A considerable amount of property owners in Spain are not willing to wait for touristic demand to recover so they are considering starting to offer their apartment as traditional long-term leasing. Nevertheless, they will need to adapt to the new situation and understand that its profitability will be reduced, as leasing contracts now could be extended from up to seven years.

Some of these landlords with mortgages upon properties offered as AirBnB might be dependent on the revenue that the touristic season revenues to them, however since the situation this year is different they might need to consider to offer it to long-term tenants that will fill the gap left by tourists.

At national level, “the transfer of residences for tourist use to residential use will be 6%, and higher especially in Madrid and Barcelona,” predicts Tolo Gamila, president of the Federation of Tourist Use Homes (Fevitur). While coastal properties or rural destinations might be visited for Spaniards in 2020 summer, urban destinations face a much more pessimistic scenario.

The owners of the touristic apartments in Madrid and Barcelona are aware that, after more than two months of confinement in their residences, Spaniards will not opt ​​for urban apartments to spend their summer holidays. For this reason, many have already given up part of the profitability provided by the touristic rental and decided to convert to long term.

In Madrid, touristic apartments represent only 0.74% of the rental market. Already this month, 9% of holiday flats have stopped advertising themselves in the city, while Fotocasa has noticed a 10% increase in the supply of rentals. “Everything seems to indicate that indeed, a good part of these flats proceeds from the touristic rental”, point out Fotocasa.

Others, instead of renting, they might choose to sell the property, depending on the personal situation. Therefore it will be noticeable an increase in sale stock during the next months.

The president of Apartur, Enrique Alcántara, explains that the tourist license is paid only once, so that, according to current regulations, although these tourist apartments are offered for a few years as residential homes, they will not lose the possibility of returning to the tourist business when end their contractual obligations. “Public administrations should not modify this regulation, because it would pose a threat to the holders of tourist licenses and could curb their intention to temporarily turn the apartments over to the residential housing stock.”

This type of contract will be fuelled by the launch of a new type of demand, explain from Wires: “Workers from other provinces with temporary contracts in Madrid and the population of Madrid who for some reason need another home (family, due to divorces or sanitary separations). The fact that the hotels are also not open is helping this demand to go towards this type of accommodation. “