The Great (Tourism) Reform Act

The new tourism law is still only in draft form. On Monday it was put out for “public exhibition”. What this means in practice is that sectors of the tourism industry can scrutinise it in order to ensure that their interests are being catered for. In theory, anyone can suggest modification, but it will fall only to the loudest and strongest to be heard or to effect amendment. And guess who they are.

Pedro Iriondo, the president of the Mallorca Tourist Board (Fomento del Turismo), while generally applauding the draft law, has also offered some criticism. “Everything is focused on resolving problems of the hotel sector,” he has said. But why should he or anyone be surprised by this?

Iriondo has gone on to say that the law should cover the interests of other sectors of the tourism industry. When pressed on which sectors, however, he mentioned that of the travel agencies. What is Iriondo’s background? Travel agencies. Viajes Kontiki, to be precise.

In calling for other sectors’ interests to be considered (and what, pray, are the concerns of the travel agencies), Iriondo and the tourist board have a credibility problem. It’s true that it, via its “junta” members at any rate, represents different sectors (restaurants, transport, marinas and so on), but of those members, four are senior executives with leading hotel chains. The independence that the tourist board claims, and its values, to include “plurality”, go only so far.

There is no genuinely independent tourism body in Mallorca. Were there, then it might just be prepared to point out that tourism, in terms of its accommodation, is more than simply hotels. But the alleged discrimination shown towards the holiday-let sector would still prevail. No one will stick up for it, because no one dares to.

The outcry from owners of property denied the opportunity to rent it out will ring around the letters pages. Here’s my advice: don’t waste your breath. No one who matters is listening or will listen, unless they are from the tourism ministry inspectorate or the Hacienda, or both.

Of course, the holiday-let sector isn’t discriminated against to quite the extent that is suggested. The new law contemplates an extension of the commercialisation of properties on “rustic” land and of holiday homes which are detached or semi-detached. It is the private apartment which really bears the brunt of the discrimination and of an absence of procedure by which it can be “regularised”.

While the government’s taking up of arms and mounting of a crusade against illegal accommodation is the headliner to grab the attention of the indignant property owner, there are other aspects of the draft law that are worthy of attention as well, and not just the changes of use that the hotels are to be permitted to undertake.

The director of the Mallorca hoteliers federation, Inma Benito, has come out with an intriguing statement. It is one to do with all-inclusives. She has said that the current all-inclusive offer needs to be revised profoundly and a consensus arrived at. What she has also alluded to is the need for spend to reach out to the bars and restaurants in tourism areas. The tourism law says nothing about all-inclusives per se with one indirect exception: that the taking of food and drink outside a hotel will be prohibited.

One presumes this means no more “picnics” being taken out of hotels and a way of tackling the unedifying sight of tourists wandering along streets with plastic glasses of beer or heading off to beaches with plates of food. But how this prohibition will be policed is another matter.

Nevertheless, if the hotels are serious about revising all-inclusives and can work this into the bill, this might just be the best thing to come out of the new law.

I’m speculating, but what they may be referring to, and this would be in line with one of the new law’s main aims of effecting a general upgrading of hotel stock, is the fact that all-inclusive has to mean all-inclusive, i.e. the standard of service would result in many three-star hotels simply not being capable of meeting the standard. There could also be some suggestion that the hotels are contemplating the type of “mixed” all-inclusive whereby local bars and restaurants become a part of the all-inclusive offer. We’ll see, but it is encouraging that the hotels appear finally to recognise that there is an issue.

The new law won’t be to everyone’s liking, but its reform and the reforms it will enable (to misuse “reforms” in the Spanglish sense to apply to building) may just prove to be a part of the strategic plan that the tourism industry has long demanded.

Any comments to andrew@thealcudiaguide.com please.

The Good, The Bad And The Holiday Let

I’m going to give you a list of organisations. When you get to the end of the list, here are your questions – what do they have in common and what is missing? Here goes, and pay attention:

The hotel federations of Mallorca, Menorca, Ibiza and Formentera; the association of hotel chains; the association for agrotourism; the Mallorca Tourism Board; the chambers of commerce in Mallorca, Menorca and Ibiza; the federation of local authorities; the University of the Balearic Islands; the associations of small and medium-sized businesses in Mallorca, Menorca and Ibiza (PIMEM); the association of travel agents; the school of hostelry; airlines; tour operators; unions.

Ok, if you have said they have all been invited to form part of the Balearics Tourism Agency, then have a banana. This is indeed what they all have in common.

