For two decades, Miguel has run one of the biggest hotels in Mallorca for holidaymakers on all-inclusive packages. But never has he been so angry and disappointed with his British guests. During a typical year, Miguel welcomes 9,000 British visitors, and many more from Germany and the Netherlands.

Two years ago the hotel, popular in Thomson and First Choice brochures, had just a couple of complaints for gastroenteritis (aka Spanish tummy). But last year Miguel was hit by around 200 claims alleging food poisoning. Every single one was from a British holidaymaker, with not a single complaint coming from the Germans or the Dutch. None of the Brits complained to the hotel at the time; all the claims were lodged by UK claims management companies once the holiday-makers returned home.

Miguel’s hotel has fallen victim to the epidemic of holiday-sickness claims that has begun to rival bogus whiplash claims in both their prevalence and resulting price tag. British claims firms, many of whom once wooed motorists and their passengers with offers of big payouts for whiplash injuries, have turned their attention to UK holidaymakers, encouraging them to claim compensation for food poisoning.

The specific targets are those tourists on all-inclusive holidays, as it is easier for the claims companies to successfully sue a hotel that is responsible for all the meals its residents eat.

The problem is so acute that last week tour operators warned that this summer could signal the beginning of the end of the much loved all-inclusive holidays, with the threat of a possible ban by hoteliers on British tourists.

Miguel, which is not his real name as he would only speak on condition of anonymity for himself and his hotel, says that hoteliers in Spain are “angry and disappointed” by the claims.

“We feel we have no defence because the law is so difficult. It should be the guests who have to prove that they were sick, not for us to prove they were not. They don’t even need to see a doctor to put in a claim.”

Inma Benito, president of the Federation of Mallorca Hotel Businesses, said that false claims cost hotels on the Balearic island €50m last year and that cases had soared by 700% since 2015.

It is not just in Spain where claims numbers have ballooned. Last week the Foreign Office warned of an increase in gastric illness touts in Turkey and Bulgaria and the Cypriot hotel industry said it had been hit with a £5m bill as a result of fraudulent poisoning claims.

Zacharias Ioannides, who heads the island’s association of hoteliers, likened the practice to organised crime, saying it was an exclusively British phenomenon. “It is always after the so-called event and sometimes it can be as long as three years before the bogus compensation claim lands,” he told the Observer from the organisation’s headquarters in Nicosia. “Action must be taken to safeguard the good name of the vast majority of British tourists.”

Britons make up almost half of the 3.2 million tourists who visit Cyprus annually. Marios Tzannakas, a senior official at the Cyprus Tourism Organisation, admitted that many in the industry were becoming increasingly angry and frustrated. In a tourist-dependent economy like that of Cyprus, the sector was effectively hostage to the tour operators behind the all-inclusive packages where the bogus claims were almost invariably observed. “You cannot argue with them because it is they who bring the tourists,” said Tzannakas.

But the problem in Spain is particularly acute. Agents for British claims management companies openly tout for business in Spanish resorts, telling tourists they can claim £3,000 a head with an allegation of food poisoning at an all-inclusive hotel, often following a package trip that cost only £500. Some holidaymakers are told that all the proof they need is a receipt for a packet of Imodium, the diarrhoea-relief medication, from a pharmacist in the resort.

An ambulance emblazoned with the words “Claims Clinic” was last year pictured touring around the Spanish island of Tenerife, allegedly parking outside hotels and medical centres. The side of the vehicle reads “Claim today – ask for details”.

The authorities have started to act. Earlier this month police arrested one Briton in Alcudia and questioned another on suspicion of involvement in the fraudulent claims. The Guardia Civil said in a statement that the action was part of an investigation into false claims of food poisoning, adding that the pair were suspected of working for a claims company and touting for business in tourist areas.

“Everybody is now trying to get evidence that the claims made against their hotel are connected to the people who were detained,” says Miguel.

In Britain, the travel trade organisation Abta last week launched a campaign, Stop Sickness Scams, urging the government to close a “legal loophole” which it says is encouraging lawyers to sign up people to insist they were ill even if they were not.

Anybody typing “holiday sickness” into Google is now met with a flood of claims companies offering no-win, no-fee services.

SickHoliday.com describes itself as “the UK’s leading holiday sickness claim experts”, running adverts on 130 radio stations telling holidaymakers that “if your scenic view was the bowl of the loo”, then they should put in a claim.

Set up in 2014 by Richard Conroy, it had a turnover of £3m last year and says it made a profit of £350,000. Claimants typically receive around £1,500 while the solicitors who handle the cases earn around £2,000 per file after costs.

Conroy says he has “fought tirelessly” to bring fraudulent solicitors and claims-management companies to book. But he says suggestions that most claims are bogus are untrue.

“The Claims Management Regulator and the Ministry of Justice say there are around 35,000 claims for holiday sickness per year. They admit that 25,000 of those claims are honest, legitimate and straightforward. The majority, then, are not fraudulent. From our point of view, Abta’s crusade against claims doesn’t address the real issue – and that’s that certain resorts, due to a lack of hygiene, are making scores of people unwell every year.

“The only reason that there has been growth at all is because there’s greater awareness that holidaymakers can claim when they’ve been made poorly. The reality is gross negligence, putting people into hotels which are serving unhygienic food that is unfit for human consumption.”

But tour operators and hoteliers are hitting back at claims. Professor Jaime Campaner Muñoz, a solicitor acting on behalf of Spain’s Federation of Majorcan Hotels, said: “We will be seeking convictions against anyone who is involved in these fraudulent claims.”

In the UK, the Solicitors Regulatory Authority told the Observer that it has been passed a file by the Ministry of Justice on 21 law firms involved in holiday-sickness claims where there are suspicions that rules regarding touting for business have been broken.

The Queen’s speech last week also promised a crackdown on bogus whiplash claims on car insurance, raising the possibility that this could be extended to tackling false-sickness allegations.

Ramón Estalella, the secretary general of the Spanish hotel owners association, flatly dismissed talk of a ban on selling all-inclusive deals to British tourists, arguing that such a move would be both illegal and counterproductive for hoteliers.

But he warned that some individual hotels might decide to close their doors to British visitors. “There’s no ban whatsoever, but there is the risk that some individuals who can’t come to an agreement with the tour operators may say, ‘Look, if you can’t guarantee that I won’t have to pay out for false claims, then I can’t sell to the British.’”

Marios Tzannakas, in Nicosia, said that a solution to the problem lies in British law. “Legislation related to consumer protection clearly needs to be amended. It cannot be that 500 people will eat from the same buffet but only the British will get food poisoning and suffer from diarrhoea.”