Tighter regulation is seeing a shift away from holiday lets in the region
A continued decline in holiday lets in the Balearics driven by stricter regulations in the sector is causing investors to look for alternative investment opportunities, with branded residences increasingly a focus.
According to Spain’s National Statistics Institute (INE), there were 3,057 fewer holiday rental properties in the Balearics in May 2026 than in May 2025 – down from 24,361 to 21,304. Meanwhile, the government claims to have removed more than 60,000 irregularly advertised accommodation places since taking office in 2023.
James LaVelle, managing director of estates and developments at IDILIQ Group, said: “Tighter home ownership regulations for foreign nationals are a key driver for this trend. Some of the most popular second home destinations have been introducing measures, such as higher taxes, in a bid to reduce interest from foreign buyers and make housing more affordable for locals.
“Earlier this year, the Balearic Islands government even suggested banning Britons from buying property in Mallorca, Menorca and Ibiza altogether.”
An attractive alternative
He said this shift was causing investors to seek other opportunities and that enquiries for branded residences that form part of a hotel had risen as a result. “These properties are categorised as tourist accommodation and won’t be affected by looming second home regulations, making them an attractive alternative to traditional second homes,” he said.
The company said it has witnessed a growing number of buyers with budgets of €300,000 or less who want to shift their focus from owning a second home abroad to branded properties over the last five years.
IDILIQ Group recently launched Wyndham Portocolom in the South East of Majorca. Previously an outdated hotel, it has been modernised and includes 110 modern and fully furnished branded studios, one- and two-bedroom apartments.
LaVelle said: “Majorca is one of Spain’s most-visited destinations but offers a surprisingly limited choice when it comes to affordable branded residences. We designed Wyndham Portocolom to provide an adequate solution that caters to the island’s tourism boom and gives investors the opportunity to generate a steady rental income.”
Properties at Wyndham Portocolom start from €198,000 and offer a 5% guaranteed rental return for the first three years. 40% of the development’s residences have already been purchased by pre-registered buyers.
