Hidden costs: How much do La Palma holiday lets really earn?

Millions lost to booking platforms on La Palma

After more than twenty years of marketing tourist accommodation on La Palma, Ulrich Gütz Roth decided to answer a question that many property owners think they know the answer to, but few have examined in detail: how much money do they actually receive from each booking? The result of that analysis points to a conclusion with significant implications for the entire island. Between €3.4 and €4.8 million a year is failing to stay within the La Palma economy as a result of the commissions, discounts and intermediation models used by international booking platforms.

As managing director of 100 Árboles SL, founder of La Palma Travel and a professional with more than two decades of experience in the tourist accommodation sector on La Palma and over forty years of international experience in business management and direct sales, Gütz Roth presents ‘Your home. Your price. Your island’, an analysis that invites reflection on how much economic value actually remains in the hands of owners and the local economy after each booking.

A simple question with a stark answer

The work stems from a very simple question: how much money does an owner actually receive from each booking? According to Ulrich Gütz Roth, many owners know the price at which they advertise their accommodation, but are unaware of the amount they ultimately receive once commissions, discounts, promotional programmes and other costs associated with the booking have been applied.

To answer that question, the analysis combines official data from the Canary Islands Institute of Statistics (ISTAC), a study of the marketing mechanisms used by international platforms, documented real-world cases and more than two decades of professional experience in managing tourist accommodation on La Palma. One of its main findings is that, in documented cases, the difference between the initial marketing price and the amount the owner ultimately receives exceeds 40%.

A real case: €137 less on a single booking

One of the examples analysed concerns a tourist property on La Palma whose owner had set a price that would allow her to earn €400 for a weekly booking. After the application of commercial discounts, the platform commission and the costs associated with payment processing, the amount she finally received was €263. That €263 represents the amount the owner ultimately receives. From that figure, the business’s own expenses must still be deducted where applicable, such as cleaning, maintenance, utilities, replacement of equipment or taxes.

What amounts to an owner earning €137 less on a single booking, multiplied by the thousands of tourist properties and thousands of bookings made each year on La Palma, ends up having a direct effect on the entire island economy. This is money that is no longer paying for work carried out on the island, no longer contracting local services, no longer staying with La Palma businesses and no longer generating new economic opportunities.

The analysis makes clear that this situation is not the result of irregular practices, but of the normal functioning of certain marketing models and conditions that many owners do not fully understand until they examine the economic outcome of their bookings in detail.

Who really pays for the discounts?

Another aspect examined is how certain loyalty programmes used by international platforms work. These programmes offer discounts to repeat customers to encourage new bookings. The analysis documents that, in certain cases, those discounts are not absorbed by the platform but instead directly reduce the income the owner receives. The result is that the traveller gets a lower price, while the owner sees the final amount they receive for the same booking reduced. At the same time, the customer develops greater loyalty towards the platform from which they book, rather than towards the accommodation or the tourist destination.

The local work that is no longer paid for on the island

The analysis also focuses on the work carried out by local businesses that promote, advise on and manage tourist accommodation. These are the businesses that visit the properties, take the photographs, advise the owner, answer travellers’ queries and resolve issues before and during their stay. However, when a visitor discovers an accommodation thanks to that work and ultimately formalises the booking through an international platform, a large part of the value generated by that service no longer pays those who made it possible and instead becomes part of the platform’s business. The platform facilitates the booking; the local business makes the experience possible.

Taking back control of your own business

For Ulrich Gütz Roth, the aim of this analysis is not to pit owners against international platforms, but to provide information so that they can make fully informed decisions about the marketing of their properties. ‘Setting a price without knowing what you need net is not managing your property, it’s giving it away. The alternative is not to fight with the platforms, but to consciously decide who has control and take it back,’ he said. Every euro that stays on La Palma is transformed back into employment, services, property maintenance, contracting local businesses and investment in new projects. Tourism generates wealth. The question this analysis poses is simple: how much of that wealth actually stays on La Palma?

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