When a city limits rentals but tourist demand keeps climbing, the result is a real estate reshuffle with long-term consequences—and that’s exactly what’s unfolding in Valencia, Spain. With fresh restrictions on short-term rentals and no space left for new hotels in the historic center, the capital of the Túria is facing a paradox: booming tourism and a deepening accommodation crunch.
Valencia’s Hotel Supply Falls Short
According to the hotel association Hosbec, Valencia currently has around 22,000 hotel beds. That’s not nearly enough. Real estate consultancy KN Elite estimates the city needs at least 10,000 more hotel beds to keep up with its growing stream of visitors. Other firms back up this number, warning that the shortage could affect not just the travel experience but also urban livability and investment patterns, reported Levante.
“Valencia’s city center has run out of room to accommodate new hotels,” says Romik Asatryan, director of K&N Elite Valencia. “Open spaces are practically nonexistent, and many of the historic buildings are protected.” That makes transforming properties into tourist accommodations especially difficult, even before navigating the city’s tightening regulations.
Rental Caps Push Hotels to the Edge
In January 2025, Valencia’s City Council passed new ordinances capping tourist apartments at just 2% of the housing stock per neighborhood. Areas already beyond 8% tourist use—like El Carmen, Russafa, and the blocks near Estación del Norte—can no longer issue new hotel licenses. These restrictions aim to cool the pressure on local housing markets, but they’re also pushing developers and investors to look beyond the center for new opportunities.
As a result, hotel investment is now targeting emerging zones such as Malva-rosa Beach, the new Turianova development, the area around La Fe Hospital, and the Nuevo Centro shopping district. These areas offer more flexible zoning, competitive property prices, and room to grow—literally and financially.
Boutique Options Still Thrive Downtown
Despite the squeeze, new projects in the city center aren’t completely off the table. On May 19th, the One Shot hotel chain will open One Shot Puerta de Ruzafa, its fourth property in Valencia. Located next to the city’s historic bullring at the intersection of Colón and Russafa Streets, the boutique-style hotel will offer 92 rooms. It joins the company’s other central properties near City Hall (Reina Victoria), the central market (Mercat), and Colón Street.
This expansion bucks the broader trend, highlighting that while large-scale hotel developments may be shifting to the city’s periphery, high-demand boutique options can still carve out space in prime locations—albeit with more regulatory hurdles and creative use of space.
The Tourist Economy’s Real Estate Ripple Effect
As tourist numbers soar, investors are recalibrating. “The investment appetite is there, but the focus has changed,” says Asatryan. “People are no longer just looking for prime locations, but rather assets with potential.” In practice, that means buying buildings outside the traditional tourist zones—especially those that can legally be converted into hotels or regulated tourist accommodations.
With residential rentals under pressure, acquiring assets for regulated tourist use has become not just viable, but desirable. The mismatch between hotel capacity and tourist volume has made hospitality a rare commodity in the city’s evolving real estate market. And for now, it seems that demand will only continue to rise—regardless of how tightly Valencia limits rentals.
