A Spanish resort popular with British tourists has agreed a €350 million (£300 million) compensation plan aimed at avoiding bankruptcy. Benidorm, a coastal city on the east coast of Spain, is expected to welcome 900,000 British tourists in 2024, with British travelers often overtaking domestic tourists as the region’s largest holiday maker group. The seaside town is battling an ongoing legal battle with landowners who were shortchanged in a handover deal 20 years ago; However, the decision of the Valencian Supreme Court ordered that compensation be paid.
A family of developers agreed to transfer their land to the city in the early 2000s in exchange for development plots. Local authorities failed to follow through on the agreement, leading the Marcia Puchades family to take the case to court. Benidorm later agreed to pay €350 million and a first installment of €60 million (£50 million) before the end of the year to avoid bankruptcy, with the entire obligation more than double the city’s budget.
Mayor Tony Pérez said the city would be able to honor the sentence “without being ruined” and “without raising taxes or cutting services.”
The entire amount was given to local authorities in February, to be repaid within 12 years at an interest rate of about 3.5%.
There were also fears that the threat of bankruptcy could force Benidorm to cut the budget for essential leisure services, including beach cleaning and road safety.
Data from HOSBEC, the hotel and tourism business association of the Valencian Community, showed that tourists coming to Benidorm from the UK accounted for 42.5% of all travelers staying in the city’s hotels in 2025.
In comparison, Spanish visitor numbers were up 38.6%, with HOSBEC describing the UK as the “undisputed leader” during its 2025 hotel results in January.
