First-time buyers Peter Howard and Trish Taylor from Cornwall have snapped up the four diamond-rated St Michael's hotel in Torquay.
The detached Victorian villa commands views over the town to Torbay and is walking distance from the beach and the town amenities.
It offers six en-suite bedrooms and a seventh with a private bath, along with a residents' dining room and one-bedroom owners' accommodation.
The Bristol office of Forum Business Sales achieved the asking price of £400,000 for the hotel on behalf of Michael Brown and his wife.
By Angela Frewin