The owner of the family-friendly Green Gables Hotel on West Bank in Falsgrave decided to sell up having owned the property for several years.
On the edge of Falsgrave Park, the substantial five-storey hotel comprises 37 bedrooms, 15 apartments, and nine reception rooms, along with a bar, conservatory, dining hall, games room and heated indoor swimming pool. There is also a small shop, library, café and three-storey owners house attached to the main building.
Mark Worley, Hospitality Director for the North East and Yorkshire for Christie & Co, who handled the transaction, said: "Foreign travel restrictions as a result of the Covid-19 pandemic have created a surge in domestic staycation business.
"As a result, there is excellent demand for UK hospitality businesses, particularly those in national parks, tourist hotspots and coastal resorts, such as the Green Gables Hotel."
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Previous owner Youfeng Jiang said the location of the hotel no longer complemented the rest of his business portfolio and future strategy, and so decided to put the business up for sale.
The buyers of the hotel, who wish to remain anonymous at this stage, intend to keep the hotel trading in its current format and inject a significant level of investment into the bedrooms and public areas.
Mr Worley added: "The added advantage with this particular hotel is the huge amount of accommodation on offer which in turn provides excellent scope to increase trade levels and to capture the upsurge in visitors to the Yorkshire Coast."
The hotel was originally built as Scarborough Hydropathic Establishment at a cost of nearly £10,000 in 1889 by Professor Wells. It retains many of its original features, and formerly offered a variety of Turkish and Russian baths.