Buying a Hotel in Andorra: Essential Checklist

Published on and written by Cyril Jarnias

Investing in a Hotel in Andorra: An Exciting Opportunity

Investing in hospitality can be an exciting venture, especially in a country as attractive as Andorra. Nestled in the heart of the Pyrenees, this small state offers not only exceptional natural surroundings but also interesting business opportunities thanks to its rapidly expanding tourism sector.

Whether you’re a new investor or an experienced hotelier, it’s crucial to know the essential steps to successfully complete your acquisition.

Complete Checklist for Buying a Hotel in Andorra

This article aims to provide you with a complete checklist for buying a hotel in Andorra, covering topics such as:

  • Specific real estate regulations
  • Suitable financing
  • The essential market analysis to conduct

Dive into this detailed guide with us to optimize your hotel investment project in this promising region.

Overview of Andorra’s Hotel Market

Summary of current trends in Andorra’s hotel market:

Andorra’s hotel market is experiencing positive momentum, driven by record tourist numbers. The 2023-2024 winter season recorded over 616,000 visitors (+12% year-over-year), and projections for the following season are even higher. This growth is explained by the diversification of offerings (sports, wellness, high-end shopping) and consistent investments in infrastructure and customer experience.

Key Factors Influencing Supply and Demand:

  • Diversification of tourist offerings (ski, spa, international events)
  • Investments in luxury and wellness
  • Modernization of hotel and ski infrastructure
  • Evolution of traveler behavior (demand for personalized and sustainable experiences)
  • Increased sensitivity to environmental issues (sustainability as an expected standard)

Specific Local Market Characteristics Relevant to Investors:

CharacteristicDetail
Tax AttractivenessFavorable tax regime for foreign investors
Client BaseInternational tourists with high purchasing power; significant presence of cross-border visitors
SeasonalityStrong concentration in winter but increasing diversification toward year-round tourism
Fragmented MarketVaried offerings ranging from budget hotels to ultra-luxury establishments
InnovationsIncreased integration of hotel technologies & digitalization

Recent Economic Performance of the Tourism Sector:

  • Steady Growth: Significant increase in visitor numbers in recent years.
  • Post-Pandemic Boost: The post-Covid rebound has energized all tourism-related segments (hotels, leisure).
  • Sustainable Development: National strategy focused on environmental sustainability in all new offerings.

Consequences for the Hotel Sector:
Sustained demand leads to high occupancy rates in flagship hotels as well as a gradual upscaling toward more premium services.

Opportunities for Investors:

  • Notable tax advantages
  • Growing demand for high-end/experiential accommodations
  • Public support for sustainable development & modernization
  • Economic diversification opening up new segments

Challenges Faced by Investors:

  • Structural dependence on international tourism ⇒ vulnerability to external crises
  • International pressures regarding Andorra’s tax status that could affect its future competitiveness
  • Demographic aging likely to influence certain tourism habits

Summary List – Opportunities vs Challenges:

Opportunities:
– Attractive taxation
– Stable growth
– Market oriented toward innovation/luxury

Challenges:
– Risk related to tourism dependence
– Possible regulatory adaptation under external pressure

Local Regulations: Authorities encourage innovation while gradually strengthening certain environmental standards; it’s therefore advisable to integrate these requirements from the outset in hotel projects.

Expected Key Trends:

  1. Emphasis on sustainability
  2. Personalized customer experience through digitalization/technology investments
  3. Premium positioning attracting demanding international clientele

Andorra’s hotel market thus stands out for its current dynamism and its rapid ability to adapt to global developments—bringing forth both opportunities and some structural challenges.

Good to Know:

Andorra’s hotel market shows positive trends with sustained tourism growth, particularly thanks to ski and shopping activities that attract a wide range of international visitors. Factors influencing supply include limited availability of buildable land and strict environmental regulations, while demand is stimulated by strengthened tourism infrastructure and policies promoting sustainable tourism. Recent economic performance shows an increase in tourism revenue, directly impacting rising hotel occupancy rates. Investors face challenges such as seasonality, but opportunities prove significant, with forecasted continuous growth in the sector supported by expansion projects. Local regulations impose strict requirements for hotel acquisition and development, but attractive tax benefits make these investments potentially lucrative.

Checklist for Buying a Hotel in Andorra

Essential Steps for Purchasing a Hotel in Andorra:

  1. Verification of Authorizations and Legal Conditions
    • Obtaining government authorization for foreign investment is essential for non-residents.
    • Provide a clean criminal record (with apostille), passport, civil status certificate and necessary original contracts.
    • Ensure compliance with local hotel property laws.
  2. Location and Size Assessment
    • Analyze the neighborhood, accessibility, tourism potential and competition.
    • Determine if the built surface area aligns with business objectives (number of rooms, common areas).
  3. Financial Analysis

    To plan during the process:

