Benidorm and Salou, two of Spain’s most popular tourist destinations, are calling for a change in the funding system for tourist municipalities. They argue that their budgets don’t reflect the strain caused by the millions of visitors they receive each year, with both towns welcoming around three million tourists annually. This influx means their public services must cater to a population far exceeding their official census figures, a challenge exacerbated by a 20-year-old law that fails to address their unique needs.
Tourism’s Impact on Local Budgets
Salou, with a population of about 33,000, has seen its municipal budget increase from €46.7 million in 2021 to a projected €76.2 million in 2026, marking a 66% rise. This growth is necessary to manage the demands of a transient population that far surpasses the resident count. Spending on goods and services, such as cleaning, gardening, and maintenance, has also grown from €19.9 million to €33.1 million, reflecting the increased pressure on local infrastructure.
Benidorm, with 77,000 registered residents, faces similar challenges, compounded by a significant financial burden. The city must pay €350 million in compensation to former landowners of Sierra Helada, whose development was halted after the area became part of a natural park. This includes an initial payment of €60 million by year-end and allocating 8% of its annual budget for the next 30 years to cover the remaining debt, further straining its resources.
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Mayors Advocate for Funding Reform
The mayors of both cities are pushing for local funding reform that accounts for tourist activity and service costs. Salou’s mayor, Pere Granados, suggests municipalities receive a share of the VAT generated within their territories, a proposal aimed at directly linking local revenue to economic activity. Benidorm’s mayor, Toni Pérez, supports this idea, opposing a tourist tax as it would add to the burden on already taxed activities, potentially deterring visitors.
This call for reform extends to the eight members of the Sun and Beach Municipalities Alliance, including Adeje, Arona, Calvià, Lloret de Mar, San Bartolomé de Tirajana, and Torremolinos. These destinations attract 9% of foreign tourists and account for 19% of overnight stays in Spain, highlighting their significant contribution to the national tourism sector. Despite this, only Salou currently qualifies for specific tourist municipality funding, receiving €286,854 annually, a figure that pales in comparison to the costs they incur.
Need for an Updated Funding System
The alliance advocates for updating the 22-year-old funding system, which they say fails to address the costs of serving a growing and dispersed transient population. The demand on services like cleaning, sanitation, and urban maintenance exceeds resources based solely on resident census data, leading to a mismatch between needs and funding. They urge funding models that consider visitor-generated consumption and activity, ensuring that financial support is proportional to the actual demands placed on these municipalities.