Investment Proposal: Hotel «La Grotta» in San Marino
We present an exclusive opportunity to acquire a highly profitable hotel
«La Grotta» https://www.lagrottahotelsanmarino.com/ (3* Superior), located in the historic center of the Republic of San Marino – a UNESCO World Heritage site. This boutique hotel demonstrates stable revenue growth and high profitability due to its unique location, impeccable reputation, and professional management. Fully renovated in 2013 and expanded in 2017, the hotel requires no additional capital investment and represents a turnkey business with a clear potential for increased profitability.
Investment Offering Overview
Ready-made hotel business with proven profitability of 30% and potential for rapid optimization
Hotel «La Grotta» represents an exceptional investment opportunity for those seeking a stable business with excellent growth prospects. Located in the pedestrian zone of the historic center of San Marino, the hotel attracts a year-round flow of tourists from all over the world, ensuring stable occupancy and a high average check.
€3,5M
Asking Price
Negotiable, flexible deal terms
€565K
Revenue 2023
Steady growth since 2022 (€515K)
30%
Profit Margin
Healthy indicator for the industry
9.0
Booking.com Rating
High reputation and customer loyalty
This offer is suitable for investors seeking a stable cash flow with high returns, as well as private buyers wishing to acquire a ready-made business with the possibility of personal involvement in management. The current owners – a family company with many years of experience in the hotel business – are ready to ensure a smooth transition period and share all aspects of running the business.
Uniqueness of the Location
The Republic of San Marino is one of the most unique tourist destinations in Europe. It is the oldest republic in the world, founded in 301 A.D., with a fully preserved medieval historic center that is included in the UNESCO World Heritage list. Annually, San Marino is visited by over 2 million tourists, attracted by its rich history, tax benefits for shopping, and breathtaking views from Mount Titano.
Advantages of the hotel's location:
  • Located in the heart of the historic quarter, in a pedestrian zone
  • 150 meters from the main square, Piazza della Libertà
  • Near major attractions: Basilica of San Marino, Palazzo Pubblico, Three Towers
  • Easy accessibility: just 30 minutes from Rimini International Airport
  • Proximity to popular Italian resorts on the Adriatic coast
«The location in the historic center of San Marino is not just an advantage – it is a strategic asset that cannot be replicated»
The hotel is located on Contrada Santa Croce 17 – one of the central streets of the old city. This location provides guests with easy access to all attractions, restaurants, and shops. At the same time, the hotel maintains an atmosphere of seclusion and comfort, as confirmed by numerous positive guest reviews regarding the peace and quiet in the rooms.
It is precisely the uniqueness of its location that ensures stable demand for hotel accommodation regardless of the season or economic situation, making this business resilient to market fluctuations.
Hotel Description
Key Characteristics:
The hotel occupies a historic building, fully renovated in accordance with modern standards of comfort and safety. The authentic character of the premises has been preserved, including original stone walls and architectural elements, which creates a special atmosphere valued by guests.
Classic Rooms (10)
Cozy rooms spanning 18-20 sq.m. with a double bed or two single beds. Equipped with everything necessary for a comfortable stay, including air conditioning, Wi-Fi, TV, mini-bar, and safe.
Family Rooms (4)
Spacious rooms spanning 25-28 sq.m., ideal for families with children. Includes a double bed and an additional sleeping space. Equipped with extended amenities for comfortable family living.
Superior Rooms (6)
Premium rooms spanning 22-24 sq.m. with enhanced finishes and additional amenities. Most offer magnificent views of the historic center or surroundings. Some rooms are equipped with a Jacuzzi.
It is important to note that during the renovation, provisions were made in the rooms for the installation of mini-kitchens, which provides the new owner with additional flexibility: the hotel can be easily converted into an apartment complex if this aligns with a new business strategy.
Financial Performance
€515K
2022 Revenue
Baseline after post-pandemic recovery
€565K
2023 Revenue
9.7% growth compared to previous year
€620K
2024 Forecast
Projected 9.7% growth compared to 2023
€780K
Outstanding Loans
Some loans are state-subsidized
The hotel demonstrates stable growth in key operating indicators. The average annual occupancy of 65% is a good indicator for a boutique hotel and has potential for further growth. The average daily rate (ADR) of approximately €100 aligns with the hotel's positioning in the 3* Superior category and provides a competitive advantage in the segment.
The business margin of 30% exceeds industry averages and allows for significant cash flow generation. The cost structure has been optimized by the current owners, ensuring stable profitability even with fluctuations in tourist traffic.

To receive full financial statements, including a detailed analysis of income and expense structure, as well as audited financial reports for the last 3 years, please sign a confidentiality agreement.
