Waking up to the Importance of Residential Tourism

For the past 60-odd years foreigners have purchased Costa del Sol properties – and for nearly all of that time, the people who came to spend 60 days or more in their holiday homes have been either ignored in official statistics or worse, vilified for being “residential tourists” and punished with excessive taxation. Only now it seems, when Spain is gradually coming out of the worst recession since the 1930s, are officials in Malaga waking up to the huge importance of residential tourism.

The Costa del Sol saw a far larger increase in tourism last year than Andalusia region and Spain as a whole, if official figures published by the regional government are to be believed. Statistics covering influx of holidaymakers to the end of November show that tourism figures are up considerably but hotel jobs have actually decreased by 2.5% in the Malaga province and across the Andalusia region.

Could this be because more people are able to afford buying a Costa del Sol home since the housing market crashed?

There’s no Place like Home

The recent trend for holidaymakers has certainly been to opt for self-catering apartments and villas rather than hotels. Families in particular seem increasingly aware of the advantages private villa and apartment rentals offer. Once they have “tasted” the privacy and freedom such holiday accommodation offers, the next step is to purchase their first holiday home.

Up to now, officials and industry experts have rarely, if ever, taken the time to calculate just how much residential tourists, meaning holiday home owners staying in Spain for 60 days or more per year, contribute to local economies.
 
At a recent forum of industry experts, the president of the Association of Constructors and Developers of Malaga, José Prado, pointed out that Spain had welcomed a total of 57.7 million tourists in 2012, of which 20.2 million decided not to stay in a hotel.
 
Mr Prado said: “On the Costa, we just have to look at the fact that between January and October this year, 566,430 passengers arrived at our airport from Germany and that is 30 per cent more than in 2012. Of those Germans, 51 per cent, or 280,000, chose to stay in a home which they use for holidays, the so-called residential tourism.”

Making a Difference to local People

Figures like these highlight the necessity to take a different stance towards residential tourism and to make it more palatable for international buyers to invest in Spain - with reduced taxation instead of scaring buyers off with wealth tax and legislation that forces holiday home owners to declare their worldwide property holdings and income.

Ramón Dávila, the president of Promotur, said a foreign resident holidaying on an average residential development in Marbella creates more employment opportunities than a small or medium-sized business based in the Malaga province.
 
He highlighted that it was not unusual for foreign Marbella property owners to employ two or three staff to work in the garden or the home. The owners of larger properties, and Ramón Dávila stressed that this was not unusual in Marbella, might employ as many as eight people, often providing them with staff accommodation as well – another important factor, given the shortage of affordable rental properties available to locals with part-time jobs.

Ramón Dávila added:  “Residential tourism is a unique phenomenon on the Costa del Sol and carries a weight of 40 per cent in Andalucía.”

Mr Pedro Rodríguez, the president of the Sierra Blanca group, a luxury residential development in the hills overlooking Marbella, also pointed to the great power for good that foreign investment into the residential sector had brought to the region.
 
In the last 20 years the various residential developments had generated investment ranging from EUR 1,500 to EUR 1,600 million, which in turn had created and maintained around 2,000 direct local jobs and nearly twice that number in indirect job opportunities.

Mr Pedro Rodríguez said: “At the moment, this sector guarantees the employment of 1,000 people.” According to his information, more than half of the people employed in the tourism sector currently work in residential holiday homes or in the sectors necessary to residential developments such as grocery stores, hairdressers, bike and car hire companies to name but a few.