Buying a hotel in Spain: a buyer’s decision guide

Choose an investable hotel, not just an attractive building

Start by deciding what the acquisition must deliver: freehold real estate, income from an existing hotel operation, a redevelopment opportunity, or a property to lease to an operator. These are different investments even when the same building appears in an advertisement. Establish a ceiling for purchase price, refurbishment, transaction taxes, working capital and initial operating losses. Treat advertised room count, star rating, trading yield and “licence included” as statements to verify, not facts to underwrite. A hotel’s present operation does not itself establish that a new owner may run the identical business without further formalities.

Screen properties against the intended operating model before spending on lawyers or surveys: location and access, demand outside peak season, usable rooms rather than merely advertised keys, permitted extensions, accessibility, fire safety, air conditioning, lifts, kitchens, water systems and deferred maintenance. Ask for the exact property identifier, operating entity, proposed transaction form, existing operator and last three completed financial years. An owner-operated 20-room rural hotel and an urban hotel bound to a brand can have similar marketing prices but different staffing, capital requirements, seasonality and exit risk. No current stock or individual sale price is verified here. A coastal resort dependent on summer leisure nights, an urban business hotel dependent on weekday corporate guests, and a rural destination hotel dependent on weekend bookings should not be ranked by annual occupancy alone. Compare monthly room-night demand, staffing needed for each service, competing room supply and transport access; reject candidates that cannot support the intended opening season and staffing plan.

Define exactly what is being acquired

The first negotiating question is what legally changes hands. A freehold property can be owned by one company while another runs the hotel, and a third may hold a lease, management or franchise agreement. Ask the seller for a simple diagram naming the property owner, hotel operator, employer, licence holder, booking-channel accounts and any brand or management counterparty. Match every proposed asset and contract to the draft agreement. A price for “the hotel” is meaningless until fixtures, stock, website, brand rights, bookings, deposits, debt and employees have been allocated.

Do not assume buying a building transfers the operating company, or that buying shares automatically gives unencumbered real estate. In an asset/business transfer, define included and excluded contracts, taxes and liabilities; in a share deal, liabilities generally remain inside the acquired entity. Spanish company-law formalities may apply: under article 106 of the Companies Act, transfers of Spanish limited-company shares must be recorded in a public document; transfer restrictions can also matter. A lease-based hotel requires confirmation of remaining term, permitted activity, landlord rights and change-of-control or assignment clauses before valuing goodwill. For a non-residential business lease governed by Spain’s Urban Leases Act, articles 4(3) and 32 make the actual contract decisive: absent a different valid agreement, assignment may not require landlord consent, but reliable notification within one month and a potential 20% rent increase on assignment apply. Do not extend that default to every lease or overlook its date and terms.

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Verify the land, building and physical condition

Obtain a current nota simple for every relevant registered property to identify registered owner, property description and recorded charges; the Spanish Registrars explain that a nota simple is informative rather than a certification with public evidentiary force. Compare registry data with Cadastre, approved plans, building permits, actual measurements, occupancy/use documentation and municipal planning records. A registered hotel building is not by itself proof that every altered room, roof terrace, extension or change of use is authorised. Investigate missing plots, encroachments, mortgages, easements, liens, ground leases and ownership splits before agreeing a price.

Commission an independent technical survey covering structure, building services, fire compartmentation, access, accessibility, kitchens, pools where relevant, energy systems, water treatment and life-safety equipment. Request maintenance logs, statutory inspection reports, insurance claims, contractor warranties and a room-by-room capital-works schedule. Separate immediate safety or permission-critical repairs from cosmetic upgrades, then cost both with contingency and an opening timetable. If seller access is restricted, record assumptions as unverified and make acceptable inspection outcomes an express condition; neither a sales brochure nor an attractive site visit replaces building-level evidence.

Check the right to operate at this exact address

Hotel classification, tourism registration and operating notifications are not a single transferable national licence. The autonomous community’s rules and the municipality’s planning, activity, fire and building requirements must be checked for the precise address and operator. As one illustration—not a Spain-wide shortcut—Andalusia’s Tourism Law uses a responsible declaration framework and tourism register, with consequences where essential statements or urban-planning compliance are false. Ask the competent authority or local adviser which notification, change-of-holder filing, inspections or fresh permission is required for the contemplated ownership and operating change.

Request the hotel’s tourism register record, its declared category and capacity, municipal activity/use files, opening documentation, fire and accessibility records, inspection history, sanctions and pending proceedings. Verify whether catering, spa, events, outdoor terraces, pools and advertised additional rooms are separately authorised. Check whether a proposed repositioning or enlargement requires planning consent before calculating higher future revenue. A transaction should not be unconditional where the key operating use cannot be demonstrated, material noncompliance cannot be cured economically, or the seller cannot evidence its legal authority to transfer the rights proposed.

Rebuild the trading case from evidence

Reconstruct at least three completed years of monthly room nights available and sold, average daily rate (ADR), revenue per available room (RevPAR), cancellation and channel mix, food-and-beverage receipts, payroll, commissions, utilities and repairs. Reconcile management reports to accounting records, bank movements and applicable tax filings; distinguish revenue excluding indirect tax from guest cash receipts. The INE publishes hotel occupancy and revenue indicators, but national or regional figures are context, not valuations of a specific property. Its August 2026 provisional series reported EUR 166.90 in average revenue per occupied room across its reported hotel population, not a transaction price or forecast for your target.

