Bomb experts examine the wreckage
A warning meant the building was evacuated - the last of holidaymakers were being moved out of the hotel as the bomb exploded, causing minor injuries with flying glass.
However, dozens of tourists - many of them British and Italian - are said to be badly shaken.
Police said the warning came from the Basque separatist group Eta, who have recently threatened to target tourist areas.
The blast went off at about 0600 GMT at the Cala Font hotel in Salou, just south of Barcelona and one of Europe's most popular resorts.
'Plumes of smoke'
Guests were evacuated after police received a call an hour before the blast, a spokesman for the region's Interior Ministry said.
Eyewitness Martin Ballard was in the resort when the bomb detonated.
He told BBC News 24: "Plumes of black smoke rising high above the resort could be seen from quite some distance."
A group of 200 holiday makers were evacuated from the 300-room Cala Font hotel to the nearby Negresco hotel.
An employee at the Negresco hotel said that the group included British, Irish, Russian, Spanish, Portuguese, Dutch and German holidaymakers.
Defuse
The police were trying to defuse the device when it went off.
Provincial police chief Rafael Navarro said: "The only good thing is that fortunately there were no victims."
Another eyewitness told the BBC that the bomb had made a "hell of a mess" to the hotel and that if there had not been a warning the toll might have been much worse.
He said shocked guests were calling home to reassure their families that they were safe.
Eta, whose name stands for Basque Homeland and Liberty, has killed 12 people so far this year, and about 800 during their 33-year campaign.