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Under-the-radar rentals hurt Spain's hotels

George Mills · 29 Jul 2013, 17:55

Published: 29 Jul 2013 17:55 GMT+02:00

Spain welcomed record numbers of tourists in May and June.

In May, the country saw 5.8 million foreign visitors flock to its shores, while in June this number was 6.6 million.

But nearly 4 million of these tourists chose not to stay in the country's traditional hotels and holiday homes.

That's up 560,000 on a year ago, according to Spanish Government tourism agency Frontur.

Instead, people are turning to what Spain's El País newspaper calls "alternative" accommodation providers. The most important of these new-wave tourism providers are internet sites linking guests directly with the owners of private homes and rooms.

This growing sector does involved some risks though, the daily says, with some businesses taking advantage of unclear rules to avoid paying tax, thus creating unfair competition in the holiday rental market. Also, people who rent out private homes rarely have to submit to the complex safety regulations and building restrictions imposed on hoteliers.

Among the best known of these is Airbnb, a site which earns its income by charging a 6 to 12 percent commission on all holiday rental transactions conducted via its site.

Spain is the site's third most important country in absolute terms, says Jeroen Merchiers, Airbnb's manager for Spain.

Barcelona, meanwhile, is its third most visited city after New York, Paris and London.

Airbnb saw 300 percent growth in Spain from June 2012 to June 2013 and now has 40,000 properties on its books for the country.

Asked whether property owners were paying tax on their earnings, Merchiers said: "We operate in 192 counties and can't concern ourselves with 192 different legislative frameworks."

"We recommend that our advertisers to see a tax adviser, but we can't do any more than that," Spain's Airbnb boss added.

But one Barcelona bed and breakfast owner tells it differently.

The owner of a six-bedroom property, the owner says his property was full in 2011. Now, though, he is struggling to find guests.

Indeed, the owner resorted to listing his rooms on Airbnb to boost his visibility.

"They didn't ask me to do anything, and they didn't ask anything about my tax status," the bed and breakfast owner said.

"When I got my official tourist licence, on the other hand, the police came and inspected me. There were (so many) rules, even about the width of the hallways."

This owner doesn't believe sites like Airbnb are illegal, but says they operate in a legal grey area.

The secretary general of Spain's hotels and holiday homes owners' association Ramón Estalella CEHAT is also reluctant to point the finger of blame.

He explains, though, that while his sector also saw an increase of 100,000 overnight visits from June 2012 to June 2013, hotel prices have stagnated.

Estalella points out that while holiday rental sites like Airbnb are just doing their job, "it's not possible that hotels are having problems when Spain is seeing 6 million tourists (per month) for the first time.

In the tax office, there is come concern about the state of the industry.

Story continues below…

Around €3 billion from rental income goes undeclared every year in Spain, according José María Mollinedo, the head of the tax officals' union Gestha. 

Check out the latest exchange rates on The Local's currency page.

But he pointed out that the data "is general and it's hard to know what percentage of that fraud is tourism-related".

Spain introduced new rental laws in Spain in June 2013, with holiday rentals being excluded from the federal regime.

Spain's 17 autonomous regions now control rules for private holiday rentals, a situation which has caused a good degree of confusion among renters. 

To make the situation even more difficult, not all autonomous regions have implemented relevant laws.

Previoulsy, short-term renting to tourists, whether for the summer period or on a day-by-day basis, had been a civil right enshrined in Spain’s Urban Rental law (LAU).

George Mills (george.mills@thelocal.com)

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