However, settlements in the area were small and it was not until the arrival of the Arabs that the local population began to grow during the era of the Umayyad dynasty.

Strategically, the town was also used by Bernat de Sarrià to stop the rising power of Admiral Roger of Lauria, lord of Altea, in the south of the Kingdom of Valencia.

The 17th century saw conditions improve for Benidorm and its people, most notably with the construction of an advanced irrigation system in 1666 to channel water to the region.

Coastal traffic increased too, bringing more wealth to the region with the town becoming a base for sea captains and the building of their vessels.

In 1952, Benidorm's fishing industry went into decline; this was a factor in encouraging the town council to approve many new development plans aimed at the tourist market.

[citation needed] In 2018, Benidorm became the first city to achieve the UNE178501 Smart Tourism certification, Its "Benidorm, Destino Turístico Inteligente y Sostenible" plan (2015–2020) focuses on integrating technology for sustainable tourism, including energy efficiency improvements, data-driven management, and citizen participation.

The city also established a Smart Destination Living Lab to align its strategies with the UN’s 2030 Sustainable Development Goals (SDGs).

As of the 2019 local elections, the political composition on the local council was the following:[10] In the 2023 election held on 28 May the results were:[11] The town is divided into five parts: Poniente (Ponent or 'sun setting') and Levante (Llevant or 'sun rising'), each fronted by a beach of the same name; the old town (also called El Castell); La Cala situated to the west side of Poniente; and El Rincón de Loix (or El Racó de l'Oix) situated to the east side of Levante.

In 1954 Pedro Zaragoza Orts, the then young Mayor of Benidorm, created the Plan General de Ordenación (city building plan) that ensured, via a complex construction formula, every building would have an area of leisure land, guaranteeing a future free of the excesses of cramped construction seen in other areas of Spain.

Benidorm's initial growth in popularity can be attributed to the package holiday explosion, and continues year round, due to the night-life based around the central concentration of bars and clubs.

The large number of free cabaret acts that start around 21:00 and continue into the early hours sets Benidorm apart from other similar cities.

The author and Guardian journalist Giles Tremlett identified the city as the birthplace of package tourism in the book Ghosts of Spain: Travels Through a Country's Hidden Past and remarked that culturally the city contradicted conservative notions of National Catholicism that General Franco had espoused.

[18] The accessibility of Benidorm to a wider social strata made the town into an ever so easy target for highbrow sarcasm, as by Jani Allan in the Sunday Times in 1990: "These days you just have to look at the numbers of wide-bodied jets bearing wide-bodied holidaymakers to Benidorm to realise that package holidays and airborne cattle trucks make fun in the sun accessible to everyone.

In 2020 a Spanish comedy series of the same name starring Antonio Pagudo and María Almudéver premiered on Atresplayer Premium.

[27] The École française Pablo Picasso, an annex of the Lycée Français d'Alicante, a French international school, is located in Benidorm.

The town hosted the 2008 Beach Soccer World Cup European qualification stages and the 2008 FIG Rhythmic Gymnastics World Cup Final The local football team was for 47 years Benidorm CF who played at the Guillermo Amor Municipal Stadium, until they folded in June 2011.