Torquay’s Gleneagles Hotel formed a basis for the series after Cleese visited with his Monty Python co-stars in 1971.
The comedian famously dubbed hotel owner Donald Sinclair ‘the most wonderfully rude man I have ever met’ and later used him as a template for the character of Basil Fawlty.
Sinclair sold the hotel in 1973 and it was later managed by Best Western.
The 41-room three-star site ceased trading in 2015 and is being developed by Churchill Retirement Living in to 32 retirement flats.
Famous incidents involving Sinclair included him throwing a timetable at a guest who asked when the next bus was due and hiding Eric Idle’s bag behind a wall in the garden because he thought it might contain a bomb.
Idle claims he asked Sinclair: “Why would anyone want to bomb your hotel?” To which the hotelier replied: “We’ve had a lot of staff problems lately.”