On Madeira, we took our third inn-to-inn hiking trip in as many years. The tour operator supplies maps, directions, lodging, breakfast and dinner, and moves our luggage when we change hotels. Several companies offer a Madeira package.
The travel industry is a shape-shifting landscape. If you make this choice, ask who is really responsible for the local arrangements.We planned to use a tour company we'd used before. We were told, though, that the Madeira trip was now offered by another American packager instead. So we booked through that outfit, which is really only a pass-through marketer for a British company that has recently been sold to a German firm that handed us off to a Madeira-based operator. We would have saved money just using the real guys, the Madeirans, to begin with.
There were distracting glitches — nothing calamitous — which surprised us after our prior trouble-free trips. The person at the "24-hour emergency number" was actually on vacation, for example. There were mix-ups about the hotel bookings. The Madeiran personnel who cleared things up were uniformly genial and conscientious, and English is spoken widely.
Ask your prospective inn-to-inn hiking planner for references you can talk with by phone — people who have used the same tour operator for the same trip in the past year. You'll want to know how well the transfers were handled, the quality of the hotels and meals and, crucially, that the point-by-point hiking instructions were perfect, or nearly so.
If you have time to do your own planning instead, I suggest these guidebooks for hiking the levadas (only some of them are safe routes). "Madeira Walks," by Shirley and Mike Whitehead, offers lots of nature lore and has a nice map. The e-book "Landscapes of Madeira," by John and Pat Underwood, is the seminal introduction to levada walking.
The hotels you choose can routinely arrange for luggage transfers. Many of them know the trailheads and pickup locations quite well. Madeira has surprisingly good cellphone service, and many hotels can easily get you to and from the hikes by cab. Happy trails!