– Half of Spanish Holiday Rentals Are Illegal

Just half of holiday rentals in Spain have a licence to operate legally, according to new research by Esade business school.

The proportion of legal tourist rentals tends to be higher in places where it is regulated, such as Barcelona, where 75 per cent of holiday lets operate legally. However, it does depend on the the sanity of the regulations, with excessive regulations driving landlords into the black economy in some areas.

The proportion of legal rentals is much lower in Madrid (39 per cent), Mallorca (34 per cent) and Granada (31 per cent), despite, or perhaps because of, draconian holiday rental regulations in Madrid and theBalearics.

According to the Esade report, 14 per cent of tourists who come to Spain every year stay in holiday lets and spend €2,685 million whilst on holiday in Spain. Of this spending, €921.9 million goes on accommodation (€249 per person) while €1,763 million is spent on shopping, restaurants and leisure.

The research also finds that 32 per cent of people who stay in holiday rental homes would not come to Spain if they could not stay in this type of accommodation, so at least a third of holiday rental clients would never stay in a hotel. Hoteliers claim that holiday rentals are stealing their business thanks to unfair advantages like tax breaks, but this research suggest that is not true for at least a third of the business generated by holiday rentals.

Mar Vila, lecturer at Esade and co-author of the report, explained that the report was compiled based on interviews with holidaymakers and property owners in San Sebastián, Barcelona, Mallorca, Madrid, Granada and Calpe. The research found that just 50 per cent of the holiday rentals included in the study are regulated and registered. The proportion, Vila explained, is higher in places with holiday let legislation such as Barcelona. The exception is Mallorca where legislation is “restrictive” and only 34 per cent of holiday lets are registered. “This doesn’t mean they don’t pay taxes,” Vila pointed out.

The report, sponsored by the Spanish Federation of Holiday Let Associations (Fevitur in Spanish), also reveals that 92 per cent of owners who decide to let their home to tourists do so to “boost household finances”. For many it’s a matter of financial necessity, with 65 per cent saying they need it as a financial backup, and 58 per cent saying they wouldn’t be able to make ends meet without it. “Holiday lets contribute to the local economy, not only because guests spend in local shops or large stores but because holiday let owners employ people for maintenance, cleaning, refurbs or buy furniture,” Vila said.

He also pointed out that the study contradicts the theory that holiday rental guests are part of the “binge drinking tourism”. Clients are generally foreigners, with an average age of 47 and mostly (83 per cent) come to Spain to spend a few days with their family. These tourists’ average stay is 7.4 days, longer in coastal areas and shorter in cities.

Recently the tourist association Exceltur published a report on the P2P platforms that manage holiday lets, particularly Airbnb and Homeaway, and called for more restrictive legislation for the sector. The Exceltur report accused the holiday rental business of all manner of wrongdoings.

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