"This is a responsible and necessary decision. We are not revoking licenses that have already been granted, nor are we eliminating local accommodation. We are, rather, ensuring that this activity develops in a balanced and regulated manner," said Cristina Pedra, an independent elected by the right-wing coalition, at a press conference in Funchal.

The mayor assured that this suspension is “temporary, preventative, and proportional” to “curb the growing trend of local lodging registrations.”

The measure should remain in effect until the completion of the municipal regulations for this sector, which are currently being mapped and developed. Its implementation is expected only in the next term, due to legal deadlines and the necessary time, according to information released by the Funchal municipality.

The mayor noted that the suspension will take effect in September, targets exclusively new licensing requests, does not affect legally established activities or remove acquired rights, and excludes requests for houses and rooms within this type of property.

All requests currently in process will be analysed and responded to.

Cristina Pedra pointed to the completion of the preliminary study on this matter in December, mentioning that this year there are 3,184 local lodging registrations in the municipality of Funchal.

The sector, she said, represents approximately 9,000 beds and 6,000 rooms, with a capacity to accommodate 15,000 guests.

“Between 2022 and 2025, there was a 182% increase in the number of registrations, reflecting a strong and continued demand,” he stated, emphasizing that “the supply of beds in residential care already represents more than 25% of Funchal's hotel capacity, which is already limited by it.”

According to the municipality, the suspension of new licensing “represents another step in curbing this trend, until future municipal regulations clearly define the areas of Funchal that may continue to accommodate new residential care units and those that should be subject to containment.”

The measure will be re-evaluated at the end of the six-month period and may be brought forward if the regulations are finalized before the scheduled deadline.

“Each area has its own specific circumstances. There are saturated areas and others that still benefit from AL, particularly in terms of urban redevelopment, tourism, and the local economy,” the mayor mentioned.

The decision comes after the licensing of units for local accommodation in an apartment block built with public funding was announced, with the mayor stating that the Funchal City Council “has no responsibility in this matter in a private housing cooperative.”

Cristina Pedra added that the case is the subject of an investigation, which is expected to be concluded within two weeks. The city intends to hold accountable those who affected the apartments in this housing development, built at controlled costs for AL rent.