See also: Best beach holidays for 2017
According to a report in the Independent, law firm Rogers & Co acts on behalf of the insurance industry, and said that Spanish hotels could increase the price of these traditionally low-cost holidays, or scrap them altogether.
Spanish hotels say they feel they are being "taken hostage" by British holidaymakers who make fraudulent sickness claims to profit from compensation.
According to Travel Weekly, David Diez Ramos, of Roger & Davis, said: "Sooner or later Spanish hotels will increase the price or stop selling all-inclusive to Britons.
"British citizens are paying less than £1,000 for a two-week all-inclusive holiday, receiving £2,000 to £3,000 for a claim and you can add £5,000 in lawyers' fees. Hoteliers will move from this sort of holiday."
The company added that all of their sickness claims come from Britons, encouraged to lie by 'rogue companies' looking to make fast cash.
Rogers & Co partner Marie Rogers said: "Hoteliers will pull out of low-cost all-inclusive holidays sooner or later.
"The tour operators' underwriters have stopped underwriting the business. We're angry because there is very little we can do in Spain. The legal fees are crippling.
"The rules have to be tighter. We have [UK claims management company] people camping out at the airport."
The Independent reports that the Foreign Office updated its travel advice to Spain to warn against making fraudulent gastric illness claims. It said: "There have been reports of an increase in holidaymakers being encouraged to submit a claim for personal injury if they have experienced gastric illness during their stay. You should only consider pursuing a complaint or claim if you have genuinely suffered from injury or illness. If you make a false or fraudulent claim, you may face legal proceedings in the UK or Spain."
And tour operators have also warned of the risk. Thomas Cook CEO Peter Fankhauser told the Independent that these questionable claims are a "deeply worrying trend", which holidaymakers are "seduced into making by rogue companies which promise payouts of several thousand pounds".
He added: "If left unchecked, the actions of a minority will have a significant impact on the majority – honest people who save hard for their annual break.
"Companies have to recover the cost of these claims somehow. Sadly, that could mean the price of holidays going up."