never hear any noise. Free internet access and reasonable prices (10 year old Malsey at EUR3.50). 30% discount on Serra do Santo Golf and transport if you need it. The free access to the Yacht and Leisure club advertised on their website - wasn't free. You had to pay Eur8 but which provided a credit against food.

We were offered half-board at Euro15 which we thought was very good value. The food was OK - nothing special though. Something got lost in the translation and they thought we didn't want the half-board but preferred to pay a la carte - there was only one menu (the half-board one but with a price against each course). On checking out they refused to give us the half-board rate which meant we left feeling we'd had bad service even though it was not much money difference. We stayed two nights which was enough.

Would we return? - probably not but try a different hotel down the road. If we did return we would only stay in a suite and know what to expect. We'd probably fax our booking or use an agent.

Possibly quite good for groups of older golfers or for a company conference (as long as they didn't want any local action) as they have lots of twin rooms in an annex which looks a bit like a 60's style college, and a fairly large meeting room.