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El Penal in Dénia set to become a four-star hotel with 27 rooms

Works to convert El Penal, the 1922 building on calle Diana, into a four-star hotel with 27 rooms and a bar on the top floor are imminent. The developer must preserve the historic façades and integrate the remains of two twelfth-century Islamic houses found on the site.

La Marina Times newsroom
Thursday 8 October 2026, 09:05 · 2 min read
El Penal in Dénia set to become a four-star hotel with 27 rooms
La Marina Times

Fencing on calle Diana

Works to convert El Penal into a hotel are about to begin. According to La Marina Plaza, since Tuesday the entire plot, located between calle Diana and calle Colón in Dénia, has been fenced off, indicating that work is imminent.

The project envisages a small four-star boutique hotel: 27 rooms spread over three floors, the ground floor and a top floor with a bar on the terrace. The plot covers 1,362 square metres.

A century-old building

El Penal was built in 1922 as a rental apartment building. Its name was a popular invention: the flats were so small, compared with the more luxurious buildings in the area, that locals compared them to prison cells.

For much of the twentieth century it was a sentimental landmark for Dénia, because many families bought bread at the Forn del Penal on its ground floor. Its first baker was José Ortiz Romà, father of the creator of Magdalenas Ortiz.

The building stood empty from around 2005 and suffered rapid deterioration, with plaster falling and even a balcony collapsing onto calle Diana. In 2017 it was demolished, except for its two façades, which the council's register of protected assets that year required to be preserved for their architectural value. This only partial protection has been the building's great controversy, because it allowed almost its entire interior to be lost.

Islamic houses beneath the site

Excavations on the plot uncovered the remains of two twelfth-century Islamic houses, built during the height of the expansion of Muslim Daniya. In February this year, the owners covered these remains after a notice from the Town Hall to tidy up the plot, which had been abandoned for nearly a decade.

The future hotel must preserve the two historic façades and integrate the archaeological remains.

Four years of waiting

The Town Hall granted the hotel licence in 2022. The councillor for Territory, Maria Josep Ripoll, explained at the time that all reports had been submitted and the owner could begin work whenever they wished, although she understood they were seeking investment. The start of work has been postponed ever since.

El Penal will join the proliferation of boutique hotels in Dénia's centre. It is an offer that is growing in a city where hotels are in the minority: nearly nine out of every ten tourist places are in homes rather than hotels.

El Penal in Dénia set to become a four-star hotel with 27 rooms
La Marina Times
El Penal in Dénia set to become a four-star hotel with 27 rooms
La Marina Times
El Penal in Dénia set to become a four-star hotel with 27 rooms
La Marina Times
El Penal in Dénia set to become a four-star hotel with 27 rooms
La Marina Times

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