The revolting-smelling invader - Rugulopteryx okamurae - is understood to have arrived from Asia in the ballast tanks of cargo ships.
The brown gunk has spread along Ca&ntilde;os de Meca beach in the southern Spanish province of Cadiz, making it unusable for holidaymakers and visitors.
Spain is the most popular holiday destination for Brits,&nbsp;with an estimated 16.5million visitors in 2022.
Now hotel owners have complained many are cancelling their bookings due to the noxious niff caused as the algae decomposes.
It began arriving a few years ago, but blooms of it have increased massively owing to rising sea temperatures.
Eco expert Lola Yllescas of Verdemar Ecologists in Action said the problem was spreading along the coast and Gibraltar Strait.
She added: "It has affected bathers. It is a significant danger, but no one has taken it seriously until people have not been able to even get into the water due to the amount of algae there is."
No creatures native to the area like to eat the smelly gunk, so it can spread rapidly.
Local fishermen have also been hit by the invasion as the algae gets tangled in their nets.

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{{magzter}} is the World's largest and fastest growing self-service, cross-platform digital newsstand with over 87 million users since its inception in 2011 and thousands of magazines and newspapers across 40+ categories and 60+ languages. Headquartered in New York, Magzter has its local presence in Amsterdam, London, Mexico City, Chennai, Mumbai, New Delhi, Bengaluru, Singapore, and will soon be expanding to other countries. Founded by global entrepreneurs, Girish Ramdas and Vijay Radhakrishnan in June 2011, Magzter enables magazine and newspaper publishers around the world to create and deliver digital editions of their titles to global consumers.