Spanish hotel chain Melia buys housing for its workers as rents surge

By Corina Pons

MADRID (Reuters) - Spanish hotel chain Melia is buying property to accommodate seasonal workers who can't afford to rent in tourism hot spots as a housing crisis risks causing labour shortages in the country's tourism industry, its CEO Gabriel Escarrer said.

Melia, Spain's biggest hotel chain, has bought a former hostel on the Balearic island of Menorca and is looking to make further acquisitions in Ibiza and Mallorca as well as in the Canary islands and on the Spanish mainland to house its workforce during the summer high season, Escarrer said in an interview.

"Due to the boom in short-term rentals for tourists, finding an apartment for the season has become an Odyssey," Escarrer said, adding that paying employees well is no longer enough to retain talent.

"What we have done is make sure we have housing for our workforce."

A housing crisis in Spain caused by a sharp fall in new home construction since the 2012 property crash is being exacerbated by a short-term letting boom to tourists on platforms such as Airbnb.

Spain received a record 94 million tourists last year, with three out of 10 visitors choosing to stay in holiday homes rather than hotels, according to official data.

Buying housing is a radical solution for Melia, which in the past two years has been forced to accommodate some staff in hotel rooms to prevent them from quitting, Escarrer said.

But for many hotel owners, giving workers a home is not an option, Ramón Estalella, general director of Spain's hotels group CEHAT.

"Not everyone can afford (to provide) housing and a salary for their staff. It is not a widespread solution," he said.

Unions warn that hotel workers' salaries rose 3% last year while rents in Spain increased by an average of 11.5% in 2024, according to Idealista, a property listings website. In hot spots such as the Balearics residents have been forced to live in caravans due to rising rents.

"Wages are not rising like hotel margins and housing is a problem in tourist areas," said Jose Maria Martinez, a union leader for the hotel sector at CCOO.

In the Canary Islands, CCOO called for a two-day strike in hotels over the Easter week to demand better wages.

Local authorities in top tourist destinations have begun to restrict permits for holiday rentals while Barcelona and the Balearics have increased tourist taxes in response to residents' protests about mass tourism.

Escarrer said banning tourists from staying in holiday homes in city centres would also help preserve Spain's cultural identity, pointing out how La Boqueria market in downtown Barcelona has become overrun by tourists.

"Fifteen years ago La Boquería was ideal for interacting with the people of Barcelona and today the market receives tourists who only go there to take photos," he said.

(Reporting by Corina Pons; editing by Charlie Devereux and David Evans)