Top 10 Spain Airbnb Markets to Invest

Spain’s charm continues to draw millions of visitors, and with over 42 million tourists in just the first half of 2024, the demand for unique, home-like stays is booming. For hosts and investors, this surge presents a golden opportunity in the Airbnb market. Whether you’re already a host or thinking about starting out, Spain’s diverse short-term rental terrain offers something for everyone — from bustling cityscapes to tranquil seaside escapes. 

This article uncovers the top 10 Airbnb markets in Spain, helping you make informed decisions to maximize your returns and create memorable guest experiences.

Why Spain for Your Airbnb Investment?

In 2024, Spain's real estate market is expected to reach $6.95 trillion, with the residential sector driving growth at an annual rate of 2.16%, projected to hit $7.57 trillion by 2028. Investors are drawn to Spain's competitive property prices and impressive rental yields, especially in cities like Valencia, Málaga and Seville, where yields range from 4% to 10%. The market benefits from low seasonality, ensuring consistent rental income. Additionally, Spain offers attractive incentives, such as mortgage rates starting at 1.8% and the 'Golden Visa' for investments over €500,000.

Considerations Before Investing in Airbnb in Spain

1. Ensure you understand the laws regarding foreign property ownership in Spain, including any restrictions or additional paperwork required.

2. Different regions in Spain have varying rules for short-term rentals. Research the specific requirements, such as registration, taxes and possible restrictions in the area you are interested in.

3. Analyze the demand for short-term rentals in different Spanish cities. Consider factors like tourist attractions, business hubs and seasonal fluctuations.

4. The success of your rental largely depends on its location. Proximity to major tourist sites, transport links and local amenities can significantly impact your rental’s appeal.

5. Evaluate the initial investment cost, including purchase price and any renovations needed. Also, consider ongoing expenses like maintenance, utilities and management.

6. Investigate average rental yields in the area to estimate potential returns. Compare these with other investment opportunities to ensure competitiveness.

7. Familiarize yourself with the tax obligations associated with owning and renting out a property in Spain, including income tax on rental earnings and local taxes.

8. Decide whether you will manage the property yourself or hire a property management company, especially if you will not be based locally.

9. Consider your long-term goals and exit strategy for the investment. This includes understanding the resale market should you decide to sell the property in the future.

Top 10 Spain Airbnb Markets to Invest 

1. Madrid

Madrid, Spain’s vibrant capital, is a city where tradition meets modernity, creating a magnetic pull for visitors worldwide. Whether it’s the royal grandeur of the Palacio Real or the lively buzz of Gran Vía, Madrid offers something for everyone. With a population of around 3.3 million, the city is always alive and draws over 10 million tourists each year.

Madrid is a top-tier Airbnb market with a strong score of 99, driven by high rental demand and well-managed regulations. Hosts must register their properties and meet specific safety standards, with new licenses restricted, especially in central areas, to balance tourism with local life. While investors should watch for moderate revenue growth and seasonal changes, Madrid's regulation makes it a dependable and welcoming choice for short-term rentals. Whether in the city center or neighborhoods like Malasaña, opportunities for success are plentiful.

Property earning potential

According to AirDNA, these are the statistics for Madrid,

• Average Daily Rate: $135.9

• Occupancy Rate: 63%

• Revenue:$17.2K /Annum 

2. Barcelona

The jewel in Spain's tourism crown offers a compelling case for Airbnb investors. Known to be the beating heart of Catalonia, isn’t just a city — it’s an experience. Every corner of the city, from the whimsical curves of Gaudí’s architecture to the sun-soaked beaches of Barceloneta, invites exploration. With a population of 1.6 million and welcoming over 12 million tourists yearly, this city is a top-tier destination for travelers worldwide.

Barcelona is a growing Airbnb market with a market score of 98, fueled by high rental demand, although revenue growth is moderate. The city's Airbnb regulations are strict, carefully balancing the preservation of its charm with profitable investments. Whether opting for a beachfront apartment or a Gothic Quarter abode, Barcelona’s diverse neighborhoods cater to various guest preferences. The consistent tourist influx ensures high occupancy and steady returns, but investors must navigate the stringent licensing requirements to succeed. 

Keep in mind that short-term rentals are to be banned completely by 2029, so current hosts should consider transitioning to mid or long-term rentals or exploring other markets with stable regulations.

Property earning potential

According to AirDNA, these are the statistics for Barcelona

• Average Daily Rate: $188.9 

• Occupancy Rate: 67%

• Revenue: $26.3K/Annum 

3. Valencia

Valencia, where old-world charm meets futuristic innovation, offers a unique blend of experiences for visitors and residents alike. Known for its avant-garde City of Arts and Sciences and the vibrant old town, Valencia is a city that pulses with energy. With a population of about 800,000 and drawing over 2 million tourists annually, it’s a city on the rise.

