Harry’s Game – Mallorca’s tourism problems

Harry Goodman may have experienced fluctuations in terms of his reputation down the years, but there is no doubting his standing in the travel industry. When he speaks, people should take note. And spoke is what he did. In “The Bulletin” yesterday. Unfortunately, he didn’t really say anything. Anything more, that is, than has been said before. Only his name lends his words a certain power, but that’s all.

His analysis goes thus: prices are too high, other places offer greater value for money, the weakness of the pound has made Mallorca more expensive for the Brits, you can eat out or stay in a hotel in London for less, and so on. No, none of it is hardly new. Nor is the assertion that Mallorca “has been resting on its laurels”. Goodman continues by observing that the island “hasn’t really woken up and smelt the coffee”. No, it hasn’t. The problem is that a lot of visitors have, and come to the conclusion that the coffee’s too expensive.

Where does any of this get us though? Nowhere. The litany of woes has been recited many times over. The solution – that of lower prices – has been suggested as many times. Either no-one’s listening (quite likely) or it’s not as simple as it might sound (also quite likely).

Nowadays, Goodman focuses on the cruise market. It is quite a different one to that which first made his name – the mass-tourist package holiday to destinations such as Mallorca. Intasun started in 1970. The world was a very different place and so, most definitely, was Mallorca. The island was very, very cheap, and so were holidays. But how regulated was the wider local tourist industry then? Not very.

Though Mallorca’s industrial revolution happened very late – in the form of mass tourism – it shares some similarities with Britain, where the first industrial revolution occurred. Mallorca, along with parts of the mainland, was at the vanguard of this new industrial revolution, and like Britain eventually came to suffer from being the first, so Mallorca has suffered similarly. The mistakes of being the first mover were one aspect; others have been obsolescence and competition. Which is not to say that efforts are not being made and have not been made to address these issues. Of course they have.

One of the points Goodman raises is that how well, or not, Mallorca is doing can be seen in the regularity, or not, of air services. These services have been cut back this winter, but – as a corollary to this point – the tourism minister has said she is negotiating with airlines and tour operators to guarantee a minimum number of flights and of tourists during the off-season.

Perhaps, as Goodman suggests, price structures can be adjusted to meet the challenge of the global tourism market, though you would have to wonder how or to what extent. He says he doesn’t think the “problem can be solved by government alone”, which is almost certainly true, but the mention of government is apposite. As I have said here, tourism should be the main strategic focus of the local government and given the right beef at the top of government, as it is elsewhere, e.g. Turkey and Egypt. However, Mallorca and Spain are not Turkey or Egypt. Politically they are different, and Turkey and Egypt are not part of the European Union – or Euroland.

The unpalatable truth is that there is no real solution. Mallorca will long continue to be a leading tourism destination, but it is going to have to get used to a diminished role, just as Britain did. The response should be for government on the one hand to be taking a stronger lead but on the other to be leading the drive towards alternative industries and not just the at-times pitiable attempts at alternative tourism. Economies change, as Britain’s did. And so has to Mallorca’s.

Or maybe there is a solution – that there is scope for a young Harry Goodman to come and wake up the moribund tourist industry.

** As a footnote. The other day (19 March: Wrote Me A Letter) I offered some “letters” complaining about car-hire prices, one of which reckoned that you would have to “part with upwards of eight grand for a week’s hire of a Fiat Smallo”. It was a joke. However, in the Harry Goodman article, it is said that he is being “charged something like 7,000 euros for a small car for a week”. This is, at least I hope it is, a mistake. But someone should take a bit of care, as this sort of thing has a habit of being taken as the truth.

Any comments to andrew@thealcudiaguide.com please.

Reflections Of …

The way life used to be. Sort of. I confess though that I had never, until a few days ago, ever had a conversation about the smell of washing powder. Go to England, and one of the first topics for discussion centres on the odour of a sweatshirt. Is it Ariel, is it Fairy or Persil? Who knows? Who, quite honestly, cares? But the conversation took place, nevertheless. Welcome to England, welcome to detergent dog days in reverse – the coldest weather for years, and slap bang over the Christmas period. Slip, sliding away. You don’t get that ice or snow on an average December morn in northern Mallorca. Ever. Or talks about the competing merits of Procter & Gamble and Unilever.

Oh to be in England, now that winter’s here. Rip-off England people say. Ripping off whom? And with what? Ah, you know, Mallorca’s so expensive. Funnily enough, it is. We have been lulled into false senses of financial security, false beliefs about how England is more expensive. No it isn’t. And it works better, despite nothing moving when there’s some snow. Where’s there an Argos catalogue in Mallorca, for example? Or a Primark, an Original Factory Shop? Fully clothed for twenty quid. Not in Mallorca, unless by means of a charity shop. Ok, so six quid for parking for three hours in the centre of Windsor is a bit steep, but someone’s got to pay for Her Majesty.