Key Investment Advantages
Unique Location
Located in the pedestrian zone of the historic center, a UNESCO World Heritage site, guaranteeing consistent high demand.
Stable Cash Flow
Consistent revenue growth and healthy margins ensure a reliable return on investment.
Excellent Asset Condition
After a complete renovation, the hotel does not require additional capital investments.
High Reputation
A 9.0 rating on Booking.com attracts a quality audience and helps maintain a high ADR.
Profit Growth Potential
Reducing OTA dependency (80%) through the development of direct sales will significantly increase profitability.
Tax Advantages
Corporate income tax in San Marino is only 17%; there are no property taxes.
Additional Advantages:
  • Flexible Use: Provisions for kitchenettes allow for the hotel to be transformed into an apart-hotel complex.
  • Expansion Opportunity: Option to purchase an adjacent apartment (150 sq.m) to increase room inventory.
  • Year-Round Demand: Due to its location in a tourist center, the hotel experiences minimal seasonal fluctuations in occupancy.
  • Professional Team: Possibility of retaining current staff with hotel experience.
  • Jurisdictional Stability: San Marino is known for its political and economic stability.
  • European Status: San Marino is not part of the EU, but has a customs union with it and uses the Euro as its official currency.
Opportunities for increasing profitability
Analysis of the hotel's current business model has identified several key opportunities for significant business profitability growth in the short and medium term. A new owner can realize these opportunities without significant investment, relying primarily on optimizing operational and marketing processes.
Development of Direct Sales
Current reliance on OTAs (80% of bookings) presents a significant optimization opportunity. Developing a proprietary website and loyalty program can redirect up to 30% of bookings to the direct channel, saving 15-25% in commission fees per booking.
Implementation of Revenue Management
Implementing dynamic pricing and more aggressive revenue management strategies can increase ADR by 10-15% without negatively impacting occupancy. The current pricing strategy is quite conservative.
Expansion of Room Inventory
The option to acquire an adjacent apartment of 150 sq.m will allow for an increase in room inventory by 4-5 rooms, which, while maintaining current occupancy and ADR levels, will lead to a 20-25% increase in revenue.
Additionally, opportunities to expand the hotel's range of services can be considered: organizing excursions around San Marino and its surroundings, providing transfers from Rimini Airport, expanding meal plans to half-board through partnerships with local restaurants. These services can become additional sources of revenue with high profitability.
By implementing all these opportunities, the potential for annual revenue growth is estimated at 40-50% within 2-3 years, with a corresponding increase in business profitability.
San Marino Hotel Real Estate Market
The San Marino hotel real estate market is characterized by high entry barriers and limited supply. The historic center of the republic has strict restrictions on new construction and significant modification of existing buildings, which makes ready-made hotel properties particularly valuable.
The total hotel stock in San Marino comprises fewer than 30 hotels with approximately 1000 rooms. Meanwhile, in the historic center, the most attractive area for tourists, there are only 5-7 hotels, which creates a limited competitive field and sustains high occupancy rates and prices.
Key Market Characteristics:
  • Limited supply with consistently high tourist traffic
  • Absence of large international hotel chains
  • Predominance of small family-run hotels
  • High entry barrier for new players
  • Growing popularity of San Marino as a tourist destination
“The San Marino hotel market is a rare example of a niche protected from excessive competition, where demand consistently exceeds supply”
Tourist flow to San Marino has shown steady growth in recent years (with the exception of the pandemic period), while there has been an increase in the proportion of tourists staying overnight in the republic, rather than visiting it as part of a day trip. This creates additional demand for quality hotel services.
Hotel “La Grotta” holds a favorable position in this market due to its location, service quality, and reputation. In the 3* Superior segment within the historic center, it has a minimal number of direct competitors, allowing it to maintain high occupancy rates and average daily rates.
Tourism Potential of San Marino
The Republic of San Marino, despite its modest size (61 sq. km), is one of the most interesting tourist destinations in Europe. Annually, more than 2 million tourists visit this microstate, which is 60 times the population of the republic (33,000 people).
Key Tourism Factors
  • Rich history: one of the oldest republics in the world, founded in 301 A.D.
  • UNESCO World Heritage Site: historic center with preserved medieval architecture
  • Unique landscape: located on Mount Titano with panoramic views of Italy and the Adriatic Sea
  • Tax advantages: reduced VAT attracts shopping enthusiasts
  • Safety: one of the lowest crime rates in the world
Types of Tourists
  • Cultural and educational tourism: history and architecture enthusiasts
  • Shopping tourism: attracted by tax benefits
  • Event tourism: numerous festivals and historical reenactments
  • Business tourism: a developing segment focused on small conferences and meetings
  • Transit tourism: visitors traveling between Adriatic resorts
It is important to note that the tourist flow in San Marino is relatively evenly distributed throughout the year, with peaks in the summer period and before Christmas. However, even during the low season, the republic attracts a sufficient number of tourists, ensuring stable occupancy for hotels.