Pretty big agency, huh? Yes, but a reason behind them all joining the agency is to avoid duplications in tourism efforts. So, credit where credit’s due. The agency may now sound unwieldy, but better this than numerous bodies here and there doing their own things.

But what of the second question? What’s missing? Need some help? Just look at the list again. Which are the really big players? Tour operators, airlines, yes, but also the hotels. Still don’t know the answer? This is a tourism agency, don’t forget. Tourism requires accommodation. Are you getting warmer?

Nowhere in this coming together of pretty much all those who matter in Mallorca and Balearics tourism is any representation of non-hotel accommodation: the holiday lets. The tour operators are one player that has an interest in this type of accommodation, others do to a degree as well, but otherwise there is no voice at all.

Why isn’t there? The obvious answer is that there is no body to represent what is a highly fragmented part of the local tourism industry. Even if there were, how well organised it would be would be open to question. There are all sorts of reasons why owners of holiday lets might not wish to be part of an organisation. This aside, the chances are that it wouldn’t be invited anyway.

Two summers ago some grand strategy talking-shop was meant to have been organised by the tourism ministry. It never actually met, but had it done there were to have been two key problems to be addressed, those of seasonality and holiday lets. While mostly anyone associated with the tourism industry would agree that seasonality is a serious problem, only certain parties openly state that holiday lets are. Who were due to have been involved in this strategy talking-shop? The hotels and unions for a kick-off. Both of them antagonistic towards holiday lets.

Amongst the organisations being pulled into the tourism ministry’s agency now, there are few which might speak out in favour of non-hotel accommodation. You might hope that the university would offer an independent view, for example. But as for others, they will mostly tow the line, the one that the hotels, the unions and therefore also the tourism ministry promote: that holiday lets are a bad thing.

Not completely a bad thing, as the tour operators will be quick to point out. But their interests lie with the regulated and registered villas of Mallorca. The airlines might also point out that holiday lets are not a bad thing. What about PIMEM? Where would it stand on the issue?

PIMEM has a bar and restaurant division. PIMEM is quite vocal on different matters, such as all-inclusives. A bad thing, it has been saying recently. It has also been saying that permission for hotels to convert to condohotels would be a good thing.

A hundred or so hotels are already said to be planning to sell off rooms and apartments in anticipation of a change to the tourism law which would permit condohotels and which would therefore create a type of residential tourism, akin to holiday lets but to the hotels’ advantage.

PIMEM reckons this is a good idea because it isn’t all-inclusive and because it would benefit its restaurant members, given the type of tourist it would attract.

But this is precisely the same argument regarding holiday lets. Or one of them. So why doesn’t PIMEM come out and support these? Probably for the same reason that the tourism ministry won’t. It doesn’t want to upset the hotels.

The newly constituted tourism agency is a good thing in many respects, but in one, that of a whole sector of the tourism industry, it isn’t. The momentum against holiday lets is unlikely to let up. Unless there are now voices at the agency to say otherwise, it is likely to get very much stronger.

Any comments to andrew@thealcudiaguide.com please.

The Great Reform Act: Mallorca’s hotels

President Bauzà and tourism minister Carlos Delgado have been parleying with the hoteliers. Love is now in the air where once were poisoned arrows, those being lobbed by the hoteliers in Mr. D’s general direction.

Delgado is promising the hotels just about everything they might have wished for: a change of use for obsolete hotel stock; a new tourism law that will make procedures more flexible; a crackdown on illegal accommodation. Throw in some redevelopment of resorts and you have just about the perfect result for the hotels.

Just about, but not entirely. The redevelopment of Playa de Palma, still being battled over and still short of funding, is held up as the model for resort upgrading elsewhere – Magalluf and Alcúdia have been mentioned specifically – but not all hotels in Playa de Palma want to see changes that might remove the bread and butter of the three-star hotel.

But plenty do want improvements. Mallorca’s tourism industry suffers from having been one of the first locations of the tourism industrial revolution of the mid-twentieth century. As with all original infrastructures, they become obsolete or old-fashioned; hence the desire to redevelop the resorts.

Knocking old hotels down isn’t really an option except in extreme cases, but upgrading them or converting them is. One type of conversion would see hotels become condohotels; another would let them become residential. With either option, and depending on the precise nature of what “condo” might actually entail and what constraints, if any, were placed on what could be done with these residential former hotels, what you might end up with is a system whereby holiday lets are made available under the control of the hotels.

You can conclude, therefore, that behind the opposition to holiday rentals and behind what is now meant to be a more rigorous approach to stamping illegal ones out, there is another dynamic. The hoteliers aren’t daft. They know full well that a market, a very sizeable market, exists for accommodation which isn’t that of the hotel. What could be better than to get hold of that market as well, whilst at the same time seeking to eliminate or limit alternatives.

