Bank transfer to non SEPA bank

I attempted to do an electonic bank transfer to Spain for accommodation. I got the above message when setting up the details that the bank was not in the SEPA system. Does this indicate that there is something amiss or is there a another way of doing such a transfer.

I have advised the agency however they haven't replied to date.

Many thanks

SEPA have a deadline for compliance by February 2014. A bank can continue to operate without SEPA compliance, but you would not be able to make a SEPA transfer to it.
From your description of your issue, the agency your bank is trying to use a SEPA process to transfer the funds, but the receiving bank is not set up to receive such payments.
It remains, today, possible to transfer funds to a bank in Spain, just not using a SEPA process. Your bank should have an alternative method available.

Thanks for the reply,

It was easy after all once I got the bank to set it up over the phone! I wasn't putting in the SWIFT number.

Regards