We booked this direct with Pestana and stayed for 8 nights. The short version is, I wouldn't go back.
The hotel itself is quite nice. The gardens and pool pleasant, view across the bay wonderful. I found the staff mostly professional, but many were unhelpful in an ignorant way. We only ever had breakfast, which was a blessing, meal times were a shambles with a fight over clear tables. I constantly had to request top ups of fruit and pastries at the buffet. Coffee was good if you ordered it from behind the bar, the other stuff was mud.
Guests are mostly old people on package tours, British or European. So it's kinda sedentary. Rooms are ok, but walls a bit thin. Pray you don't get a room next to the lift!
Beyond the hotel grounds the beach is a complete no go zone unless you want a broken ankle. The boulders would bring a health and safety inspector out in a cold sweat. As would the path (promenade) made of pallets wired together. That leads to a wet and muddy tunnel going through the rock, which is quite exciting but plays havoc with posh shoes! Take care with the tunnel - they lock it at night. Much to my fury I established this one late evening, and meant walking about three hazardous miles to the main entrance of the hotel. The staff were entirely indifferent when I asked why they hadn't bothered telling us this would happen. Grrrr!! lol, I'm still angry now :o)
The walk to Funchal is quite a challenge - there are lots of steep bits, but plenty of cafes and restaurants. It's a curious mixture of lovely cliffs, pleasant sunshine and cranes shifting things about.

We (4 adults) have just come back from a week at Pestana Gardens ( or Atlantic Gardens as it was once know). we had a lovely time in this quiet part of town. If you what to be in the hustle and bustle of Funcal this is not the place for you. But if you want a quiet place to stay within striking distance of the main town then fine. There is a courtesy bus going to and from the town ( offically only for the hotel guests next door but we used it ) or service buses a nd taxis fairly resonable. the old oil refinery has been knocked down and is due to be redeveloped as a Park, 2 hotels and a car park in the near future.
To get up to the main road the is a steep climb up steps and slopes or you can rent a key for 1 euro a day for a lift that takes you most of the way.
The stoney beach is right out side the gardens, but is NOT good for swimming (yellow flag ) unless you are a VERY good swimmer, definately a no go for children.
2 good bars and restuarants within 100m or the hotel next door. the supermarket is a bit of a trek away, but on the main road is a fruit and veg shop and somewhere to get bread and cakes.
The reception staff are very helpful and knowlegeable
I would go again if only to wake up to the sound of the waves so close.

Hotel was in a good location - as close to the sea as it gets!
Stayed in penthouse room, and had 3 king size rooms, 2 baths, and our own sun roof as well as large balcony - the space was phenominal.. Hotel was clean and quiet, just what we needed to enjoy the fantastic weather. Used shuttle bus into Funchal and got taxi back - only 8 euros- but most nights walked to pizza place through tunnel, about 15 minute walk.
Room was cleaned daily with bed linen change mid-week. Staff were on the whole freindly. Only complaint was one receptionist was ignorant and rude on a couple of occasions.
Would definitely consider going back.

Before you book this hotel be warned of the following facts:
There is no beach, just a moon-scape of boulders and, when we were there, a JCB boulder bashing.
The "village setting" includes a disused oil refinery. Nice!
There is no restaurant which must be a first for a 4 star hotel.
The room was a pokey airless hole. My heavily pregnant wife had to sleep on a camp bed.
To say there was nothing to do would be an understatement. By day 3 we were spending our time watching TV cartoons in Portugese.
When we complained we were told basically 'tough luck'. We endured this dump for 7 days and could not wait to get home.
If you still go ahead and book this hotel be aware we were only offered £120 pound compensation for our troubles (5% of our costs!) My advise: Don't go near it.