In recent years, there has been a growing trend of tourists staying overnight in San Marino, rather than visiting the republic as part of a day trip from Italian coastal resorts. This is facilitated by the development of evening events, gastronomic tourism, and an increase in the quality of hotel infrastructure.
The Government of San Marino actively supports the development of tourism as one of the key economic sectors, investing in the promotion of the republic internationally and improving tourist infrastructure. This creates favorable prospects for further growth in tourist flow and, consequently, the hotel business.
Tax Regime and Legal Aspects
Tax Advantages of San Marino:
17%
Corporate Tax
Significantly lower than in most EU countries
0%
Property Tax
No annual property ownership tax
5%
Property Transfer Tax
Applied when purchasing real estate
San Marino is characterized by a favorable tax regime, which creates additional advantages for doing business. In addition to a low corporate tax rate and no property tax, the republic offers a simplified reporting system for small and medium-sized businesses.
Legal Aspects of Hotel Acquisition:
  • Forms of Acquisition: It is possible to formalize a deal both through the purchase of a legal entity (Share Deal) and through the direct acquisition of real estate and business (Asset Deal).
  • Requirements for Foreign Investors: San Marino does not impose significant restrictions on foreign investors when acquiring commercial real estate and businesses.
  • Licensing: A relevant license is required to operate a hotel business, which can be transferred to a new owner under certain conditions.
  • Labor Legislation: When acquiring an existing business, it is necessary to take into account obligations regarding existing staff.
The Republic of San Marino maintains good relations with Italy and the European Union, although it is not formally an EU member. A customs union agreement with the EU is in effect, and the euro is used as the official currency. This ensures economic stability and integration with European markets while preserving certain sovereign advantages.

To structure the deal, it is recommended to engage a local legal consultant specializing in commercial transactions and the tourism business. Upon request, we can provide contacts of verified specialists.
Property Condition and Technical Information
Hotel «La Grotta» is in excellent technical condition thanks to a comprehensive renovation carried out in 2013, and a subsequent expansion in 2017. The building fully complies with modern safety, energy efficiency, and comfort requirements, while retaining its historical character.
2013: Full Renovation
A comprehensive renovation of the building was carried out, including the replacement of all engineering systems, and updating of the internal layout and finishes. Historical elements such as stone walls, arches, and decorative elements were preserved and restored.
2017: Expansion and Modernization
Acquisition and integration of adjacent property, increasing the room inventory by 6 Superior category rooms. Update of the air conditioning system, installation of modern access control systems.
2020: Interior Refresh
Update of furniture and textiles in all rooms, modernization of the reception area and public spaces. Installation of high-speed Wi-Fi with coverage throughout the hotel.
2022: Technical Maintenance
Routine technical maintenance of all systems, cosmetic repairs of common areas. Update of hotel management software.
Technical Information:
An important advantage is that during the renovation, all necessary communications were provided for the possible installation of kitchenettes in the rooms. This ensures flexibility in the use of the property and the possibility of transforming it into an apart-hotel if needed.
All hotel equipment and engineering systems undergo regular technical maintenance, as confirmed by relevant documentation. The property fully complies with all local legislation requirements for 3* Superior hotel establishments.
Operational Activities and Staff
Current Organizational Structure:
Management (2 people)
  • General Manager
  • Deputy Operations Manager
Reception (3 people)
  • Receptionists
  • Shift work, 24/7 service
Housekeeping (4 people)
  • Maids
  • Maintenance
Breakfast (2 people)
  • Cook
  • Cook's assistant/waiter
The total hotel staff consists of 11 people, including management. Most employees have been with the company for a long time and are well acquainted with the specifics of the hotel's operations. All employees can be retained upon change of ownership.
Key Operational Processes:
  • Bookings: Via OTAs (80%, primarily Booking.com) and direct channels (20%). The Sysdat Turismo hotel management system is used.
  • Check-in and Check-out: 24-hour reception desk, fast check-in and check-out procedures.
  • Room Service: Daily cleaning, linen change according to schedule or upon request.
  • Meals: Breakfast included in the room rate, served in the breakfast area from 7:30 AM to 10:30 AM.
  • Guest Services: Concierge service, information about attractions, excursion booking.
