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Espacio vs. sitio vs. lugar

The Spanish words espacio, sitio, and lugar can all translate to the English concepts of space or room, but they emphasize different aspects of an available area. Generally, espacio focuses on physical volume or dimensions, sitio refers to a specific spot or availability for someone or something, and lugar broadly indicates a location, position, or a designated place.

Espacio

The word espacio refers to the physical dimensions, volume, or the actual emptiness of an area that can be occupied. It is used when talking about physical capacity, measurable area, or the distance between things.
No tenemos suficiente espacio en el coche para tantas maletas.
(We do not have enough room in the car for so many suitcases.)
Necesito hacer más espacio en mi disco duro.
(I need to make more space on my hard drive.)
Este escritorio ocupa mucho espacio en la oficina.
(This desk takes up a lot of space in the office.)
Deja un espacio en blanco entre cada párrafo.
(Leave a blank space between each paragraph.)
El nuevo apartamento tiene un espacio muy abierto y luminoso.
(The new apartment has a very open and bright space.)

Sitio

The word sitio generally means a spot, seat, or a specific location available for a person or object. It is frequently used in everyday language to ask if there is room for someone to sit, park, or fit into a specific confined area.
Guárdame un sitio en la primera fila, por favor.
(Save me a spot in the front row, please.)
¿Queda algún sitio libre para aparcar por aquí?
(Is there any free space to park around here?)
Ya no hay sitio en el autobús para más pasajeros.
(There is no more room on the bus for more passengers.)
Tenemos que hacer sitio en el armario para tu ropa.
(We have to make room in the closet for your clothes.)
Ponte en mi sitio y entenderás cómo me siento.
(Put yourself in my place and you will understand how I feel.)

Lugar

The word lugar is a broader term for a place, but when referring to room or space, it emphasizes a designated position, a location's purpose, or the rightful spot for something. It is slightly more formal than sitio and is often used in abstract contexts.
Tenemos que buscar un lugar para la nueva televisión.
(We have to find a space for the new television.)
En esta casa, cada cosa tiene su lugar.
(In this house, everything has its place.)
No hay lugar a dudas sobre su inocencia.
(There is no room for doubt about his innocence.)
Hicieron lugar en la mesa para un invitado sorpresa.
(They made room at the table for a surprise guest.)
Ese mueble está fuera de lugar en esta habitación.
(That piece of furniture is out of place in this room.)

Summary

In short, use espacio when you are talking about physical volume, dimensions, or capacity. Choose sitio for everyday situations when referring to a specific available spot, seat, or physical room to fit something. Opt for lugar when referring to a designated position, a proper location for an item, or when speaking abstractly about having room for a concept.