Not Being Paid A Complement (17 November)

The title of this article contains a deliberate mistake. Complement is wrong; it should be compliment.

The so-called complementary offer, by which one normally means bars, restaurants and clubs, is a complement to the primary element of the tourism industry, the hotels. It completes the industry, but by perception, if not by definition, it comes down the industry food chain and is considered subordinate. As a consequence, it fails to be paid a proper compliment, or so it claims.

Palma town hall’s efforts to up its tourism game by bringing together different bodies from the industry haven’t gone down well with the restaurant associations of either CAEB, the Balearics business confederation, or PIMEM, the small to medium-sized businesses association. They feel as though have been ignored.

The fact is that they probably have been ignored. And ignored for different reasons. One is that they don’t sing with anything like a unified or co-operative voice, and not just in Palma. Two, and following on from this, they don’t have a collective organisation with the clout that demands to be paid attention to and which can command some lobbying space of the type that the hotel sector can. Three is that other parts of the industry, the hotels in other words, look upon the restaurants, to put it bluntly, as parasitic and incapable of or unwilling to actively involve themselves in promotion efforts. Four is that, as a group, they simply lack the financial muscle to make themselves important players in helping to drive the tourism industry.

CAEB and PIMEM are doing something about the first two, combining their respective associations for restaurants, bars and entertainment in order to try and give themselves a voice which will be listened to. But why haven’t they done this before?

Firstly, because the different associations themselves have their own agendas. CAEB and PIMEM aren’t the only ones. There is also, for example, Acotur, the tourism businesses association. These organisations occupy similar territory, duplicating or contradicting each other as the case may be. Secondly, restaurants in mostly any town or resort you care to mention function with their own interests to the fore. Co-operation has generally been absent, except where powerful and small groups of owners work together for their own benefit. Thirdly, and this is the unpalatable truth, the hotels have a point; the restaurants have been parasitic. They have done well simply by being there, but now, thanks to all-inclusives, heightened competition, economic crisis, the rules have changed, and the restaurants have been marginalised.

This sounds like a damning indictment of the complementary sector, but the lack of compliment paid to them stems also from a peculiar ambivalence shown to the restaurants.

The Spanish hotel confederation wants the new national government to make changes to help the tourism industry. One of these is a reduction in IVA, and the example is cited of how such a reduction in France has helped the restaurant sector. Not the hotels, the restaurants.

So, what has this to do with attitudes towards Mallorca’s restaurants? Something very significant, and that is that the French tourism industry is very different to Spain’s. France doesn’t have anything like the concentration of resorts that Spain and Mallorca have. It has resorts, but there is little that is comparable. It does have all-inclusive hotels but not like Spain or Mallorca do.

A reduction in value added tax to boost French restaurants was not simply a case of being helpful. It was a recognition of the central role of restaurants within the tourism industry. France’s restaurants are not complementary. It’s the other way round; the hotels are. The French don’t need to bang on about gastronomy, because everyone knows about the cuisine, and given the nature of the French tourism industry, the restaurants are absolutely essential.

A reduction in IVA might make some difference to Mallorca’s restaurants, but not much. What would make a difference would be were they not treated as the tourism industry’s doormats. But because they have never had that position of centrality, as they do in France, they are in a position of weakness, which is why they get ignored and why there is an ambivalence towards them.

Yet, gastronomy is meant to be one of Mallorca’s strengths. Maybe it is, but without an attitudinal shift on behalf of other players in the tourism industry, it won’t be. The restaurants have brought much of this ambivalence on themselves, but while the hotels continue to dominate the industry, a situation that will not change, they can’t expect to ever be more than complementary or to be paid their rightful compliments.

Any comments to andrew@thealcudiaguide.com please.

Battlefield: Hotels go on the all-inclusive offensive

There we were thinking that some new model of all-inclusive might be on the horizon, one that embraces bars and restaurants into the system. We might have been thinking this; the tour operators might have been suggesting it. The hotels don’t seem in any mood to go along with it. This is the impression formed by statements from heads of hotel associations in Menorca and Ibiza; there has not been a similar statement from Mallorca, only ones that are more veiled in their sympathy with views in other Balearic islands.

