Running a tourism business in Spain isn’t like running one back home. The seasons are different, the tax rules don’t match what you’re used to, and licences can change overnight. Many expat owners only find this out the hard way — when they get a fine, can’t renew a rental licence, or realise their summer profits don’t stretch through winter.

The seasonal rollercoaster

You’ll know this better than anyone: summer still pays the bills, but travel outside the peak months has been growing even faster. Since 1999, off-season visits have jumped by 115% compared with 63.5% in summer. On paper, that looks like stability. In reality, it means uneven cash flow. Some businesses simply shut their doors in winter to cut losses, while others stay open and struggle through quieter months. Either way, planning is tough — one month you’re sitting on cash, the next you’re stretching every euro to cover wages, taxes, or supplier bills.

Margins under pressure

Maybe you’ve noticed it already. Your takings are higher than a few years ago, but so are your costs. The Bank of Spain says tourism income in 2023 was up 28% on 2019, but production costs climbed nearly 18% in the same period. Wages, energy, ingredients — almost everything feels more expensive. And when margins are that tight, even a small surprise bill can throw everything off. On top of that, rents in tourist hotspots have been climbing steadily, making it harder for small bars and restaurants to keep hold of good locations.

The rental squeeze

If part of your income comes from tourist rentals, you’re probably feeling it. Listings have surged 25% in just two years, but at the same time the authorities are clamping down. In 2025 they removed 65,000 illegal listings and flagged another 55,000. That matters not just for holiday-home owners, but for the whole ecosystem around them — management companies, villa agencies, cleaners, maintenance crews, even the bike rental shop or watersports operator that depends on steady tourist flows. When licences are refused or homes are pulled from the market, everybody in the chain feels it.

A good example is what’s happening in Mallorca, where rustic properties are now being refused tourist rental licences if they fall into new flood-risk zones. Owners who once rented freely are suddenly dealing with “No Apte” rulings, unexpected costs for flood studies, or outright bans — and the knock-on effect hits the companies that service those homes too.

Pressure from the community

And then there’s the local side. You’ll have seen the protests in Mallorca, Ibiza and the Canaries. Tens of thousands of people have been demanding limits on overtourism and housing pressures. For you, that translates into more scrutiny, and usually tougher rules. It also puts extra weight on how you show up in your community, because the mood is shifting.

Staffing struggles

Finding good staff is harder and more expensive than ever. The central bank’s figures on rising production costs include labour, and if you’ve been hiring, you’ll have felt it. Seasonal contracts are no longer enough to tempt people. In many tourist hotspots, restaurants are now expected to provide accommodation just to compete for workers, predominantly at the luxury end. That’s not only a logistical headache, but also a new cost to factor into already thin margins.

All-inclusive competition

Another challenge is competing with all-inclusive hotels. When visitors have already paid upfront for food and drink, they often spend less in local bars and restaurants. The same applies to excursions and activities — if a hotel packages boat trips, walking tours or bike hire into the room price, independent operators lose out. For travel and tourism businesses, the answer is rarely to compete on price. Instead, it’s about offering something resorts can’t: authenticity, flexibility, or a personal touch that makes the experience feel unique.

Where expats get caught out

Beyond the obvious pressures, Spain’s tax and business rules have quirks that regularly trip up foreign owners:

• Capital gains tax only applies when you sell an asset, not when it rises in value — very different to the UK.
  
• Wealth tax still applies annually, even if you haven’t sold.
  
• Modelo 720 requires you to declare foreign assets over €50,000 — many expats miss this until it’s too late.
  
• Inheritance and gift tax works differently here: it’s the person who inherits or receives the gift who pays, not the estate.
  
• IVA rules aren’t identical to UK VAT — quarterly filings and different deduction rules mean you can’t assume it works the same way.
  
• Licences are local and zoning-based. Even a city apartment can suddenly be ruled out of tourist rentals depending on local regulations or flood maps.
  

These differences seem technical, but they change how you plan, how you invest, and how you pay yourself.

So what can you do?

The truth is, you can’t control how many tourists arrive, what the government regulates, or how locals feel about it. But you can take control of your finances by investing in the right small business accounting services. Here’s where many owners slip up — and what to do differently:

• Cash flow: Don’t assume summer profits will cover the year. Build rolling 12-month forecasts and update them monthly.
  
• Taxes: Ringfence IVA and licence costs as you go. Waiting until December is how panic sets in.
  
• Licences: Check your property status regularly. Flood maps, zoning changes and rustic land rules can pull the rug from under you.
  
• Staffing: If you’re offering accommodation, budget it like part of the wage. Don’t tack it on as an afterthought.
  
• Costs: Review supplier and utility contracts every year. Inflation isn’t slowing.
  
• Reserves: Even a 5% buffer from summer takings gives you room to breathe in January.
  
• Advice: Don’t wait until the deadline. A mid-season check-in with an advisor can save you more than an end-of-year rescue job.
  

Final thoughts

Tourism in Spain isn’t slowing down, but it is getting more complex. Higher costs, tighter rules and shifting customer habits mean you need to know your numbers, not just hope the busy season carries you through. If you’re an expat owner, it’s easy to feel like the system is stacked against you — but with the right advice, you can use those same rules to your advantage.

Want to stress-test your business against the next set of changes? Set up a call with Baleario and talk it through.