Magazine

Alicante is a province chosen each year by many tourists as a destination for their vacations. They are drawn by its attractive beaches and its friendly people. In addition, its tourism is not overcrowded in a single spot, as the center of Alicante might be, but is spread across other towns such as Javea, Calpe, Benidorm, etc.

Therefore, given such tourist demand, each year more tourist apartments appear, intended for vacation rental.

From 2011 to 2017, we can see in chart 1 a clear increase in tourist properties. Above all, 2016 was the year in which the most apartments were listed, thus becoming the year of greatest growth, with 2,944 more properties than in 2015. A total of 4,421 new tourist homes in operation in 2016.  

But in the latest year, 2017, this situation has stabilized, slowing the creation of new apartments, with only 1,759 more homes than the previous year, making a total of 6,108 new properties in 2017.  

This last year we can see more notably the increase in tourist apartments in the most central area of Alicante and in Cabo de las Huertas, as you can see on the map, with apartments that earn average annual income of between €18,000 and €38,000. Following this area is the north of the province of Alicante, especially in municipalities such as Denia and Javea, where there are apartments that reach average income of €91,000 per year.

On the other hand, we detect that over the years there is a clear trend that repeats: the second quarter of the year is the one preferred by these managers to publish new tourist apartments, followed by the third quarter. In 2017, in the second quarter alone, 1,995 new properties were created, 33% of the properties created that same year. 

Chart 1: Brickstarter

This large increase in tourist apartments could be alarming, but it puts reality into considerable perspective, since not all of these new listings remain active for long. That is why we see in chart 2 that in 2016 only 1,757 homes remained active out of the 4,421 that were newly created that same year. This is because managing tourist apartments is not that easy; behind all that money there is a great deal of work and effort by many professionals, as is the case of Brickstarter, a company that manages the tourist apartments launched on its real estate investment platform, where anyone can invest from €50 in this sector. 

Chart 2: Brickstarter

Therefore, next, we focus on looking more deeply at the apartments that show activity over time and we look at their proliferation through three variables: the total number of apartments that are active, their average occupancy and their income.

As we have already mentioned, the number of properties has been increasing in recent years, reaching a total of 12,565 active homes as of January 2018 in the province of Alicante. But as the number of apartments rises, their occupancy and income also rise, even though new tourist apartments are appearing.

This is because, at the same time, tourist demand is also increasing, with growth in tourism in Alicante that needs to be met. We can see this reflected in chart 3, where occupancy in the third quarter of 2016 was 27.38% compared with 39.32% in 2017. We are facing an increase of almost 12 percentage points (from 27.38% to 39.32%). In addition, we can see that income also rises from one year to the next, with average monthly income in the third quarter of 2017 of €2,059 compared with €1,410 in 2016. Therefore, in this sample, the appearance of new apartments has not, so far, reduced occupancy or average income. As we can see in chart 3, the comparison of 2016 with 2017 shows a rising proliferation in the three variables analyzed. 

Chart 3: Brickstarter

In short, although the figures may be alarming when we see the increase in tourist apartments in Alicante, and there is economic and social unease on the part of the hotel sector and institutions, it should be said that the number of homes is rising in step with the increase in tourism in Alicante, covering the occupancy demand that the rest of the accommodation cannot satisfy. 

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