As a result of the recent actions by the Tourist Authorities of the Government of the Canaries, the following reply was received from the EU Commission Enquiry Service "Your Europe".  This outlines the laws, the challenge made in 2005 and the Spanish Government response.  The argument was that the law maintained standards of accommodation.  It is fair to say that the general standard of tourist apartments in the resorts here is poor.  Private accommodation in our experience offers a more personal level of service, higher standards of maintenance and higher quality of furnishings and decoration.

If you are affected by the Government's recent actions and wish to assist, please email and you'll be kept informed of any progress and options.

Text of the reply received from the EU:

In April 2006 the Commission withdrew its infringement proceeding against Spain based on the breach of article 49 of the EC Treaty (now article 56 of the Treaty on the Functioning of the European Union) by the Canary Islands Act 7/1995 on the Organization of the Tourism of the Canary Islands (Ley 7/1995, de 6 de abril, de Ordenación del Turismo de Canarias). This Act set forth two principles that bothered the Commission (i) the “principle of unity” whereby, in order to protect the tourist interests of the Islands, only a company is entitled to rent the holiday apartments when they are part of a residential complex or group of constructions, buildings or parts thereof, as a consequence, private owners are obliged to hire a real estate agency to rent their apartments, and (ii) the obligation of those companies to obtain the prior approval of the Canary authorities to carry out this tourist activity. At the end, the view of the Commission was that these conditions had a positive effect on consumers (they improved rent quality and reduced litigation) so its terms were proportionate and adequate to justify a restriction of the full application of former article 49 of the EC Treaty. It has to be added that this Act was modified by Act 14/2009 (Ley 14/2009, de 30 de diciembre, por la que se modifica la Ley 7/1995, de 6 de abril, de Ordenación del Turismo de Canarias) that adapted Act 7/1995 to the EU Directives on the free provision of services, concretely to Directive 2006/123/EC on services in the Internal Market that develops article 56 of the TFUE (former article 49 of the EC Treaty). In this context, Act 14/2009 has introduced many changes and the implementation of Directive 2006/123/EC seems to be largely achieved. Probably, the most important change with regard to the “principle of unity” is that now, in most cases, the companies that exploit tourist apartments do not need to obtain the prior approval of the Canary authorities (in the past, the prior consent was required), and just the notification to the competent authorities is required (article 24 of Act 7/1995, as amended by Act 14/2009). I hope you find this information useful. Best regards, Your Europe – Advice

Below are our arguments for why private rentals should be permitted:

Under the Canarian Law Act 7/1995 on the Organization of the Tourism of the Canary Islands (Ley 7/1995, de 6 de abril, de Ordenación del Turismo de Canarias) modified by Act 14/2009 (Ley 14/2009, de 30 de diciembre, por la que se modifica la Ley 7/1995, de 6 de abril, de Ordenación del Turismo de Canarias) the ability for private property owners to use their apartments or villas for "tourist" rentals is restricted to the point where it becomes almost impossible.

This was challenged by the EU commission in 2005 but by 2006 they had been satisfied by the Spanish Government's response, namely that the law protected the consumer by reducing litigation and improved rental quality.

Since the end of 2010, the Government has increased it's number of inspectors from 3 to 17 and are now, despite more or less ignoring for some 15 years the letting market declared illegal or clandestine, clamping down. Demands are being made of Communities of owners to furnish lists of proprietors (with seeming scant regard for the Data Protection Act (Ley de Proteccion de Datos). Owners are being interviewed and fined as a result of these infractions, and more shockingly, tourists staying in such lodgings are being interviewed or interrogated by the inspectors.

A case of note is the recent interrogation, on two ocasions, of an 89 year old belgian woman, with cardiac illness, by 3 Government officials. They attempted to quiz her on how she came to be in the apartment, where she lived, how long she was staying and what services she was being provided with. This despite the accommodation being arranged by her family and despite her obvious frailty. Is this anyway to treat guests in your territory?

The Canary Islands tourist numbers have been suffering over the past few years for a number of reasons. Firstly the recession has had it's impact and there is obviously less money in families pockets to allow for holiday expenditure. Other developing tourist markets have also opened up, for example Egypt, where prices are cheaper and the accommodation is typically newer. There are other possible reasons, perhaps the age of the accomodation in the Canaries - being typically built in the 1970s and 80s during the height of the "package deal", the often brusque and blunt nature of many of the staff working in the industry - many of whom are of a generation where the incoming tourists have been taken for granted and not had to have been fought for. Indeed, the problems in the market have risen to the point where a commission has been established in the tourist board to investigate why the loss in the market and what can be done to re-invigorate it.

So why does this clamp down on private rentals matter?

There are quoted as being 400,000 "illegal" beds and some 650,000 "clandestine" ones. Presumably these are offered on the market because there is a demand. If 1 million beds of any form are removed from the tourist market, what extra negative effect will this have on tourist numbers in the islands?

The role of independent tourism seems not to be understood in the islands. Historically the islands were served by scheduled airlines (Iberia for example) and the package/charter market. The latter charter market was sold as a complete tour package, flights and accommodation included. More recently, the low-cost airlines such as RyanAir, EasyJet, Air Berlin (amongst others) have opened routes into the island and the clients of these airlines will be seeking their own accommodation options. Much of this demand will be met by the private rental market and not by the big operators or hotel chains. For the Government to embrace the low-cost airline market without embracing the complimentary accommodation market makes no sense.

Many private apartments are offered by expats or foreign owners who use the income to suport the costs of ownership of a second, holiday home. Without the benefit of this income, owners will not be able to support their obligations to the Community of Owners which could put many Communities at risk. Further, if they are unable to continue to support their properties, their sale is inevitable. Taking the figure of 650,000 beds, with perhaps 2 to 4 beds per property we are possibly talking some 200,000 properties coming onto the Canarian property market. And what result the flooding of a market? Property prices will plummet. People will de-invest from the Canary Islands and invest in safer markets where they can reap benefit from their investments.

Of the tourists who are now coming into the islands, many are now being accommodated in all-inclusive hotels and accommodation. While it is good that this keeps the numbers of visitors up, little money escapes from these corporate giants. It is evident in the resort towns that the numbers of tourists eating and drinking in the smaller bars and businesses are down. Bars and restaurants are suffering as a result and closures of these businesses are evident and inevitable. Forcing more tourists into such accommodation will only exacerbate this problem.

The quality of accommodation in the Canaries resorts has always been an issue. Much of the building works was completes in the 1970s and 80s and is furnished simply and in the style of the era. Beds are typically singles, 6ft by 3ft - or if arranged as a double, simply pushed together. Facilities are limited with no kettle and water having to be boiled in a pan. Television is available as long as you feed the box with 1 euro coins every few minutes. This standard of accommodation is that regulated and approved by the authorities. Closing down the private market is removing a higher quality option from the prospective tourist. Most private lets are furnished with high quality modern furnishings and provide the extra luxury missing from the typical tourist lodging.

It appears that the Tourist Authorities of the Government of the Canary Islands are on a suicide mission to cripple not only the tourist market of the islands - and at a time when every visitor should be encouraged into the islands in whatever accommodation they choose, but also the property market as well as the bars and restaurants and other supporting businesses.

The more closely this law is examined the more it looks like a Government sponsored protection racket. The original arguments accepted by the EU Commission should be re-examined as they just do not hold water given the reality in the islands.