    • Establish the purchase budget including notary fees, taxes and real estate commissions.
    • Estimate foreseeable operating costs: staff salaries, infrastructure maintenance, energy expenses and marketing.
    Budget ItemExampleComment
    Purchase Price€350,000 min.Minimum contribution required
    Notary FeesvariableTo calculate per transaction
    Annual Operating Coststo estimateDepending on hotel size/standard
  4. Audit of Existing Facilities
    • Check the structural condition of the building (roof, foundations).
    • Inspect electrical/plumbing systems, security/fire/ventilation/smoke extraction systems.
    • Verify compliance with current health/hotel standards.
  5. Consultation of Local Hospitality Regulations

    Not to be overlooked:

    • Examine specific rules related to hotel management in Andorra (operating licenses).
    • Familiarize yourself with tax obligations applicable to the tourism sector.
  6. Support from Local Experts

    Highly recommended:

    • Collaborate with a real estate agent specialized in commercial/hotel properties for an objective analysis of the Andorran market.
    • Engage a local lawyer to secure each legal step of the process (authentic contracts before a notary).
    • Consult an accountant or tax specialist on financial/tax implications.
  7. Definition of an Operational Strategy Adapted to the Andorran Market
    • Study the typical profile of local/international tourist clientele
    • Position your offering: standard/services offered/pricing
    • Plan an active commercial policy: partnerships with local tourism agencies/digitalization/online booking

Practical summary in list form:

  • Verify necessary legal authorizations
  • Choose strategic location suited to your project
  • Calculate total acquisition budget + recurring costs
  • Audit technical infrastructure & existing facilities
  • Consult local regulations specific to the hotel sector
  • Systematically surround yourself with qualified local experts
  • Develop a commercial strategy adapted to the Andorran context

Good to Know:

When buying a hotel in Andorra, start by verifying the necessary authorizations to own hotel property in this particular country, taking into account ownership rules for foreigners. Carefully evaluate the hotel’s location and size to ensure it meets the needs of the target market. Financially, establish a clear purchase budget including foreseeable operating costs, and don’t forget to conduct an audit of existing facilities and infrastructure to assess potential renovations. Consult local hospitality regulations to avoid surprises and consider engaging local experts, such as specialized real estate agents or lawyers, to secure the purchase. Finally, develop a customized operational and commercial strategy for the Andorran market, taking into account the region’s cultural and tourism specificities, to maximize your investment’s profitability.

Key Points of Hotel Due Diligence

Financial Review

  • In-depth analysis of key financial statements:
  • Balance Sheet: Identification of assets, liabilities and equity. Verification of financial structure and debt level.
  • Income Statement: Study of revenues, operational expenses, gross and net margins. Identification of growth or decline trends.
  • Cash Flow Statements: Assessment of ability to generate operational cash flow, analysis of investment and financing flows.
  • Detailed verification:
  • Existence and amount of bank or supplier debts
  • Potential unrecorded liabilities (ongoing disputes, guarantees given)
  • Consistency between different accounting documents
  • Verification of compliance with local tax obligations (VAT, corporate tax), absence of significant arrears

Physical Asset Evaluation

  • Complete technical inspection:
  • Buildings (general condition, wear and tear)
  • Rooms and common areas (comfort, fire safety)
  • Technical equipment (heating/air conditioning, elevators)
  • Verification:
  • Compliance with Andorran safety standards
  • Regular maintenance records/documentary evidence for each major equipment

Legal Analysis

Points to VerifyAndorran Specificities
Titles & notarial deedsComplete or partial absence of a public land registry
Real charges on the propertyMortgages/easements not always declared in the cadastre
Hotel licenses & permitsMandatory for legal operation
Current contractsCommercial lease/suppliers/staff
Potential disputesResearch in notarial deeds/local law firms

It’s crucial to examine all legal documents because the Andorran cadastre doesn’t guarantee completeness regarding real charges.

Operational Audit

  • Detailed review of daily operations:
  • HR management: existing employee contracts; local social compliance; social climate
  • Historical occupancy rates by customer segment/room type
  • Quality/flexibility of organizational management in events/restaurant/spa/etc.
  • Documented internal procedures
  • IT/hotel systems used
  • Customer satisfaction / review management

Market Study

To properly position the hotel in the Andorran market:

  • Comparative analysis with local competitor hotels (average prices per night/service level/differentiating offerings)
  • Occupancy rate projections according to Andorra’s specific tourist seasonality
  • Consideration of national/regional tourism macroeconomic trends

Key points evaluated:

  • Annual/monthly tourist demand
  • Predominant customer segments (winter sports/shopping/conferences…)

Environmental Assessment

Essential verifications:

  • Compliance with local standards regarding wastewater/gas/pollutant emissions
  • Waste management system adapted to municipal requirements
  • Energy efficiency of buildings/facilities – existence of environmental labels
  • Natural risks specific to Andorra’s mountainous territory

Checklist:

  • Presence of energy/water saving devices
  • Audit of building thermal/acoustic insulation

Risks and Insurance

Essential points:

  1. Comprehensive inventory of existing insurance policies: professional multi-risk; operational liability/decennial building insurance; business interruption…
  2. Adequacy of coverage vs specific risks related to hospitality in Andorra:
  3. Particular climate/mountain risks
  4. Protection against losses related to administrative closure/major incidents
  5. Analysis of past claims/compensation documentation

The success of hotel due diligence in Andorra relies on a multidisciplinary approach systematically integrating all local legal specificities as well as the unique national tourism context.

