You receive the electricity bill and it is much higher than expected: you check the bookings, run the numbers and discover that a stay during which the air conditioning was left on for most of the day has taken a sizeable chunk out of your margin.
It is more common than you might think because, in most cases, holiday rental utilities are included in the price of the stay and it is easy to lose track of them.
However, with a little planning, you can:
- Anticipate expenditure
- Detect unusual consumption
- Reduce costs without making guests feel they need permission to switch on the air conditioning
To help you achieve this and optimise your holiday rental income, we have prepared a short guide covering:
- How to manage electricity, water, internet and the other services in a tourist property.
- Which expenses you may be able to deduct and when it makes sense to delegate this part of the management.
Let us start at the beginning.
Which Utilities Does a Holiday Rental Need?
When we talk about holiday rental utilities, the list is not limited to electricity and water. You need to consider every service that makes a stay possible and creates a recurring cost for the property owner.
The main ones are:
- Electricity
- Water
- Gas, if the property uses it
- Internet and telephone services
- Hot water
- Heating and air conditioning
- Waste collection, where a specific local charge applies
- Communal services charged to the property owner
Some are essential for providing habitable accommodation. Others, such as fast internet or air conditioning, directly affect the guest experience and how competitive your listing is.
You should therefore see them not simply as bills, but as an important part of the service you provide.
A useful tip: prepare a simple spreadsheet containing the supplier, tariff, renewal date and average monthly cost of each utility. This will give you a clear view of your expenditure, help you spot price increases and allow you to respond sooner when something goes wrong.
Who Pays the Utility Bills for a Tourist Property?
In a holiday rental, the property owner will normally pay the utility bills and include them in the price of the stay. Guests book a complete experience and expect to use electricity, water, hot water and internet without receiving an additional bill afterwards.
This differs from a traditional long-term tenancy. Where services have individual meters, Spain’s Urban Leases Act establishes that the tenant is responsible for their cost. In a seasonal tenancy, the arrangement depends largely on what the contract states.
In a tourist property, you may set conditions to prevent exceptional consumption, but they must be clear, proportionate and communicated before the booking. You cannot simply add a generic charge afterwards because a bill seems high.
If you decide to set a limit, explain:
- Which consumption is included
- How it will be measured
- Which tariff will apply to excess use
- When the guest will be informed
- How the calculation can be checked
Before applying a surcharge, check the tourism regulations in your autonomous community, the relevant local bylaws and the terms of the platform through which the booking was made. There is no single national rule allowing every type of excess consumption to be charged in the same way.
You also need to distinguish between high use and unusual consumption. A family using the air conditioning during a heatwave may spend more than average without having used the property negligently, and charging them extra would not necessarily be reasonable.
How to Monitor Electricity, Water, Internet and Other Consumption
Monitoring does not mean watching your guests. It means understanding the property’s normal consumption so you can detect faults, leaks or tariff changes before they become a problem.
Start by calculating a monthly benchmark and, once you have enough data, compare it with occupancy. An electricity bill of EUR 180 may be reasonable during a busy month and very worrying if the property has been empty.
For a useful monitoring routine:
- Keep all bills in one shared folder.
- Record consumption, not only the amount charged.
- Note how many days the property was occupied during each billing period.
- Compare equivalent months, especially if the property uses heating or air conditioning.
- Review tariffs at least once a year.
- Set alerts where the supplier or distributor provides hourly consumption data.
Hourly information from the electricity distributor can help you detect peaks while the property is empty. With water, a meter that continues moving when there are no guests may be the first sign of a leak.
If you manage several properties, bringing incidents and tasks together in one system will save you a great deal of manual checking. Just as a channel manager centralises bookings and availability, a utilities register lets you see what is happening in every property.
Starting, Cancelling and Transferring Contracts
Before you begin letting the property, check that every contract is active and in the name of the person or company that should receive the bills. Do not wait until the first booking to discover that the electricity capacity is insufficient or that the router is still registered to the previous owner.
Check in particular:
- The contracted electricity capacity
- The tariff and its time bands
- The water flow and condition of the meter
- The actual internet speed
- Wi-Fi coverage in bedrooms and outdoor areas
- Fault-reporting and emergency telephone numbers
Cancelling a utility between seasons rarely pays if the property will be occupied again soon. Reconnection charges, waiting times and the risk of the service not being available in time may outweigh the savings.
