Compiled with the help of artificial intelligence, based on Spanish-language information. Source below the article.
The Canary Islands government and hotel companies affected by the tourism moratorium have finally reached an agreement to close one of the longest-running economic disputes between the public and private sectors in the islands’ recent history. The pact allows for the payment of around half of the €1 billion claimed by companies, representing a “saving” of nearly €500 million for the regional treasury. Initial payments have already begun to be processed, according to sources close to the operation.
Landmark deal approved by the courts
The agreement – approved by the courts – brings to a close a conflict originating from restrictions on tourism growth introduced from 2001 onwards. Following successive regulatory changes and legal proceedings, these restrictions led to property compensation claims amounting to just over €1 billion. The pact reduces this figure by around 50%, meaning the regional government “saves” roughly half of the potential compensation payouts while also avoiding lengthy further litigation, which would have driven up interest payments and legal costs.
Government hails containment of public spending
The final understanding between the government and hoteliers culminates negotiations promoted by the current regional cabinet to contain, as far as possible, a bill with enormous potential impact on public accounts. The regional president, Fernando Clavijo, already admitted in Parliament that the government was working with owners of tourist establishments affected by the moratorium to reduce compensation below €500 million – a sum that remains more than burdensome for the archipelago’s finances. Indeed, €500 million equates to 4% of the latest regional budget.
Origins of the dispute
The root of the problem lies in that first moratorium, introduced between 2001 and 2003 during the administration led by Román Rodríguez. Its aim was to curb the growth in tourist accommodation places and “channel” the sector’s development through the General and Tourism Planning Guidelines – state intervention in the market in every sense. Years later, the 2009 Urgent Measures Law enabled owners of certain tourist land to request its reclassification as rural land and, consequently, claim compensation for the loss of planning rights.
Decades of legal battles
That mechanism led to dozens of cases. Initial applications exceeded fifty, and after years of administrative and judicial procedures, the conflict was narrowed down to 36 cases. Most of the affected land is located in the south of Gran Canaria and Fuerteventura, although there are also plots in Lanzarote and Tenerife. The controversy became entrenched and escalated because the reclassifications and compensations were not resolved within the expected timeframes. Owners turned to the courts, which forced the administration to process and resolve the cases, prolonging a dispute in which the sums at stake continued to grow over time until reaching that €1 billion figure – of which companies have ultimately agreed to forgo around half.
What the agreement means
The deal sees companies renounce just over half of the amounts claimed in exchange for ending ongoing court proceedings and receiving the other half of the sum demanded. The resolution of the conflict also removes uncertainty over projects that remained blocked for years and which, in some cases, can now be revived – albeit with construction and financing costs far higher than those that existed when they were first conceived.
End of an era for tourism policy
A quarter of a century after the controversial moratorium’s origins, initial payments to affected firms – including Satocan, Dreamplace and above all Lopesan – bring the curtain down on a matter of long-running business and political debate. The regional government faces a significant bill, but avoids paying out €500 million in accumulated claims and thus ends a sword of Damocles that had hung over public finances for years as a result of erratic tourism policy.
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