The hotel operates on a B&B (bed and breakfast) model, which is optimal for this location and category. This allows for a compact staff structure and focuses on the quality of essential services, while recommending local restaurants and cafes to guests for lunch and dinner.
The hotel has stable partnerships with local suppliers of food products, consumables, and services. All contracts can be transferred to the new owner, ensuring continuity of operations.
An important advantage is the possibility of retaining the current management team, which will ensure a smooth transition period and the preservation of high service standards.
Deal Terms and Financing Structure
Asking Price
€3,500,000 (negotiable)
The price includes real estate, business, equipment, and furniture. Inventory and consumables are transferred according to a separate statement.
Deal Structure
Two transaction structuring options are possible:
  1. Share Deal: Acquisition of 100% of the shares of the company owning the hotel
  1. Asset Deal: Direct acquisition of real estate and business
The choice of structure can be determined based on the buyer's tax and legal considerations.
Current Liabilities
Outstanding mortgage loans: €780,000
It is important to note that part of the loans is subsidized by the state under the tourism business support program. There is a possibility of re-registering the loans to the new owner or their full repayment upon sale.
Financing Opportunities
Local banks in San Marino and Italian financial institutions are ready to consider providing a mortgage loan for the acquisition of the property. Typical conditions:
  • Up to 60% of the property value
  • Term up to 20 years
  • Interest rate from 3% per annum
Transaction Process:
1
Preliminary Review
Signing of NDA, provision of detailed financial information, technical documents, and property inspection.
2
Preliminary Agreement
Signing of a preliminary agreement with a deposit (usually 10% of the transaction amount).
3
Due Diligence
Comprehensive legal, financial, and technical verification of the property and business (30-45 days).
4
Final Agreement
Signing of the final agreement and transfer of ownership rights.
5
Transition Period
Current owners provide support during the agreed transition period (usually 1-3 months).

Reason for sale: Generational change in the owner's family. Despite the business's success, the next generation of the family has other professional interests.
Competitive Landscape Analysis
The hotel market in the historic center of San Marino is represented by a limited number of establishments, which creates a favorable competitive environment for the 'La Grotta' hotel. In the 3* Superior category, the hotel has only 2-3 direct competitors, while standing out advantageously due to its location and price/quality ratio.
Competitive Advantages of 'La Grotta' Hotel:
  • Location: The hotel is located in the heart of the pedestrian zone, in close proximity to major attractions.
  • Room Quality: After a complete renovation, all hotel rooms feature modern amenities while preserving a historic atmosphere.
  • Reputation: A 9.0 rating on Booking.com is one of the highest among hotels in this category in San Marino.
  • Service: Family management and permanent staff ensure a high level of personalized service.
Analysis of Main Competitors:
Approximately 5-7 hotels of various categories operate in the historic center of San Marino. The closest competitors for 'La Grotta' are:
  • Hotel A (3*): Located a bit further from the center, has 15 rooms, an average rating of 8.6, ADR around €95.
  • Hotel B (4*): Located in the central zone, has 25 rooms, a rating of 8.8, ADR around €110. A higher category dictates a different price segment.
  • Hotel C (3*): Located on the outskirts of the historic center, 18 rooms, rating 8.4, ADR around €85. A less favorable location is compensated by lower prices.
The analysis shows that the 'La Grotta' hotel occupies an optimal niche in the local market, offering high quality at a reasonable price in the 3* Superior category. The hotel has a stable customer base and a positive reputation, which is confirmed by a high percentage of repeat bookings (around 15%).
It is important to note that the limited supply of hotel services in the historic center of San Marino and strict restrictions on new construction create a natural barrier against the emergence of new competitors, which ensures long-term business stability.
Contact Information and Next Steps
For more information about Hotel "La Grotta", to arrange an introductory visit, and to discuss the terms of a potential deal, please contact us by forwarding your contact details to the representative who provided you with our presentation.
Next Steps:
01
NDA Signing
To receive a complete information package, including detailed financial statements, a Non-Disclosure Agreement (NDA) must be signed.
02
Introductory Visit
Arrangement of a hotel visit and meeting with the current owners for a detailed discussion of operational matters.
03
Preliminary Offer
Preparation and submission of a non-binding offer outlining the proposed terms of the transaction.
04
Deal Structuring
Agreement on the deal structure, legal, and financial aspects with the involvement of specialists.
Hotel "La Grotta" represents a rare opportunity to acquire a highly profitable hospitality business in a unique location with a proven track record of success and clear growth prospects.

The information presented in this document is confidential and intended solely for the review of potential investors.
All financial and operational data can be verified during the Due Diligence process.