Holiday Lets: Now they go national

There is no single national law that applies to holiday rental accommodation and no single national body that represents the holiday let sector. These two issues were highlighted at a recent conference in Madrid, the call going out for there to be a law and a unified organisation that can liaise more effectively with legislators.

The various regions of Spain all have their own laws regarding holiday rentals, and these 17 separate laws have given rise to a chaotic situation, to uncertainty and to difficulties in regulating holiday lets. The need for appropriate legislation has become ever more urgent, the holiday let market in Spain as a whole increasing annually at a rate of 30%. 

The reasons for the rapid increase in this market are obvious. There is a vast stock of homes that stand empty for good periods of the year and a desire on behalf of the holidaymaker to find savings; without middlemen being involved, direct contact between owners and renters can result in such savings. And given the benefits that this form of tourism can deliver - both to local economies and the national economy - businesses engaged in holiday rentals appreciate the need for there to be proper and effective legislation and for a proper voice to represent their interests.

A national law that should apply to holiday lets, the tenancies act, is to be reformed, Madrid acknowledging that when it was drawn up in 1994 it didn't specify tourism rental accommodation and also acknowledging the necessity for harmonisation of the legal situation across the different regions of Spain. The national government is, however, coming at the reform from one particular way, that of addressing illegal accommodation. The emphasis is important, as it determines the thinking behind legislative change, and it is one that businesses in the holiday rental sector challenge because there is a resultant absence of emphasis on the professionalising of a tourism sector that is undergoing major development.

That there is a need for harmonisation is shown by the vast differences in regional approaches. We know all about the approach in the Balearics (and the Canaries). The total opposite to this is the approach being adopted in Catalonia where any form of accommodation is to be regularised and renters will also be subject to paying the new tourist tax.

But how easy (or difficult) would it be to harmonise legislation? Different situations apply in different regions, and in the different regions there are different, dominant voices and lobbies. The regions have the right to draw up their own tourism laws, as is the case in the Balearics, but these laws are not sacrosanct. National government can intercede and force changes to regional laws, and indeed Madrid has questioned clauses in the Balearics new tourism law which conflict with responsibilities of the state. One of the clauses that has been questioned does in fact refer to the "classification of tourism companies", one aspect of which is companies that commercialise tourist stays in homes (holiday lets in other words).

The principle exists, and it is a constitutional one, for national government to insist on amendments to regional legislation where it runs counter to state responsibilities or indeed European directives or law. In theory, therefore, national government could, were it of a mind to, override the Balearics legal hostility towards the holiday let market. In fact, national government is in a quandary on this issue, as the national tourism plan has recognised residential tourism as a strength. Residential tourism is usually taken to mean that provided by owners of second homes, those who come from other parts of Spain or overseas to stay in their homes. What the national government won't admit, though, is that this residential tourism means something else as well. It knows what it means - holiday lets - but is reluctant to say so.

This isn't altogether surprising when the national tourism minister and national tourism secretary of state are, respectively, from the Canaries and the Balearics, the two regions of Spain with the strongest legislation against holiday lets. Both José Manuel Soria and Isabel Borrego know full well how badly any more liberal approach to holiday lets would play with hoteliers in their home territories.

For the lobby and government in the Balearics that want to strengthen their case against illegal accommodation, reform of the national tenancies act is seen as a means of doing so. While Madrid's stance appears to be reform without taking account of a growing sector of the tourism market, the noises coming out of the recent conference give encouragement that Madrid might adopt a different attitude. I say might. Just remember, though, who Isabel Borrego is. She is a property expert, not a tourism expert. The tenancies act is property law and not tourism law.


Any comments to andrew@thealcudiaguide.com please.