Normalize earnings by removing documented one-off items and replacing owner labour, related-party rent or management fees with realistic market costs. Model at least a base and downside case: lower off-season occupancy, wage inflation, repairs, commissioning delay, financing interest and replacement reserve. Show whether net operating cash covers debt service and planned capital expenditure, rather than treating gross room revenue as yield. If the hotel has been closed or has only forecasts, analyse a start-up with proof of demand and reopening cost—not a seasoned cash-flow acquisition. Do not capitalize an unverified seller projection as if it were audited income. As an illustrative sensitivity test, assume 40 legally usable rooms, 365 operating days, 55% occupancy and €120 ADR excluding indirect tax: annual room revenue would be €963,600 before payroll, commissions and repairs. With occupancy of 45% on the same assumptions, it would be €788,400: €175,200 less revenue, not necessarily €175,200 less profit because some costs vary with occupancy. These hypothetical figures are not Spanish market benchmarks or a forecast for any hotel.

Check operator, staff and guest obligations

Read every hotel management, franchise, brand, distribution, laundry, maintenance, IT, merchant-acquiring and supplier contract. Identify minimum term, performance tests, termination fees, step-in rights, renovation standards, exclusivity and assignment or change-of-control consent. An international brand may improve distribution while imposing capital upgrades and recurring fees; an independent property may offer flexibility but require marketing capability. Ask for written consents or legally effective release mechanisms where transaction completion depends on them. Budget the cost of replacing booking systems and digital accounts if they cannot be transferred.

Employees and advance bookings are part of the risk, not an afterthought. Article 44 of Spain’s Workers’ Statute can apply when an economic entity retaining its identity changes hands: employment and certain labour/social-security obligations may transfer, with statutory joint-liability rules; merely labelling a deal an “asset sale” does not settle the issue. Reconcile employee rosters, contracts, collective agreements, holiday balances, overtime, pensions and disputed claims with payroll and social-security records. Separately map guest deposits, future reservations, gift vouchers, OTA balances, supplier prepayments and data-protection obligations to the closing accounts and handover plan.

Model taxes, finance and total cash required

Obtain a transaction-specific Spanish tax memorandum before bidding on a net price. Property transfer, corporate-share acquisition and transfer of an autonomous operating business may produce different indirect-tax results. Article 7(1) of the VAT Law excludes qualifying transfers of an autonomous economic unit from VAT, but mere transfers of assets or rights do not automatically qualify. Existing-building sales may involve VAT exemption and, in defined circumstances, a waiver, with transfer tax and stamp duty consequences to assess. Rates, taxable value, recoverability and who pays depend on structure, property and autonomous community; no generic hotel acquisition tax percentage is safe.

In the funds schedule include price, conditional deposit, notary and registry costs, legal/tax/technical work, VAT or transfer and stamp taxes where applicable, financing fees, lender covenants, insurances, working capital and capex. State any currency conversion exchange-rate source, reference date, payer and bank charges if funding is converted or paid across borders; do not assume advertised EUR proceeds equal the amount received by the seller. Check capital gains or other seller-side allocations only when contractually relevant. Compare all-in equity needed and stressed returns across candidates, not room count or headline price per key alone.

Negotiate a controlled transaction and handover

Use a staged process: obtain a nonbinding information pack, execute a confidentiality arrangement if needed, submit an indicative offer expressly subject to due diligence and approvals, then review a negotiated exclusivity or reservation arrangement. Before a material non-refundable deposit, define the buyer entity, deal perimeter, document-access rights, diligence deadline, seller warranties, permitted exits, debt release, operator consents and tax allocation. A unilateral “reservation fee” without clear return conditions can become an expensive substitute for proper diligence. For each milestone identify who must deliver what evidence and when.

Differentiate document review, remote video inspection, signing, settlement, registration and operational handover. Some preparatory steps may be handled through representatives, but identity verification, notarial requirements, lender conditions, original powers of attorney and local execution practice must be confirmed for the exact structure; never assume a wholly remote completion is available. At closing reconcile stock, cash, customer deposits, accounts, keys, systems, utilities, employment information and licence notifications. Release funds only against agreed conditions and independently verified payment instructions, with debt discharge and post-closing filings allocated.

Decide: investigate, reprice or walk away

Proceed to full diligence only when the seller identifies the land/building owner, operator, transaction perimeter, authority to trade and underlying financial records; a conditional offer is not approval to buy. Reprice if verified repairs, seasonality, operator fees or financing costs change the sustainable return and the seller accepts a defensible adjustment. Pause where documents are missing but obtainable within a fixed period. Stop if the intended hotel use is not demonstrably lawful, material liabilities cannot be bounded, essential contracts cannot survive or exit economically, or the seller refuses independent verification.

The practical next step is a two-page investment brief for each candidate: intended use and location, acquisition form, property identifiers, usable key count, three-year trading bridge, permits, operator obligations, capex, taxes and sources of funds. Attach a red/amber/green evidence register with named owners and completion conditions. Commission a Spanish property lawyer, hotel-sector tax adviser, accountant and independent building surveyor once this initial screen identifies a plausible target. Their advice must be specific to the municipality, autonomous community, contracts, buyer and date; this guide is a decision framework, not an individual legal or investment opinion.