Spain beach resort agrees £300m plan to dodge insolvency - visited by 900k Brits

The seaside resort welcomes hundreds of thousands of British tourists each year (Image: Getty)

A Spanish resort popular with British tourists has agreed a €350 million (£300 million) compensation plan aimed at avoiding a collapse into insolvency. Benidorm, a coastal city on Spain's east coast, welcomed 900,000 British tourists in 2024, with UK travellers frequently overtaking domestic visitors as the region's largest holidaymaker group. The seaside city has been dogged by an ongoing legal battle with landowners who were shortchanged in a handover deal 20 years ago; however, the Valencian Supreme Court ruling 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 officials failed to comply with the agreement, leading the Murcia Puchades family to escalate the matter to court. Benidorm subsequently agreed to pay a settlement of €350 million and a first instalment of €60 million (£50 million) before the year-end in a bid to avoid insolvency, with the full obligation more than double the city's budget.

Benidorm City Council was ordered by the Supreme Court to pay compensation (Image: Getty)

The council previously asked the Spanish government for a € 55 million (£ 48 million) loan to stave off the risk of bankruptcy following the family's loss of building rights in the protected Serra Gelada Natural Park.

Local officials were granted the full amount in February, with repayment to be made within 12 years at an interest rate of around 3.5%.

It was also feared that the threat of insolvency could force Benidorm to slash budgets for essential holiday services, including beach cleaning and street security.

In comparison, the number of Spanish visitors made up 38.6%, with HOSBEC describing the UK as an "undisputed leader" during its 2025 hotel results in January.