The tourism sector in Spain, following the recent conclusion of the International Tourism Fair (FITUR), is poised to report an unprecedented year.

Projections suggest that 2024 could mark the highest-ever influx of tourists to the country, cementing tourism as a cornerstone of the Spanish economy by contributing over 13% to the national GDP.

However, this remarkable growth has illuminated a burgeoning issue: the surge in tourist arrivals necessitates an expansion in accommodation options.

This demand has outstripped the traditional supply of hotels and campgrounds, propelling an explosive growth in vacation rentals.

By August 2024, vacation rentals accounted for 36.5% of available accommodation, surpassing the 35.1% offered by hotels, according to SEGITTUR, an organization under the Ministry of Industry and Tourism, reflecting INE statistics.

The intersection of this economic pillar with Spain's pressing housing challenges has become glaringly apparent.

Major cities, including Málaga, Alicante, Barcelona, Madrid, Valencia, and Sevilla, alongside mid-sized towns and even small villages, are experiencing the disruptive impacts of this trend.

Data suggests that the number of vacation rental units nearly reached 400,000 nationwide by August of the previous year, marking a 16% increase compared to the year before.

This figure rivals the housing stock of Zaragoza, Spain’s fifth-largest city with 686,000 residents.

This rate of growth underscores why many municipal leaders announced intentions in 2024 to curtail the proliferation of such rentals amid a declared "housing emergency" by the Ministry of Housing.

Within the span of a year, an equivalent to the housing stock of a city like Jaén transitioned exclusively to tourist accommodations.

Amid these shifts, illegal vacation rentals complicate the landscape.

While the INE accounts for both legal and segments of illegal offerings, actual figures might be significantly higher.

The Madrid City Council recently disclosed that 93% of vacation rentals in its jurisdiction operate without proper licensing.

Despite boasting the largest number of vacation rentals—18,800, with a 30% increase over the past year—Madrid's hotel capacity remains unchallenged, unlike regions such as Andalusia, Asturias, Cantabria, the Valencian Community, Galicia, and Murcia.

The growth momentum continues as concerns over impending regulatory measures drive property owners to pivot towards vacation rentals pre-emptively.

Prominent platforms like Airbnb and Booking.com play pivotal roles in this market expansion, although they withhold comprehensive, segmented data.

Regulatory discussions reached a critical point in Málaga, where authorities have today instituted a ban on new vacation rental registrations across 43 of the city’s 417 neighborhoods, where such rentals constitute over 8% of the residential housing market.

The municipal study prompting this decision highlighted how these rentals not only siphon housing away from long-term residents but also escalate rental prices, strain housing availability, and complicate access to residential housing due to high returns attracting property investors.