d_t_vos / Foter / CC BY-NC-SA

The Minister for Industry, Energy and Tourism, José Manuel Soria, has called for “a coordinated effort” to regulate Spanish holiday lettings to make them “as similar as possible” around the country and avoid “unfair competition” with hotel accommodation.

Last year his Government reformed the Urban Letting Act (Ley de Arrendamientos Urbanos/LAU in Spanish) devolving holiday rental regulations to regional governments, and creating a hotchpotch of local laws that vary from region to region. This will be one of the topics discussed at the annual meeting of the Spanish Tourism Council (Conestur), a consultative board for meetings between regional ministers for tourism.

Under the new LAU, autonomous regional governments are empowered to regulate private tourist rentals, which regional governments under the sway of powerful hotel lobbies have done with unsurprising eagerness to limit competition from private landlords.

Under Madrid’s new tourist rental regulations, for example, tourist lettings must have a minimum duration of five days or they are illegal. That makes the vast majority of tourist lettings illegal.

In regions where tourism is less important, and hotel lobbies are not so powerful, most governments have not bothered to introduce specific tourist rental regulations, leaving the matter to the national LAU, which is far less restrictive.

The Minister for Tourism says that “the most important thing is to make a coordinated effort to regulate this matter as uniformly as possible” with a two-fold objective.

Firstly, to ensure that private holiday rentals do not create unfair competition for hotels, “within the guidelines of the principles of fair competition”.

And secondly, to safeguard consumers of holiday rentals by “offering the highest guarantees to tourists who opt for this kind of holiday accommodation in Spain”.

ANALYSIS

When this PP Government talks about safeguarding quality for tourists staying in holiday rentals it is just a smokescreen for stifling competition in favour of the all-power hotel lobby.

Holiday rental regulations in regions like the Balearics and Madrid are all about restricting tourist rentals and consumer choice at the expense of the local economy, but to the benefit of the hotel business.

Tourist rentals do need some regulations to minimise conflicts between tourists and residents, but booking sites like Airbnb, and review sites like Tripadvisor, will do a much better job of helping tourists to get the quality they pay for than any government regulation.

The current situation, with regulations that vary from region to region, are confusing for landlords, in particular foreign investors, and encourage homeowners to take their chances in the cash economy.

When Soria calls for a “coordinated effort” what he probably has in mind is pandering to the hotel lobby all over Spain, not just in some regions.