The Balearic Islands are ramping up their economic, technological, and human resources to combat illegal activities in the tourist rental sector. As enforcement efforts intensify and penalties increase, inspectors are uncovering what they describe as organised crime networks involved in holiday rentals. These criminal organisations have discovered a profitable niche in this sector, with a confirmed presence not only in the Balearic Islands but in other regions of Spain as well.
Investigations by inspectors from the Consell de Mallorca reveal that three buildings in Palma, which were fined nearly 2.5 million euros this summer, are linked to these criminal networks. In the first case, announced in mid-August, a total fine of 960,000 euros was imposed—80,000 euros for each of the 12 apartments in the building. In a second case, reported a month later, two additional buildings with ten and seven units were fined at the same rate (80,000 euros per unit), leading to a combined fine of 1.36 million euros.
New fines on the way
In all likelihood, these won’t be the last buildings fined this year. The Tourism Department of the government has identified additional buildings with similar illegal practices, and further interventions may be imminent. These cases typically involve networks that rent properties and then illegally sublet them without the owners’ knowledge.
According to José Marcial Rodríguez, the island’s Councillor for Tourism, the profile of these networks is consistent: they include individuals both from Spain and abroad. Rodríguez explains that the legal framework, combined with the evasive tactics of these offenders, requires meticulous evidence-gathering. “Our legislation is highly protective, but it’s also confusing, abundant, and often vague,” he states, noting that these criminal networks exploit these loopholes to continue operating even after being detected and fined.
Rodríguez describes these groups as “mafias with well-organised structures” that hide behind multiple companies, moving income between them. “They rent from each other, shift funds between companies… making it very challenging for investigators to track them,” he says, adding that “they exploit every legal loophole, fully aware of the slow pace of administrative procedures.” While efforts are underway to enhance control mechanisms, Rodríguez admits that eliminating these practices remains a considerable challenge.
Whether these networks are connected to similar groups identified in Catalonia is still unclear, though the possibility hasn’t been ruled out. Barcelona City Council has already identified around ten mafia groups involved in illegal tourist rentals, employing tactics similar to those observed in the Balearic Islands. These groups are believed to remain active in Barcelona, with around forty distinct groups identified over recent years.
The evolving complexity of illegal tourist rentals has led the Balearic government to increase funding for enforcement. Last week, the government announced that part of the Sustainable Tourism Tax (ITS) revenue would be allocated to combating this issue, responding to demands from island councils, which oversee tourism-related matters.
Hotel estimates
The hotel industry estimates that around 50% of tourist rentals in the Balearic Islands may be operating illegally. This figure, while approximate and difficult to verify precisely, can be reasonably inferred by analysing tourist arrivals and stays in licensed accommodations. Nonetheless, it is generally agreed that the illegal market likely doesn’t reach the 90% level suggested by former Housing Councillor Marta Vidal, who estimated that around 235,000 tourist rentals were unregulated. Although the hotel sector considers this figure somewhat inflated, it shares the broader assessment, especially regarding the challenges in controlling an activity that has surged beyond regulatory oversight in recent years.