The Spanish Federation of Associations of Tourist Homes and Apartments (FEVITUR) estimates the sector has already lost €448 million so far this year due to coronavirus disruption, and forecasts total loses in 2020 of close to €3 billion.
Easter was a wipe out for a business in which holiday-home owners rent out their properties to tourists. Spain was in total lockdown over Easter, with no visitors allowed into the country, and no domestic tourism allowed either. FEVITUR (Federación Española de Asociaciones de Viviendas y Apartamentos Turísticos) estimated that €188 million of rental income was lost during Easter alone.
The Federation assumes that at least half the season will be lost this year, but hope that a gradual return to normality will mean that rental bookings can be taken for June and beyond.
Any recovery “will be conditioned, in large part, on the recovery of demand in key markets, the recovery of confidence in travel, and the recovery of the economic situation,” says Tolo Gomila, President of the federation.
The holiday-rental sector generates a significant amount of income for Spain, creating jobs, and helping the government raise taxes. With that in mind the federation has sent a proposal to the government with a packet of urgent measures needed to mitigate the damage to the sector.
The measures include a moratorium on local holiday-rental tariffs during 2020, a deferment of social security payments and income taxes for companies in the sector, the streamlining of employment changes to make temporary lay-offs easier, and more money for regional tourism marketing.
There is no sign that the Spanish government has even acknowledged the proposal from the federation. The current Spanish government is hostile to the holiday-rental sector, and unlikely to do anything to make the crisis easier for anyone in the business.
Do private owners have to pay their licences fees and taxes anyway?
In regions like Mallorca where holiday-rentals are heavily taxed, private owners of holiday-homes are wondering if they have to pay for tourism licences and taxes even if there aren’t any tourists this year.
As one reader with a 2-bed holiday apartment for rent in Mallorca explained to me, “the Tourist Licence cost is paid over 5 years. As an apartment we also have to decide up-front how many days we are going to rent out for and commit to the Tourist Tax – this is paid in a lump sum the following May, regardless of how many guests you ended up actually having. So, unless the government decide to be “understanding” on this, we will pay approx €700 soon for our 2020 license and approx €430 next May for our 2020 Tourist Tax. Looking at the situation as it stands today, we may end up cancelling and refunding all guests for 2020.”
I haven’t been able to look into this question as I’ve been out of action fighting the Chinese bat flue for the last three weeks. I hope to find out more next week.