Spain’s short-term rental crisis has worsened, and protests against mass tourism have become almost routine in the country’s largest cities. Against this backdrop, parts of India’s outbound travel market are seeing a marked drop in demand for Spain as a destination, which until recently seemed to be one of the fastest-growing in Europe.
A cancelled booking as a reflection of a structural shortage
An Indian MBA student studying at one of Spain’s top business schools planned to spend spring break in the Basque Country. However, a few days before the trip, the guesthouse owner in San Sebastián suddenly cancelled the reservation; alternative options turned out to be either several times more expensive or already unavailable. As a result, the student stayed in Madrid. This case, far from an isolated incident, clearly illustrates how tighter rental rules and strained relations with local residents are forcing Indian travellers to rethink their plans for Spain.
Protests, an Airbnb crackdown and court rulings
In Barcelona, Seville and a number of other cities, residents’ protests have not let up since 2024, with locals directly attributing rising rents to mass tourist flows. Spanish authorities have moved from words to action and ordered Airbnb to remove more than 66,000 listings that did not comply with national regulations. The main complaint concerned a lack of clear information about property owners. In parallel, a Madrid court issued a separate ruling ordering the immediate removal of another 5,000 illegal listings.
Two sides of the same problem
The shortage of affordable accommodation is increasingly hitting mid-budget travellers. A shrinking supply amid consistently high demand is driving prices up in popular destinations, and finding an available room during peak season is becoming next to impossible. Pickyourtrail co-founder Hari Ganapathi notes: “A trip to Spain now requires much earlier planning, primarily due to limited accommodation availability, which has become a far more acute problem.”
In addition to the housing shortage, tourists are facing growing local resentment. Residents link rising rental rates to an influx of visitors and increasingly see tourists as a factor that makes everyday life prohibitively expensive. Rajiv Mehra, Secretary General of the Federation of Associations in Indian Tourism and Hospitality, puts it bluntly: “Locals consider tourists the main reason rents are rising and find them unaffordable. Travellers avoid places where they feel unwelcome.”
A 60% rise and a sharp slowdown
According to Spain’s tourism board (Turespaña), more than 226,000 tourists from India visited the country in 2024, representing growth of over 60% compared with 2022. However, fresh market signals point to a trend reversal. Tavleen Bhatia, Chief Marketing and Revenue Officer at Cleartrip, said that during this year’s pre-monsoon season, bookings to Spain fell by 32%. Negative media coverage around tourism and accommodation problems, market participants believe, could significantly slow further growth.
The mid-market is shifting to new destinations
Travellers focused on value for money are increasingly turning their attention to Georgia, Romania, Serbia and Sweden. These destinations offer a rich cultural experience on a noticeably smaller budget. More cautious spending is also influencing the redistribution of demand: parts of the market are recording a decline in disposable income among potential travellers.
High-end travellers aren’t abandoning Spain
Affluent travellers continue to choose the Iberian Peninsula with undiminished enthusiasm. According to SOTC Travel President Nandakumar, despite tour prices rising by 7–10% year on year (YoY), interest remains steady. A typical 9-night/10-day itinerary is priced at around 290,000 rupees per person. Wealthy clients opt for tailor-made programmes that include visits to wineries in La Rioja and Ribera del Duero, football stadiums in Madrid and Barcelona, and Ibiza’s nightlife. Demand is growing for boutique hotels, luxury villas and historic residences: a shift toward slower, more thoughtful travel in the region is taking shape.
Indian gambling enthusiasts
In addition, affluent Indian tourists are choosing casino tours in Spain. India has a fairly developed online gambling segment, but it is aimed mainly at budget and mid-range customers. Most online casinos for real money offer the option of low minimum bets and are generally designed for a mass audience. That is why affluent players are looking for a more varied, more prestigious experience abroad.
For wealthy travellers from India, a trip to European casinos is associated with an elite lifestyle—something like a “status symbol.” This is especially true of Spain, where casinos are often housed in historic buildings and offer truly luxury-level service. The cultural dimension is also important: in Indian business circles, gambling in moderation is often seen as part of networking and entertainment among a close-knit group. Abroad, it is easier and more socially comfortable to do so.
The paradox of booking lead times and the visa processing window
Accommodation problems are forcing some tourists to start planning much earlier than usual. However, Thomas Cook India is seeing the opposite trend among its clients: the booking window has shortened to 1.5–2 months thanks to faster visa processing. Typical spend among the company’s clients ranges from 200,000 to 300,000 rupees per person, most often with stays in four- or five-star hotels or at premium resorts.
Málaga, Ronda and Segovia instead of overcrowded Barcelona
A notable shift in recent months has been growing interest in Spanish cities and regions beyond the classic tourist trail. According to Thomas Cook India’s observations, more and more travellers are choosing Málaga and the Costa del Sol in Andalusia, as well as Ronda and Segovia. This process can be seen as a natural dispersal of tourist flows to less crowded destinations, which is likely to continue until pressure on the major hubs eases.