Good to Know:

Due diligence for purchasing a hotel in Andorra begins with rigorous financial examination, involving analysis of balance sheets, cash flows, and meticulous evaluation of liabilities and revenue trends; it’s crucial to identify existing debts. Physical asset evaluation requires thorough inspection of infrastructure and equipment, ensuring they meet safety standards. Legal analysis should include verification of property titles, licenses, permits, current contracts, as well as research into potential disputes. An operational audit is essential to understand daily management, staff management, and occupancy levels. Market study should focus on competitor assessment, occupancy projections and local tourism trends. It’s also important to consider local environmental standards, including waste management and energy efficiency. Finally, carefully examine existing insurance policies and identify Andorra-specific risks, thus ensuring the hotel is properly covered and compliant with legislation.

Andorra Tourism Statistics and Trends

Andorra Tourism Statistics and Trends

YearNumber of VisitorsAnnual Growth
2022~8.1 million
20239.2 to 9.3 million+13% to +24%
  • Tourist numbers reached a historic record in 2023 with over 9 million visitors, marking significant growth compared to previous years.
  • Average stay duration is increasing strongly and the proportion of day-trippers (visitors without overnight stays) dropped from 69% to 43%, reflecting growing interest in longer and more in-depth experiences.

Most Frequent Visitor Nationalities

  • Tourists mainly come from France and Spain, particularly enjoying tax-free shopping.
  • There’s also a notable increase (24%) in visitors from more distant markets (beyond immediate neighbors).

Most Popular Tourist Seasons

  • Winter: Skiing in resorts like Grandvalira or Vallnord (over 300 km of slopes) attracts European clientele.
  • Summer: Hiking, cycling, spas and nature discovery are among the flagship activities.

Major Activities and Attractions

List of popular activities:

  • Winter sports: alpine skiing, snowboarding
  • Tax-free shopping
  • Mountain hiking
  • Road cycling or mountain biking
  • Spas & wellness
  • Natural parks

Summary table:

Activity TypePopularity
Ski/winter sportsVery high
ShoppingHigh
Nature/hikingStrong
Wellness/spaGrowing

Emerging Trends in Andorran Tourism

  • Emphasis on sustainable tourism, with ecological initiatives led by the state and private actors.

Ecotourism is becoming central: enhancement of natural heritage, development of offerings oriented toward “mindfulness”, health or specialized events.

  • Growing impact of digital: targeted digital marketing toward international markets through strategic partnerships (e.g. National Geographic), mobile platforms for booking/personalized experiences.

Diversification toward high-end: luxury experiences around sports, exclusive wellness, shopping festivals (“Shop in Andorra Festival”).

Government Policies & Recent Incentives

  • Increased liberalization of foreign investment since the financial crisis to stimulate hotel supply.

Public support for sustainable renewal of tourism infrastructure: subsidies for green renovation/eco-certified hotels.

Active strategy to limit overtourism while increasing overall quality; reflection on maximum capacity adapted to the territory (“tourist load”).

Specific incentives:

  • Strengthened international partnerships for global visibility;
  • Continuous development of high-end facilities;
  • Tax incentives for environmentally respectful hotel innovation.

Hotel Investment Opportunity Analysis

The evolution toward qualitative tourism—extended stays, diversified international clientele—creates increased demand for premium accommodations. Public policies favor this transformation through tax incentives and support for sustainable projects. The rapid rise of digital marketing allows new entrants as well as established groups to increase their visibility with targeted segments (ecotourists, luxury enthusiasts). Finally:

  • Strong expected increase in annual occupancy rate;
  • Growing need for differentiated offerings oriented toward nature/wellness/luxury;
  • Limited risk related to overtourism thanks to proactive regulation;
  • Potential added value through ecological certifications or international event partnerships;

Andorra’s hotel sector thus positions itself as particularly attractive for investors betting on environmental innovation & upscaling combined.

Good to Know:

In 2022, Andorra welcomed nearly 8 million visitors, mainly from France and Spain, attracted by winter sports and tax-free shopping. Winter and summer are the most popular tourist seasons, with ski activities and hiking in the Pyrenees. Ecotourism is experiencing notable growth, stimulating demand for more sustainable accommodations. Additionally, the increasing use of technology for tourism marketing facilitates access to a global audience. The Andorran government is introducing tax incentives to encourage investment in eco-friendly hospitality, thus aligning investment opportunities with growing demand for eco-responsible stays. These trends favor diversification of accommodation offerings, strengthening Andorra’s appeal as a destination of choice for hoteliers wanting to meet modern travelers’ new expectations.

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About the author
Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

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