The other impression is that the hotels are going on the offensive in defending the all-inclusive offer. Or perhaps this does all tie in with the tour operators’ mixed-offer all-inclusive (discussed on 12 March) in that positions are being adopted, with the hotels taking an assertive high ground from which they might be seen as the good guys in admitting outside bars and restaurants into their all-inclusive “club”. The tour operators are demanding an increase in all-inclusive while at the same time wanting the so-called “complementary offer” to be a part of it. The hotels, seen as the villain in the all-inclusive piece, seem to want to play hardball.

The picture of bars and restaurants being painted by the hotels is one of complaining and of a failure to do anything to attract tourists. It is the hotels, so the argument goes, that assume all the risk and that make the effort; the complementary offer is being challenged to step up to the plate in attracting tourists. Moreover, the hotels’ line is that they have every right to challenge incentives such as happy hours and “menus” (presumably they mean menus del día) offered by bars and restaurants. This challenge comes and has come in the form of all-inclusive.

We seem to be heading to a state of all-out war between the hotels and the complementary sector. The hotels, in addition to all-inclusive, have been moving ever more into the territory once secured by the outside businesses – more entertainment, TV (Sky and football), even Sunday roasts. Entertainment may actually be cut back this summer as a way of reducing costs, but in mostly all other ways the hotels are attacking the complementary offer. This war could be a precursor to some truce or negotiated settlement, e.g. the mixed-offer all-inclusive, but what the hotels are angling at is that it should not be they alone who assume the costs and risks of marketing to get tourists to come in the first place.

The hotels are overstating the case; they are but one aspect of promotion. Nevertheless, they have a point when accusing bars and restaurants of only complaining and apparent inaction. And ever more, the complementary sector is seen as leeching off of the efforts made by the hotels. But this growing antagonism can also be seen as the result of shifting circumstances: economic conditions, stronger competition from other destinations and so on. For years, there was a symbiotic relationship between the two. This has gone or is going. It might only return if the tour operators are genuine in wishing to establish the mixed-offer.

One could accuse the hotels of being disingenuous. They are, together with government, town halls and tour operators, the frontline assault forces in tourism promotion. Clearly they are, and they know it, hence the possible disingenuousness. They are also, generally speaking, far better resourced than businesses in the complementary sector. (It might also be noted that some hotel groups run their own outside restaurants.) Their self-interests are served by co-operation, such as in being parts of local hotel associations which conduct their own marketing, but at least they do engage in co-operation. Does the complementary sector act in a similar way? Self-interest is even more extreme here. Do bars and restaurants band together to push a resort? Well, do they? I’m unaware of this happening. Where co-operation does exist, it tends to be as a means to kick against something – all-inclusives, the latest regulation. Negative rather than positive. And when something comes along which might require some co-operation, such as with the estación náutica concept in Alcúdia, self-interest comes to the fore; what has ever happened to this idea?

The hotels have thrown down the gauntlet. To quote, in translation, from yesterday’s “Diario”, the president of the Menorcan hoteliers says: “we do not see any effort at any time by the restaurant sector to bring tourists to the Balearics.” There is, in all of this, a horrible sense of bitching and bickering as the great edifice of tourism threatens to collapse around the hotels and as all the supply that has risen around them also tumbles and falls. Yet for the hotels to attack the complementary sector is – though they wouldn’t admit this – the consequence of their being beholden to the muscle of the tour operators; the reverse of the situation that once used to exist, a situation that used to allow for mutually beneficial co-existence with the complementary sector. The hotels are, therefore, going on a bullying offensive while simultaneously they are being rendered less potent by the masters of the industry – the tour operators. They are hitting out at the weakest link in the whole tourism supply chain, because it suits them to be able to try and cling to a power that is diminishing in a market that has changed fundamentally; they are less the victims of the all-inclusive war initiated by the tour operators than the complementary sector, but they are victims nonetheless, clutching at the spoils of war and abandoning their one-time compatriots in the bars and restaurants. Lines drawn for the battlefield.

Any comments to andrew@thealcudiaguide.com please.