Before transferring a contract, confirm with your adviser who should bear and substantiate the expense, especially where one person owns the property and a company manages it.
Meter Readings, Bills and Unusual Consumption
A good routine is to record a reading at the beginning and end of every month. If the supplier offers online access, download the consumption history as well.
This will help you detect situations such as:
- A toilet cistern that is constantly leaking
- A faulty electric water heater
- Air conditioning left on while the property is empty
- A tariff that is no longer competitive
- An unnecessary increase in contracted electricity capacity
- An old appliance using too much energy
You do not need to inspect every meter every day. You can set alerts and compare the figures with occupancy.
If consumption suddenly increases without any change in bookings, guest numbers or weather, investigate it promptly. Check the installation first before attributing the increase to guest behaviour.
Which Utility Expenses Can Be Deducted?
Water, electricity, gas, internet and telephone costs may be deductible for Spanish personal income tax purposes when they are paid by the owner, relate to the rental activity and are supported by the relevant invoice.
If the property is only rented for part of the year, the usual approach is to allocate the expense to the period in which it generated income. You should not automatically deduct consumption for months when you used the property yourself.
To substantiate holiday rental utility expenses, retain:
- Full invoices
- Proof of payment
- The occupancy calendar
- Supplier contracts
- Documentation for any charge passed on to a guest
Where you charge a guest a separate amount for electricity or water, it may form part of the income you must declare. At the same time, the expense you paid may be deductible if it meets the relevant requirements. Record both transactions instead of informally offsetting one against the other.
A personal income tax deduction should not be confused with a VAT deduction. They are different taxes and the rules depend on the services you provide. If the property is in the Canary Islands, you must also review the IGIC treatment instead of automatically applying mainland VAT criteria.
Our guide on how to declare holiday rental income explains deductible expenses and the records you should retain in more detail. No reliable English equivalent was found, so the original URL has been preserved for now.
Please note taxation can vary according to your circumstances, how the property is used and the services you offer. Discuss your case with a tax adviser before submitting your return.
How to Reduce Costs Without Harming the Guest Experience
Saving on utilities in a tourist property does not mean restricting hot water or leaving awkward instructions around the home. The most effective measures reduce consumption without requiring constant effort from the guest.
You can start by:
- Replacing bulbs with LED lighting
- Installing aerators on taps and showers
- Setting the water heater and climate-control systems correctly
- Improving insulation around doors and windows
- Choosing efficient appliances when they need replacing
- Scheduling air-conditioning maintenance
- Using presence sensors in circulation areas
- Installing systems that switch off climate control when a window is opened, provided they suit the property
You can also leave a short, friendly explanation about responsible energy use. Explaining why it matters works better than presenting guests with a list of prohibitions.
For example:
Using the air conditioning to maintain a comfortable temperature and avoid unnecessary consumption, we recommend keeping doors and windows closed while it is running.
When it comes to internet, choosing the cheapest tariff can lead to complaints, particularly if you host remote workers. Do not reduce the speed without first checking actual use and coverage.
The utilities in a tourist flat should balance three aims:
- A good guest experience.
- Predictable costs.
- Straightforward operations.
If a cost-saving measure creates more incidents or poorer reviews, it is probably not worthwhile.
When Does It Make Sense to Outsource Management?
Managing one property may seem straightforward until a fault, a check-in and an incorrect bill all arrive at the same time. With several properties, the workload multiplies.
Outsourcing may make sense when:
- You do not live near the property
- You cannot deal with incidents quickly
- You struggle to manage suppliers and maintenance
- You want to compare expenditure with occupancy and actual profitability
- You prefer to spend your time on other activities
- You need to coordinate utilities, cleaning, bookings and guest support
Professional management can detect abnormal consumption, coordinate repairs and prevent a small incident from affecting the next booking.
If you are still deciding which model best suits your property, our guide on how to manage a holiday explains the day-to-day work involved.
If you would rather forget about bills, incidents, bookings and coordinating suppliers, you can outsource the management of your property to Home2Book.
We will review the property with you and explain what you can delegate to improve its performance without losing visibility over what is happening.
