Mallorca to Overhaul Holiday Rental System with New Geolocation Technology, Get the Details Here

Published on November 29, 2025

For what has been termed a ‘disorder’ in the holiday market for the last 25 years, the Council of Mallorca is taking its most substantial efforts to date in addressing holiday rentals. Overseeing reforms for the optimisation of the renting of holiday homes is the tourism councillor José Marcial Rodríguez. Efforts attempt to regulate the complexities and challenges in the short-term rental market. The planned initiative includes the development of a novel digital coding system for the legal holiday rentals. It is aimed at changing the system of administration of holiday rentals on the Island.

The Challenge: Managing the Explosion of Holiday Rentals

The surge in short-term holiday rentals across Mallorca has raised concerns about over-tourism, local housing shortages, and the proliferation of illegal rentals. According to Rodríguez, the current system for managing these properties is outdated and inefficient, making it nearly impossible to track the growing number of legal holiday rentals, let alone monitor illegal listings.

“There has been no clear structure to identify and regulate holiday rentals for the past 25 years,” Rodríguez said. “This has allowed for the proliferation of unlicensed properties and created chaos in the market.” As tourism continues to drive the island’s economy, the need for a robust system to manage holiday rentals has never been more critical.

The New Solution: Geolocated Codes for Legal Rentals

To tackle the complexities of the holiday rental market, the Council of Mallorca has commissioned a technical study to design a new registration and tracking system for legal holiday rentals. The project, which has been put out to tender for €78,770, aims to create a unique, geolocated code for each registered property. This code will function as an “ID card” for holiday rental properties, allowing the Council to easily track and manage them.

The new system will use geolocation technology to map all registered properties, providing a comprehensive and up-to-date database that can be used by local authorities to monitor compliance with tax regulations and licensing requirements. By assigning specific codes to properties where illegal activity is detected, the Council will be able to take immediate action and track down non-compliant operators.

Benefits for Local Authorities and Tourists

The implementation of the geolocation-based registration system will offer significant benefits for both local authorities and tourists. For local governments, the new system will provide a precise, real-time map of all legal holiday rentals, making it easier to verify that properties are paying the appropriate taxes and operating with the correct licenses. This will also help ensure that the tourism sector remains accountable and sustainable in the long term.

For tourists, the new system will help distinguish legal, licensed properties from illegal ones, giving them more confidence when booking a holiday rental. By reducing the prevalence of unlicensed properties, the system will also help ensure that tourists are not exposed to unsafe or substandard accommodations. Additionally, tourists will benefit from improved regulations that can lead to better services and amenities in legal properties.

Addressing the Conflict Between Tourism and Housing

One of the key issues surrounding holiday rentals in Mallorca is the debate over their impact on local housing markets. Critics argue that the rise in short-term rentals is contributing to the shortage of affordable housing for residents. Rodríguez, however, is keen to separate the issues of tourism and housing. He emphasizes that holiday rentals are often blamed for housing problems, but he believes this is a misunderstanding.

In his view, the main issue lies in the lack of regulation and oversight, which allows unlicensed rentals to flourish. By introducing a transparent and efficient system for tracking legal properties, Rodríguez hopes to alleviate concerns about the impact of tourism on local housing markets. “Holiday rentals are being blamed for the housing problem, but that is a grave mistake,” Rodríguez said. He believes that with proper regulation, tourism can coexist with the housing market without exacerbating the issue.

The Limitations of Spain’s National Rental System

Rodríguez has also expressed concerns about the current national system for regulating holiday rentals, which is managed by the Spanish government’s housing ministry. While he acknowledges that the system has some merits, he believes it fails to properly address regional differences and challenges.

One of the main issues with the Spanish system, according to Rodríguez, is that it mixes tourism, housing, and registration without considering the specific needs of regions like the Balearic Islands. In Mallorca, holiday rentals are defined as properties rented for less than a month, and there is a clear distinction between tourist accommodation and short-term rentals. However, the Spanish system does not account for these differences, which has led to confusion and inefficiencies.

The current system has also resulted in the removal of perfectly legal holiday rental properties from online platforms because they are not registered in the national system, while unlicensed properties are granted “non-tourist” (NT) codes and can continue to operate as holiday rentals. Rodríguez argues that this system opens the door to fraud and creates a significant problem for legitimate operators.

The Future of Mallorca’s Holiday Rental Market

Regarding the more distant future, Rodríguez remains positive the new geolocation-based registration will change the holiday rental market in Mallorca. The Council hopes to enhance the quality of the tourism sector and combat the illegal activities by making the system more streamlined and efficient. The ultimate objective is to create a balanced and sustainable regulated market that satisfies the residents and the tourists.