A more budget-friendly alternative would be Residencial O Farol, which is 3-star accommodation with room rates from 71US$. In case you're on a tight budget, stay at Quinta Das Vinhas, which is a 10-minute walk from Presepio do Ribeirinho.
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If you're looking for a homey place to stay, consider Casa Pita - Vintage Family Apartment B&B apartment, situated beside Cemiterio da Calheta. Top business hotels in Calheta (Madeira) include Hotel Jardim Do Mar and Inn & Art Casa De Cha Dos Prazeres. For travelers who love diving, kayaking and beach volleyball, pick Calheta Beach near Cais da Ponta do Sol, a resort that offers scenic views of the sea.