One in every three individuals who operate tourist rental homes in Mallorca is a foreigner

Year 2018. The then president of the Balearic tourist rental association (today the Associació d’Habitatges de Lloguer Turístic, Habtur), Joan Miralles, delivered a manifesto to the Government to defend its activity against the regulation that was being debated at that time. in Parliament. Its main argument was that it contributed to the “democratization of tourism.” That the benefits of a sector that accounts for more than 40% of the Islands’ GDP would reach “sectors of the population” that had not been reached before. Seven years later, vacation rentals have become one of the most lucrative businesses in Mallorca that is still, to a large extent, in the hands of individuals. But in which, paradoxically, one in three license owners is already foreign.

“Right now it is more profitable to dedicate yourself to tourist rentals than to work. That is why it is a practice that more people try to join every day. It is becoming a form of popular capitalism,” says Sònia Vives Miró, PhD in Geography from the University of the Balearic Islands (UIB). And the numbers prove him right.

According to official Government information consulted by elDiario.es, of the 15,387 licenses for which there is data in Mallorca out of a total of 16,992, more than 80% are operated by individuals, compared to 20% managed by companies.



All researchers agree that the change came in 2008. By then there were just over 2,700 legalized tourist homes in Mallorca, but the economic crisis completely transformed the scenario. “After years in which Spanish policies had focused on guaranteeing widespread access to bank credit so that the middle classes could buy a home, new mechanisms had to be sought to ensure that it could continue to be a financial asset,” he points out. Vives Miró. And that mechanism was none other than vacation rentals. “Initially, the authorities said that it was a way for Mallorcan people to rent their properties and not have to get rid of them due to the recession,” recalls UIB professor and expert in Tourism Geography, Macià Blàzquez.

Right now it is more profitable to dedicate yourself to tourist rentals than to work. That is why it is a practice that more people try to join every day. It is becoming a form of popular capitalism

Sònia Vives Miró
Doctor in Geography from the UIB

The second homes went from being the refuge of their owners to accommodation available for the millions of travelers who come to the island every year. While the institutions began to regulate the activity, the number of vacation homes did not stop growing. The boom of Airbnb-type platforms gave the definitive boost. And soon that “democratization” of the business that had been solely in the hands of Mallorcan heirs, expanded its horizons.



From ‘family outing’ to business

Toni Muñoz, manager of Summer Time Villas, noticed that transformation in 2017. “Until then we had been a traditional real estate agency, dedicated to the purchase and sale of houses to live in. But more and more people began to reach us interested in buying homes to use them directly for tourist rentals. The majority were and still are Mallorcans,” he explains. Today more than 10,900 individuals operate at least one license in Mallorca. Among them there are 931 Spaniards who have more than one license and an ‘elite’ of 52 who rent four or more houses on the island. At the top is José Francisco GDT, with fifteen rentals distributed between Cala D’Or, Cas Concos and Santanyí.

More than 10,900 individuals operate at least one license in Mallorca. Among them there are 931 Spaniards who have more than one license and an ‘elite’ of 52 who rent four or more houses on the island. At the top is José Francisco GDT, with fifteen rentals distributed between Cala D’Or, Cas Concos and Santanyí

The figures show that the activity has gone from being a family outing to a business. Among other reasons because, as the current manager of Habtur, Maria Gibert, emphasizes, the regulations do not establish a limit on the number of licenses per person or company, but it does establish a limit on the number of homes that an owner can have as a vacation rental: three. “If you have more than three licenses, it means that you are not the owner of all those houses, but rather that you act only as an exploiter of some,” he points out.

The popularization of this new form of accommodation and tourism meant that the owners quickly saw how their income multiplied until they amortized the outlay they had made in a short time. “And that, together with its legalization, has ended up attracting capital and foreign investment that has added to the activity. In fact, there are many facilitators such as real estate agencies that go directly outside to look for these investors,” says Blàzquez. Of the 12,410 licenses that are in the hands of individuals in Mallorca, 3,400 correspond to a total of 3,213 foreign people. The vast majority – 3,060 – have only one license, but a small group of 22 operate three or more homes.

“It is normal because there are many foreigners with a second residence here who sell it when they are not on the island. What worries us most is that, in addition, there is a whole group that does it illegally without a license,” says Gibert. Many only spend three or four months on the island. The rest of the time they become a kind of ghost landlord who manages the entry and exit of clients from thousands of kilometers away.

Many foreigners only spend three or four months on the island. The rest of the time they become a kind of ghost landlord that manages the entry and exit of clients from thousands of kilometers away.

Business concentration

Despite the importance that individuals still have in the business, it is increasingly common for professionals to manage these rentals. In Mallorca there are 1,502 companies that operate at least one license: 1,404 Spanish and 98 foreign. Gibert points to “generational change” as one of the causes. “Traditionally, it was the owners who did it, but when passed from parents to children, they have decided to hand over management to specialized companies,” he explains.

For Muñoz, another key factor has been the “professionalization” of the sector as it grew in number and regulation. “At a bureaucratic level, the regulations include requirements that are very difficult for an individual to meet, such as the obligation to have a telephone available 24 hours a day,” he explains. His company now has a reservations department in which eight people control the 400 properties in its portfolio.



As happened with individuals, more and more companies have joined a more than profitable activity. Thus, in the official lists they appear as real estate operators, construction companies, savings banks and even audiovisual producers that decided to obtain permits to practice. “There are cases of companies that, like us, have expanded their activity, but in recent years it has become increasingly common for them to emerge from scratch to dedicate themselves solely to vacation rentals,” says the manager of Summer Time Villas.

The other important change is that of the increasing concentration of licenses. “At first it was a very fragmented market, but like any economy of scale it is concentrating on a smaller number of companies. The same thing that has happened in the banking sector. Not only because of bureaucratization, but also because now the competition is tougher,” says Toni Muñoz. The proof is that only three companies – Gestión y Mantenimiento SL, Rentals Pollença and Grupo Miguel Cifre – manage 254 licenses on the island.

For Gibert this accumulation is not a problem. “However, we are in a moment of moratorium (the authorization of new tourist rental licenses is frozen until 2026) and we will have to see under what conditions it is lifted. That would be when it would be necessary to request that some type of scale be implemented that gives priority to people who do not have licenses or that imposes a minimum number of years of residence in Spain,” he points out.



Owners vs. “declassed”

At this point, there are few who question the consequences that the tourist rental boom has had on access to housing throughout the Balearic Islands. “It is necessary to set limits on this commercialization because it is evident that it is leading to social problems,” emphasizes Blàzquez. “There is nothing about democratization. It is a good business that works and that clearly benefits a sector,” adds Vives Miró.

For the doctor in Geography, owning a home is right now the biggest element of division in society. “The population is differentiated between owners and non-owners. And the latter are being declassified, impoverished. They are excluded from access to housing. While some earn 10,000 euros per week from vacation rental income, others do not have 100% of their salary to cover the rent,” he denounces.

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