Antes de volver al hotel, pasamos por un mercadillo cerca del centro.

Because antes is followed by de when the next verb is in the infinitive.

So in Spanish:

• antes de + infinitive = before doing something

Examples:

• Antes de comer = before eating
• Antes de salir = before leaving
• Antes de volver al hotel = before returning to the hotel

If you use a fully conjugated verb instead, Spanish usually switches to a different structure, such as:

• antes de que volviéramos al hotel

But in your sentence, because the subject is the same and the action is expressed generally, the infinitive is the natural choice.

It is in the infinitive because it comes after the preposition de in the structure antes de + infinitive.

English often says:

• before returning
• before we returned
• before going back

Spanish commonly uses the infinitive in this kind of structure:

• antes de volver

So volver is not the main verb of the sentence. The main verb is pasamos.
The phrase Antes de volver al hotel just sets the time/background: Before returning to the hotel.

Here pasamos por means something like we stopped by or we went via / through.

The verb pasar has many meanings, and pasar por is very common. Depending on context, it can mean:

• to pass by
• to go through
• to stop by

In this sentence, pasamos por un mercadillo most naturally means:

• we stopped by a street market or
• we went through a street market

Because the sentence is about what happened on the way before going back to the hotel, stopped by is a very natural interpretation.

Here pasamos is the preterite form, meaning we passed / we stopped by.

The form pasamos can look identical in:

• the present: we pass
• the preterite: we passed

So how do you know which one it is? From the context.

This sentence clearly tells a completed past event:

• Antes de volver al hotel, pasamos por un mercadillo...

So it means:

• Before returning to the hotel, we stopped by a market...

This is a very common ambiguity in Spanish with -ar verbs in nosotros:

• hablamos = we speak / we spoke
• compramos = we buy / we bought
• pasamos = we pass / we passed

Context usually makes it clear.

Because a + el contracts to al.

So:

• a el hotel → al hotel

This contraction is mandatory in normal Spanish.

Examples:

• Voy al centro
• Llegamos al restaurante
• Volver al hotel

A similar contraction happens with de + el:

• del

That is why the sentence also has del centro.

Because del = de + el.

The full form would be:

• cerca de el centro

But that is not correct in standard Spanish. It contracts to:

• cerca del centro

So:

• de + el → del
• a + el → al

Examples:

• al hotel
• del centro

In Spain, mercadillo usually means a small market, often an open-air street market with temporary stalls.

It is related to mercado:

• mercado = market
• mercadillo = little market / street market / flea-market-type market

The ending -illo is a diminutive, so it often gives the idea of something smaller or more informal.

In Spain, mercadillo often suggests:

• a weekly outdoor market
• stalls selling clothes, food, accessories, household items, etc.

Depending on context, English translations might include:

• street market
• open-air market
• flea market
  But flea market is not always exact, because mercadillo can include plenty of new goods too.

Because the speaker is referring to a market, not a specific market already known to the listener.

• un mercadillo = a market
• el mercadillo = the market

Using un suggests:

• it is being introduced for the first time
• the exact identity is not the main point
• it was just one market near the center

If both speakers already knew which market was meant, el mercadillo might be possible.

Because cerca normally goes with de:

• cerca de = near

So:

• cerca del centro = near the center

You cannot normally say cerca el centro in standard Spanish.

Examples:

• cerca de casa
• cerca del hotel
• cerca de la estación

Here el centro usually means the town/city center.

So cerca del centro means:

• near the center
• more naturally in English, near the city center or near downtown, depending on the place

In Spain, el centro very often refers to the central area of a town or city, especially the busy commercial or historic center.

Because Spanish often omits subject pronouns when the verb already shows who the subject is.

Here:

• pasamos already tells you the subject is we

So nosotros is unnecessary unless you want emphasis or contrast.

Compare:

• Pasamos por un mercadillo = We stopped by a market
• Nosotros pasamos por un mercadillo = We stopped by a market

The second version sounds more emphatic, as if contrasting with someone else.

Because Antes de volver al hotel is an introductory time expression placed at the beginning of the sentence.

The comma helps separate that opening phrase from the main clause:

• Antes de volver al hotel, pasamos por un mercadillo...

In short:

• introductory phrase = Antes de volver al hotel
• main clause = pasamos por un mercadillo cerca del centro

In Spanish, this comma is natural and helpful, especially in writing.

Yes. Volver and regresar can both mean to return / to go back.

So these are both possible:

• Antes de volver al hotel
• Antes de regresar al hotel

The version with volver is very common and natural in everyday Spanish.
In many contexts, regresar can sound slightly more formal or simply a bit less colloquial, depending on the speaker and region.

Very often, yes, when you say where someone returns to.

Examples:

• volver a casa
• volver al trabajo
• volver a Madrid

So:

• volver al hotel = to return to the hotel

Be careful not to confuse this with the structure volver a + infinitive, which means to do something again:

• volver a leer = to read again
• volver a intentarlo = to try again

In your sentence, volver al hotel is about destination, not repetition.