An investor arriving in the Canary Islands with a plan to build a new resort usually meets the same wall: the moratorium. For years the islands have restricted new tourist accommodation, out of a recognition that parts of the coast were reaching, or had passed, the limit of what they could sustain. Understanding what the moratorium actually blocks, and what it leaves open, is the first thing any hospitality investor in the Canaries has to get right, because it determines whether a plan is possible at all.
Why the moratorium exists
The Canaries built a tourism economy over decades, and on the most visited islands the traditional resort zones filled up. The moratorium is the political and planning response: a set of limits, evolving over time and varying by island, aimed at stopping the uncontrolled addition of new resort beds to saturated coasts. It is not a blanket ban on all tourism development; it is a brake on a specific kind of growth, and the distinction matters enormously to an investor.
What it blocks
In broad terms, the moratorium makes new resort accommodation in the traditional tourist zones difficult to authorise, particularly lower-category capacity. The precise rules depend on the island, the municipality and the current planning instruments, which change, so no general statement substitutes for checking the specific site. But the direction is clear: adding new, standard resort beds to a saturated coast is the thing the regime is designed to prevent.
The moratorium did not stop investment in Canary tourism. It redirected it, from building new beds on the coast to improving the ones that exist and to the cities.
What it permits, and even encourages
The moratorium generally treats quality differently from quantity. Higher-category establishments, and above all the renovation and repositioning of obsolete existing capacity, are frequently permitted or actively encouraged, because they improve the stock without expanding it. This is the crucial point for an investor: the regime pushes capital toward upgrading tired assets rather than building new ones, which is why so much of the real opportunity is in repositioning, as we set out in our note on repositioning an old Canary resort.
The urban exception
Urban hotels, serving city and business demand rather than resort tourism, sit largely outside the saturation logic, because they are not adding capacity to an overbuilt coast. This is why the cities have become one of the more interesting entry points to Canary hospitality, a play we set out in our note on urban hotels in the Canary Islands. Where the coast is closed, the city can be open.
How it shapes the investment strategy
The moratorium turns the Canary hospitality market from a development market into a repositioning and quality market. An investor whose thesis depends on building new resort beds will struggle; an investor whose thesis is upgrading obsolete stock, moving up the quality ladder, or entering through the cities is working with the regime rather than against it. Combined with the tax incentives set out in our note on the RIC, that reshapes what a good Canary hospitality investment looks like, and it rewards investors who understand the constraint before they fall in love with a site.
Montclare structures and operates investments in the Canary Islands, from the ZEC and the RIC to hotel and real estate assets on the ground. Our services are set out on our services page.
This article is informational and does not constitute tax, legal or investment advice. The Canary Islands regimes have specific conditions and change over time; treatment depends on the facts. Each engagement is subject to scope and applicable regulation.