According to a study by a group of Italian researchers, holiday rental properties in Palma generate more income for their owners than any other Spanish city. Rent Economics indicate there is an average gross income of €48,100 per annum. Only Barcelona (€47,000 per year) comes close. Ibiza, with €41,500, is third.
The figures are based on data from analysts AirDNA and are drawn from Airbnb listings. They don't take account of whether lets are legal or not; apartment holiday lets in Palma are banned.
The study places Palma in the number-one spot despite demand being highly seasonal; the same goes for Ibiza. The high rates that can be paid during the main season more than compensate for the drop in tourism activity in the low season.
Ibiza has the most expensive average price per day, €276.11 (the annual average). Palma's is €229.36. The researchers say these prices "rival or exceed many luxury hotel markets in Europe".
"The power to set prices is greatest where tourism is most concentrated and property markets are tightest. For owners, the incentive to convert long-term leases into holiday rentals in these cities remains strong."
They add: "In cities with peak demand in the summer, homes can remain empty for much of the year, underutilised by both tourists and residents." Occupancy data tend to support this. Palma is fourth with an average of 70% behind Barcelona, Malaga and Madrid. Holiday rental properties in Palma, as in Ibiza, "earn enormous income during short peak periods, but remain virtually empty during the off-season".
The study concludes that "Spain is at a crossroads" due to its dependence on the tourism sector, and the researchers believe the data confirm that "regulation is no longer optional". "Control measures must go beyond fines and establish real limits and incentives for alternatives to holiday rentals."