Valencia is a standout in the Airbnb market, boasting a high market score of 98 and strong rental demand. However, while the city offers great potential, investors should be mindful of moderate revenue growth, seasonal fluctuations and some regulatory hurdles.

While the short-term rental market is thriving, offering great investment potential, investors must navigate strict regulations, including mandatory registration, safety standards and specific restrictions in residential areas, like minimum stay requirements during peak seasons. Valencia's vibrant neighborhoods attract many guests and investors need to stay informed and compliant to avoid significant fines.

Property earning potential

According to AirDNA, these are the statistics for Valencia

• Average Daily Rate: $125.7

• Occupancy Rate: 63%

• Revenue: $14K/Annum

4. Seville

Seville, the vibrant heart of Andalusia, radiates a warmth that captures everyone who visits. The city's soul is alive in its towering Cathedral, the lively pulse of flamenco in the streets and its rich tapestry of history and culture. With around 700,000 residents, Seville draws over 3 million tourists each year, all eager to experience its renowned festivals and historic sites. It's a place where the past and present dance together, making Seville a consistently sought-after destination.

Seville is a highly appealing market for Airbnb investors, boasting a strong market score of 96, driven by a healthy rental demand and steady revenue growth. However, the city enforces moderately strict regulations, requiring property registration, zoning compliance, and occupancy limits. Property owners must obtain a license for short-term rentals, which involves providing detailed information and proof of compliance with local laws. Investors should be mindful of seasonal demand fluctuations and stay informed to ensure compliance and avoid penalties, making it essential to navigate Seville’s regulatory landscape carefully.

Whether it’s a charming courtyard apartment in the historic center or a modern flat in Triana, Seville’s rich cultural tapestry ensures that your property will be a hit with guests year-round.

Property earning potential

According to AirDNA, these are the statistics for Seville:

• Average Daily Rate: $167.8

• Occupancy Rate: 65%

• Revenue: $27.5K / Annum 

5. Málaga

Málaga, the gateway to the Costa del Sol, is a city that effortlessly combines beach life with rich cultural heritage. Known for its year-round sunshine, stunning beaches and a growing arts scene, Málaga attracts visitors who want the best of both worlds. With a population of approximately 580,000 and drawing over 4 million tourists each year, this city is a magnet for sun-seekers and culture lovers alike.

Málaga’s Airbnb market is thriving, with a perfect market score of 100, driven by high rental demand and strong revenue growth. The city’s historic charm and beachside appeal draw consistent tourist interest, making it an excellent location for short-term rentals. However, investors need to navigate regulations, including mandatory registration with the Andalusian Tourism Registry and obtaining a license. Adhering to these rules is important, as non-compliance can lead to significant fines. Managing these requirements and seasonality effectively will help maximize returns in this flourishing market.

Property earning potential

According to AirDNA, these are the statistics for Málaga

• Average Daily Rate: $157.6

• Occupancy Rate: 70%

• Revenue: $21.8K/Annum

6. Granada

Granada, nestled in the Sierra Nevada mountains, is where history truly comes alive. The city, home to the iconic Alhambra, attracts millions each year who are captivated by its blend of old-world charm and lively neighborhoods. With a population of around 230,000 and welcoming over 2.7 million tourists annually, Granada may be small, but it leaves a big impression with its stunning vistas and rich cultural heritage.

Granada is an attractive market for Airbnb investors, boasting a high market score of 99, with strong rental demand and seasonal appeal. The city’s rich history, vibrant student life and proximity to skiing make it a top destination, keeping properties in demand. Whether you’re looking at a charming Albaicín apartment or a modern flat near the university, Granada’s cultural and natural beauty enhances its appeal.

However, investors must navigate strict regulations, including property registration, safety standards and restrictions on renting entire homes in certain areas. Staying compliant is crucial to avoid fines and ensure success in this thriving market.

Property earning potential

According to AirDNA, these are the statistics for Granada

• Average Daily Rate:$128.7 

• Occupancy Rate: 55%

• Revenue: $16.8K/Annum

7. Palma de Mallorca

Palma de Mallorca, the sun-drenched capital of the Balearic Islands, is a paradise for beach lovers and culture enthusiasts alike. With its stunning Mediterranean views, historic architecture and lively nightlife, Palma is a year-round destination that attracts a diverse international crowd. The city, home to about 420,000 residents, now sees over 16.5 million tourists each year, drawn to its unique blend of relaxation and excitement, contributing to concerns about overtourism on the island.