The hotels have been lobbying to be able to undertake conversions for some years. The consequence of this, however, together with a reduction in total hotel stock envisaged under plans for Playa de Palma (and therefore elsewhere, you would think) and the fact that Delgado doesn’t foresee new hotels springing up in abundance, is that there will be fewer hotel beds around.

This could all make sense if you believe that Mallorca’s tourism should become leaner if not necessarily meaner. However, take a certain number of hotel places out of the equation and the attack on the holiday-rentals market looks even more ludicrous than it already is.

Following my article of 5 July (“No Hope”), I had some correspondence on the issue, and one question that came up was just how many hotel beds there are in Mallorca. I’d thought finding the answer would be difficult. It wasn’t. Thanks to the Fomento del Turismo (the Mallorcan tourism board), I discovered that in 2005 there were 283,436 beds. The figure won’t have changed materially. It was also easy, because I had written about it before, to find out how many tourists, at the very height of the summer season, there are. In August 2008, the number peaked at 1,930,000 in the Balearics; it will be higher this year.

Allowing for the other islands and various other factors, you can guess that, at a conservative estimate, there are at least as many tourists who stay in rental accommodation such as apartments and villas as there are those who stay in hotels. If the hotels cut their overall capacity, and even if they don’t, were holiday lets to be driven out of business or to be hounded more than they already are, where on earth would everyone stay?

The hotels might think that condos and hotels converted to residential use might go some way to housing these tourists, but the numbers would surely not be great. Plus, you would have lost those hotel beds into the bargain. Far from holiday lets being “unfair competition”, they are in fact a competitive necessity – for Mallorca and its whole tourism industry.

I have high hopes for Delgado. He should go some way to proving that these hopes are not misplaced. He should look at the total mix of the industry he now presides over and come to a conclusion that the hoteliers might not like, but which Mallorca can ill afford to be without.

Any comments to andrew@thealcudiaguide.com please.

Open House: The holiday-lets nonsense

There was an open letter the other day to “The Bulletin” from the boss of a UK holiday-let company. It was addressed to the tourism minister, was not without merit and has, seemingly, attracted support, to the extent that the same writer is now wanting to form some sort of pressure group. It was, as you would realise from the nature of the company, about the lunatic situation regarding holiday lets. Fair enough, and a fair way of generating publicity, you might imagine, but let’s not be cynical.

The open letter is a familiar enough technique. One of the most famous was Zola’s “J’accuse”. It acquired fame not only because of the accusations made but also because of Zola’s standing and influence in France. And it is this, standing and influence, that makes the open letter powerful. Moreover, the fact that it might actually be read by those for whom it is intended, makes it doubly powerful, which was the case with “J’accuse”. Zola had to flee to England.

I had heard of neither the author of the letter nor of his company until the letter appeared. No Zola, in other words. It might have been considered rather self-serving. Yet, it was a reasonable letter, one that expressed well the frustrations surrounding the confused holiday-let situation and the antagonism shown towards a sector of the tourism industry in Mallorca that has enormous potential for good. I might not go along with the technique of the open letter – and don’t – but the sentiments cannot really be faulted.

The problem is though, has the intended recipient – the tourism minister – read it. Will she read it? If the answer is no, then what was the point of it? Even if she has, or does, would she be likely to respond? Doubtful. But were she to respond, what would she say? Thanks, but no thanks, or something along those lines.

You have to go back to June last year to get a real handle on this. On 19 June (“But You Can’t Come In”), I reported on the agreement between the Balearic Government, business (hoteliers) and unions to tackle the principal problems with tourism, one of which was – so they reckoned – illegal holiday lets. And many holiday lets are illegal, because there is no mechanism to make them legal, which is how the government seems to want it. It is government strategy to outlaw as much of the holiday-let business as it can. It is also government wish to pursue ever greater standards in hotel stock. It should not be forgotten that, of the leading Mallorcan companies, several are hotel chains; they are extremely powerful. They are also highly organised and represented on all manner of tourism bodies. The holiday-let sector, on the other hand, is not organised, lacks representation, has no lobbying power, is fragmented. When the press come calling to ask for reactions to the appointment of the latest tourism minister (and they’ve had to do this a few times over not so many months), to whom do they talk? The holiday-let business? Of course not. It is to the hotel associations, those who always seem to express their full confidence in a new minister. They express confidence, not because they necessarily have any, but because they want they want to establish who wears the tourism trousers, and to let ministers know who not to antagonise. Get a campaign going for holiday lets, get a tourism minister listening, sympathetic even, and what do you reckon would happen? “Now then, Sra. Barceló, a little word in your shell-like over this holiday-let nonsense …”

Try starting a campaign if you are some small holiday-let business from the UK or another foreign country, and where do you reckon this will get you? Foreign companies can exert pressure, if they are powerful, the tour operators most obviously. And maybe it is these, the likes of TUI and Thomas Cook, who should be the real recipients of the open letter, for they want a flourishing holiday-let market as much as they want to be able to extract every last concession from the hoteliers. They also want to sell flights.

