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After the implementation of smoke-free policies in indoor hospitality venues (including bars, cafeterias, restaurants, and pubs), smokers may have been displaced to their outdoor areas. We aimed to study smoking visibility and second-hand smoke exposure in outdoor hospitality venues.We collected information on signs of tobacco consumption on entrances and terraces of hospitality venues in 2016 in the city of Madrid, Spain. We further measured airborne nicotine concentrations and particulate matter of less than 2.5 μm in diameter (PM2.5) in terraces with monitors by active sampling during 30 min. We calculated the medians and the interquartile ranges (IQR) of nicotine and PM2.5 concentrations, and fitted multivariate models to characterize their determinants.We found 202 hospitality venues between May and September (summer), and 83 between October and December 2016 (fall) that were opened at the time of observation. We found signs of tobacco consumption on 78.2% of the outdoor main entrances and on 95.1% of outdoor terraces. We measured nicotine and PM2.5 concentrations in 92 outdoor terraces (out of the 123 terraces observed). Overall median nicotine concentration was 0.42 (IQR: 0.14–1.59) μg/m3, and overall PM2.5 concentration was 10.40 (IQR: 6.76–15.47) μg/m3 (statistically significantly higher than the background levels). Multivariable analyses showed that nicotine and PM2.5 concentrations increased when the terraces were completely closed, and when tobacco smell was noticed. Nicotine concentrations increased with the presence of cigarette butts, and when there were more than eight lit cigarettes at a time.Outdoor hospitality venues are areas where non-smokers, both employees and patrons, continue to be exposed to second-hand smoke. These spaces should be further studied and considered in future tobacco control interventions.Smoking visibility remains widespread in outdoor hospitality venues in Madrid.SHS levels are relatively high, especially in closed outdoor terraces.Outdoor hospitality venues should be considered to become completely smoke-free.Policymakers should ensure that the existing smoke-free regulations are enforced.