Palma's Airbnb market is performing well, with a market score of 76 and strong rental demand. However, investors should be aware of moderate revenue growth, significant seasonality, and strict regulations, particularly in multi-family buildings where new licenses are not being issued. Non-compliance can result in fines of up to €400,000, so it's important for investors to thoroughly understand and adhere to local laws to ensure successful and legal operations.

Despite tighter regulations to preserve the island’s charm, Palma remains a top choice for Airbnb investments. High demand, especially in summer, ensures strong occupancy rates and attractive returns. Whether you’re eyeing a seaside villa or a historic townhouse, Palma’s enduring appeal makes it a solid option for investors.

Property earning potential

According to AirDNA, these are the statistics for Palma de Mallorca

• Average Daily Rate:$219.2 

• Occupancy Rate: 61%

• Revenue:$20.5K /Annum

8. San Sebastián

San Sebastián, with its world-famous cuisine, beautiful beaches, and vibrant cultural scene, is a city that knows how to charm its visitors. Located in the Basque Country, San Sebastián is a haven for foodies and beachgoers alike, making it a unique and desirable destination. With a population of around 185,000 and welcoming over 1.7 million tourists annually, this city is small but mighty when it comes to tourism.

The Airbnb market in San Sebastián is evolving, with regulations tightening in some areas, but the city’s strong demand ensures it remains an attractive investment. San Sebastián's Airbnb market is performing well with a market score of 77, driven by decent rental demand. Whether it’s a beachfront apartment with stunning views or a cozy spot in the city center, San Sebastián’s combination of natural beauty and cultural richness guarantees that your property will be a popular choice for visitors year-round.

Property earning potential

According to AirDNA, these are the statistics for San Sebastián

• Average Daily Rate: $233.1 

• Occupancy Rate: 60%

• Revenue: $28K/Annum

9.Córdoba

Córdoba, a city steeped in history and culture, is known for its stunning architecture, including the world-renowned Mezquita. Once the capital of a powerful caliphate, Córdoba has successfully blended its rich heritage with modern attractions, making it a magnet for tourists. With a population of about 325,000 and drawing over 1 million visitors annually, the city offers a unique combination of tradition and contemporary appeal.

Córdoba's Airbnb market is strong, with a market score of 84, driven by moderate rental demand and revenue growth. However, investors must navigate important regulations, including mandatory property registration with the Andalusian Tourism Registry and compliance with safety and quality standards. Zoning restrictions may also limit where short-term rentals can operate. Non-compliance can result in fines, so staying informed is essential to maximize returns in this culturally rich city.

Property earning potential

According to AirDNA, these are the statistics for Bilbao:

• Average Daily Rate: $156.9

• Occupancy Rate: 50%

• Revenue: $16.8K/Annum

10. Alicante

Alicante, with its golden beaches, historic sites and vibrant nightlife, stands out as a gem of the Costa Blanca. Known for its sunny climate and welcoming atmosphere, Alicante attracts both domestic and international travelers, drawing over 1.5 million tourists annually. The city, home to around 330,000 residents, offers a perfect blend of relaxation and activity.

Despite Alicante's Airbnb market performing moderately with a Market Score of 50, driven by a rental demand score of 53 and moderate revenue growth of 46, it remains a strong investment option due to its consistent tourist appeal and strategic Mediterranean location. However, investors need to be mindful of seasonality and moderately stringent regulations. These regulations include mandatory registration with the Valencian Community Tourism Registry and adherence to specific guest and safety rules. Non-compliance can result in fines, making it crucial for investors to navigate the market carefully and adhere to local laws to succeed.

Whether you're considering a beachfront condo or a historic property in the old town, Alicante's enduring popularity makes it an excellent choice for investors in the Airbnb market.

Property earning potential

According to AirDNA, these are the statistics for Alicante

• Average Daily Rate:$308.7 

• Occupancy Rate: 59%

• Revenue: $17.5K/ Annum 

Pro Tip : Top areas in Alicante for Airbnb investment include Alicante Old Town, Santa Bárbara Castle, Explanada de España, Playa del Postiguet and San Juan Beach.

Why Spain is a Great Choice for Airbnb Investments

Spain offers a perfect mix of culture, beauty and solid financial opportunities, making it a top pick for Airbnb investors. Whether you're captivated by the vibrant energy of Barcelona or the serene charm of Tacoronte, Spain has a spot that fits every investor's dream. The country’s diverse locations let you choose between bustling city life or a peaceful getaway, depending on what you’re looking for.

To make things even easier, tools like Hostaway can help you manage your properties effortlessly, so you can focus on enjoying the rewards of your investment. With its endless appeal to tourists and a variety of opportunities, Spain is the ideal place to dive into the Airbnb market and watch your investment grow.