Joana Barceló will take precisely no notice of this “campaign”, because it would be politically unwise for her to do so. But if there is to be an open letter to her, then rather than “The Bulletin”, try the Spanish press. She might then read it.

I am, however, not unsupportive of the letter and of the writer, because he has done what the paper singularly failed to do when the tourism minister was interviewed, namely ask what the hell she’s going to do about holiday lets, other than place them outside the law. It is an issue that affects many and is important in the context of the total tourism scene; one also that is regularly aired in the paper – by letter-writers. But why does it fall to a letter-writer to raise the subject or to start a campaign?

Any comments to andrew@thealcudiaguide.com please.

But You Can’t Come In

So, the Balearic Government, business (for which you can read mainly the hoteliers) and the unions have reached an agreement to do something about illegal holiday lets and what is described as the “principal problem” with the island’s tourism model, seasonality. Good for them. Shame that they are missing the point.

There is no denying that the moribund nature of the winter season is a big problem. However, what sustains not only the island’s tourism model but also the island’s whole economic model is summer tourism. If that’s wrong, then you can forget the rest. And, if not completely wrong, that summer tourism is far from completely right. How can it be completely right when that summer tourism model is predicated to the extent that it is on the all-inclusive?

There have been reports that high season “numbers” are going to turn out to be better than thought. So long as the season turns out to have brought reasonably good numbers of tourists, then the various bodies will be able to sit back with relief and share a congratulatory cava, and feel that the summer season is in pretty good shape; therefore, not the principal problem, even if those numbers are made up with a whopping chunk of all-inclusive places. Ostrich time.

The government has made it quite clear that it sees Mallorca’s tourism as being based on quality hotel stock. Nothing wrong with that. But the size of the holiday let business is far from insignificant; in Pollensa, for instance, it comprises at least a half of tourist spaces. Not everyone wants to stay in a hotel, whatever the time of the year. A good tourism model offers a mix of accommodation to suit tastes. Which sector would most wish to see a reduction in the holiday let business? The hotel sector. It has a legitimate gripe when it points to the standards and regulations it has to adhere to and to the level of investment it makes; things not necessarily adhered to by the holiday lets. It is also legitimate to tackle undeclared rental income. However, it is the same hotel sector that is responsible, together with tour operators, for the growth of the all-inclusive and therefore the problems that face the summer tourism model and the island’s economic model. The holiday lets are far from irrelevant; they should be encouraged and not discouraged. They should be embraced as a part of getting the bread and butter of summer tourism right. It is quite depressing that the worthy bodies can define a “principal problem” that serves only to disguise the true one.

No tourists admitted
Well, it rumbles on. The Famous Five. An apology and explanation has appeared in “Talk Of The North”. And on it will go. It would probably have been better had nothing been said. Whatever. There was something else in the latest issue, and this concerns the tourist office on the paseo in Puerto Alcúdia. Why is it not possible for tourists to go into the kiosk? It’s a question that has been asked many times before and is a not unreasonable one.

There is a reason. And that is that when it was open to anyone to come in, it got overcrowded to the extent of people walking into the area behind what would be the browsing desk (and is when it rains, as the office is open then); that area behind the desk is the staff area. Closing the kiosk’s rear door comes down to a control issue. That is the reason. It may sound a bit thin, but there you go. By having tourists dealt only through the hatch, lengthy queues can and do form. Tourists are unable to browse, which many like to do. Not being able to does not necessarily help the businesses who want their publicity material picked up. There may be a solution. Go take a look at Puerto Pollensa’s tourist office. The kiosk is smaller, but there are display units outside. Want to browse? Well, you can. A point about the Puerto Pollensa kiosk is, though, that the display units can be easily moved inside. This would be less easy to do in Puerto Alcúdia given the step to the rear door. There are also usually at least two staff in Puerto Pollensa, whereas Puerto Alcúdia has one. Maybe they should re-design the paseo kiosk.