A couple of months into the pandemic in 2020, the Balearic Government set about introducing emergency measures to bolster the economy. There were measures for construction, one of which was the reactivation of a provision of the 2012 tourism law that contemplated the conversion of obsolete hotels into residential accommodation. That had been a failure; there were hardly any takers. In 2020, with tourism having ground to a halt and uncertainty as to what lay ahead, Mallorca’s hoteliers looked upon conversion with some favour. There
were stipulations though. Unlike the 2012 law, the conversion had to be at least 50% public housing. This was another failure. By the time of the 2023 election, not a single change of use had been processed. The current government decided to try again. Hotel conversion was one possibility under its emergency measures for housing. To date, and according to Council of Mallorca information, there have been five projects in all, none of them of any great significance. Together they have amounted to some 40
homes. An aspect of the latest effort was to turn hotels into co-living properties for workers in the hospitality industry. The government has now scrapped that as a pre-requisite. Conversion can be for housing under its limited-price scheme. The government is still hopeful there will be takers and that hoteliers may look again at conversion for housing workers deterred from coming to the islands because of the high rents. But experience suggests otherwise. Land values are one reason; returns from hotel activity are more profitable.
Cost of conversion is another. Hotels were designed as hotels not as residential homes. Structural modifications are obviously needed, and then there are issues with obtaining the necessary permits. A further reason is that owners of even the most obsolete of hotels might hope than an investor comes along and pays them handsomely to then convert the hotels not into residential accommodation but a superior hotel.
Mallorca, Balearic Government, hotel conversion, residential accommodation, housing emergency measures, 2012 tourism law, public housing, co-living, hospitality workers, rents