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Holiday rentals gain popularity despite hostile new legislation

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More tourists than ever are choosing to rent private homes on holiday

The number of tourists who opted for a private rental over a hotel went up 2.1pc in July compared to the same time last year.

The latest figures confirm that more and more tourists are choosing to stay in private rented accommodation when holidaying in Spain. Of the 7.8 million foreign tourists visiting Spain in July, 2.5 million of them (32pc) went for holiday letting rather than a hotel, reveal new figures from the Ministry of Tourism.

Holiday lettings have increased by 13pc in the first six months of the year, according to the same source.

The increase in the popularity of holiday rentals compared to hotels come despite a new law introduced just before the summer that will make it more difficult to rent out private homes legally to tourists in many popular parts of Spain.

The new law, ironically called the Law of Measures to Develop and Increase the Flexibility of the Rental Market (Ley de Medidas de Flexibilización y Fomento del Mercado del Alquiler) devolves the regulation of tourist lettings to autonomous regional governments, some of which are hostile to the business (under pressure from the hotel lobby). The new law most certainly does not encourage the tourist lettings market in Spain, nor make the business any more flexible.

In Madrid, for example, the autonomous government is drafting regulations to “eliminate unfair competition” that holiday lettings present to hotels. In the Balearics, licences are required for tourist rentals, with restrictions on new licences.

Foreign tourist are the biggest users of holiday lettings in Spain. They made up 71pc of demand in July, according to the National Institute of Statistics. But increasing demand for holiday rentals from foreigners was not enough to compensate for the collapse in local demand. Overall occupancy rates in July reached only 50.3pc.

The British are the biggest market for holiday rentals in Spain, up 0.8pc this year, followed by the Germans, up 8.5pc this year.