Funchal Halts New Local Accommodation Licenses for 6 Months to Revise Regulations

The Funchal City Council will stop issuing new licenses for Local Accommodation (AL) in the municipality for six months, as announced by the mayor, Cristina Pedra, on Thursday, August 7. The decision stems from the need to review the current regulations and alleviate pressure in certain areas.

During a last-minute press conference, the mayor revealed that the measure will be approved in the next City Council meeting and the Municipal Assembly plenary in September.

The suspension, effective only after approval in September, applies solely to license requests for AL in collective housing buildings. The Funchal Municipality will continue to license AL in villas and rooms.

As reported by DIÁRIO, the Funchal City Council intends to propose a revision of the AL regulations to impose limitations in specific zones.

This decision comes two weeks after the 'Confiança' coalition, the opposition in the Funchal City Council, disclosed the existence of AL in units of the controlled-cost housing development 'Residências CORTEL I'.

Last week, the Funchal City Council rejected the 'Confiança' proposal to immediately revoke AL licenses in 'Residências CORTEL I', citing it as "a null and illegal act for not respecting the right to prior hearing of the interested parties." The municipality stated that an investigation process is underway.

Today, Cristina Pedra mentioned that the case is under investigation, expected to conclude within two weeks, ensuring that the municipality will hold those responsible accountable for converting controlled-cost housing units into AL.

The mayor also took the opportunity to condemn the misuse of permanent housing developments for commercial purposes.

According to the National Register of Local Accommodation Establishments, Funchal has a total of 3,184 such establishments. Pedra pointed out that this number represents about 9,000 beds and 6,000 rooms, with the capacity to host 15,000 guests.

"Between 2022 and 2025, there was a 182% growth in the number of registrations, reflecting a sharp and continuous demand," she said, highlighting that AL bed offerings already exceed 25% of Funchal's hotel capacity, which is itself limited.