Why Spain's Airbnb crackdown will likely make hotels more expensive

Ordering 66,000 illegal Airbnb ads to be taken down, banning tourist apartments in central areas and prohibiting new tourist licences - Spanish national, regional and city authorities appear to finally be taking action against short-term lets.

This is all in a bid to return tourist rentals to the general market and help alleviate the housing crisis, which is currently the biggest problem Spanish society is facing.

Rising rents and lack of housing mean that thousands are unable to find affordable places to live, an issue particularly affecting young people and those with low incomes.

The unintended consequence of this, however, is that with few accommodation options to choose from, hotels don't feel the need to be as competitive and are increasing their prices.

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This trend has already been several in several places where Airbnb has been banned or the number of tourist apartments drastically limited.

In New York, where Airbnb was banned in September 2023, hotel prices rose 20 percent and rents did not drop, forcing many to move out of the city.

And in Barcelona, ​​which has been restricting licences for the last 10 years, the average price of a hotel increased to €188 in 2024, from €174 in 2023, according to data from the Barcelona Hotel Guild. Prices are 30 percent more expensive than in 2019.

Nevertheless, it's worth noting that hotel prices across the Catalonia region (not just Barcelona) have decreased by 2.1 percent this year, according to Spain's National Statistics Institute, the only region in Spain where they went down.

Barcelona is now the third most expensive hotel destination in Spain, behind only Marbella and the Balearic Islands, according to a study by the consulting firm Cushman & Wakefield.

Rental prices also rose 72 percent in the Catalan capital, and many apartments did not return to the traditional rental market.

They were instead transformed into temporary lets, rented out for a few months rather than holiday lets for a few weeks in order to skirt short-term let legislation.

Nine out of ten tenants in Barcelona now have temporary rental contracts, according to a December 2024 study titled “Renting: insecurity guaranteed by law”, published by the Barcelona Urban Research Institute (IDRA).

The problem can also be seen in Madrid where landlords prefer short-term rentals of between one and 12 months, avoiding long contracts and price caps. Many even prefer to leave their homes empty rather than take on the legal five-year commitment to rent them out.

Furthermore, Madrid city council now only allows tourist apartments in entire buildings dedicated to this purpose in the city centre.

READ MORE: How Madrid plans to split city in two to regulate holiday lets

Hotel owners in the Spanish capital, which already raised their rates by a record 15.9 percent in 2024, will now feel even more empowered to hike their prices as competition from Airnbnb is decreasing.

And it’s not only in Spain’s two biggest cities where this is happening. Ads for unlicenced Airbnbs in Andalusia, Valencia, the Balearic Islands, and the Basque Country are all being removed.

In the Andalusian province of Málaga there are 43,366 illegal tourist homes, according to data from the Ministry of Consumer Affairs and in Valencia, the local government say that there are around 12,000 tourist apartments in the city and the majority of them are illegal.

This paves the way for hotels to increase their prices in these regions as well. In Málaga the average daily hotel rate has grown the most in the whole of Spain, with a 21.09 percent increase compared to the same period last year.

And in Valencia prices rose by 11.1 percent in 2024 compared to 2023.

Taking down ads for illegal apartment rentals isn’t the only measure the Spanish authorities have been working on to reduce the number of tourist apartments in top destinations across the country – both legal and illegal.

Other regulations include issuing bans on tourist licences in historic central areas and making the rules for getting a tourist licence much stricter such as requiring a tourist apartment to have a separate entrance, to be on a certain level of a building and allowing neighbours to veto the request if they choose.

Overall, this increase in hotel prices isn't just affecting foreigners, Spaniards travel a lot within their own country, particularly during key times like Easter and summer. These price hikes are only going to make it harder for the average population to travel too, in addition to struggling to pay rent and mortgages.

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