Yea, but there’s the corruption. Of course there is, but that corruption – you know the variety, that involving MPs’ expenses – it’s not the same. It’s not in a Mallorcan premier league of nepotism and utter disregard for any sense of morality. At least ducks can get a bath in England, courtesy of a touch of fiddlery-pokery. And there are also the mass cultural experiences, shared by all via the startling array of different technologies with which numerous outlets entice consumers with even more startling arrays of offers – genuine ones, lower-cost ones. David Tennant, David Tennant, David Tennant. Wherever you were, David Tennant via the magicking of those cut-throat pricing schemes. David Tennant, Gavin and Stacey, Larry Lamb dead in one place and on a Barry Island beach for one final man-boob fling in another.

And on grey, endlessly grey days that drift into darkness and night by three in the afternoon, there is still all that landscape. From the snow fields of the Chilterns to the dips and inclines of the Mendips and Cotswolds, the sweeps of greeny-brown, an ancient church of Saxon origin, the gargoyle water ducts monstrously staring down on shivering visitors, Japanese students with a constant snip and snap of a digital camera. The enduring politeness and manners of a bakery-caff with jars of flavours secured with gauze, the lady serving in an Upstairs Downstairs bonnet. But there is one thing – the coffee. It never tastes right. It looks strong enough, but isn’t. The English can’t make coffee, even if the Mallorcans go too far in the other direction, unless you ask them not to.

They know their context though. In England. The Mallorcans don’t always know it, or recognise it. They too often destroy it. Like the Can Ramis building in Alcúdia. Yet in Bath, huge amounts have been spent on a new shopping area with sharp-chiselled and finely-finished Bath stone. It is in keeping, it knows its place, albeit that to walk through it is to feel as though one is in a computer simulation. The virtual shopping centre of an architect’s brief has become real virtuality, right there in the centre of the city.

The grim reality though is there to be witnessed close up. The machine guns of the police taking a quick coffee at a coffee shop with weak coffee in Stansted. Someone talks to them, asks them about the guns. Somehow you can’t imagine asking a Guardia officer about his hardware. These coppers, young, really they were young – and I know all that guff about getting old when coppers look young – but they were. The guns are heavy they say. And they look it. A bit later, one stood guard, the gun held ominously across his chest, whilst his mate went for a leak. What do you do with a weapon of less than mass destruction when you need a slash? “Excuse me, mate. Couldn’t hold this Heckler & Koch while I get Percy out, could you?” The grim reality of travelling. Of the infuriation that is RyanAir, or the hour plus queue for checking-in EasyJets all scheduled at around the same time. Want to know why it’s a good idea to check-in online? Try a red-eye queue with eight other sleepy-faced flights replete with their freaky surfies having traded in their boards for skis to Innsbruck and whole displaced populations of Poland getting the hell back to Krakow.

But more than anything it’s all that landscape and indeed townscape. It doesn’t matter that there is so little colour, so much apparent meteorological drabness. It still amazes you, its reflections of the way things used to be. There’s this thing about the paradise island, you know what it is. Mallorca, all that dramatic scenery and even some which isn’t, some which is overblown, hyped and puffed, like the spoken-by-rote, sycophancy-through-groupthink eulogies for Pollensa’s pinewalk. Does it really compare? No really – does it? Someone said that when people go on holiday, it’s the only time they take time to actually look at things. In England, they don’t look at things, only the telly. They don’t stop to marvel, and so when they come away they see things and make of them a spectacular scenery, which there may well be – the Tramuntana mountains for example. But they have been entranced by an enchantment of the different, of the exotic, and assume a superiority of landscape in terms both of this difference and of their own reflected superiority. Yet they have failed to see the spectacular that surrounds them and so create icons of foreign vistas and views because they (these vistas) are foreign and because they – the visitors – may stop for once and actually look. It is this assumption of superiority that makes them not look and reflect on their own country, its drama and theatre, its curved or carved order, its mystery and legacy.

Oh to be in England, now that winter’s here.

A Season Of Extremes

This is the piece that has appeared in the latest “Talk Of The North”, the one about the season that was.

 

 

So that was the season. It may be a little premature to be looking back with October not yet past, but to all intents and purposes the season has gone, some places counting their losses and shutting up shop early. That was the season that was. A season of extremes. Over four months of almost unbroken sunshine peaked with a 15-year temperature high (in Sa Pobla) of a touch over 42 degrees in July. And then the weather duly and predictably collapsed in mid-September, making the month the wettest in the last 30 years. The abrupt and grey end to summer only added to a sense of despondency as late-season bookings took a tumble along with the thermometer. 

 

There were the extremes as experienced in the pocket, of health – swine flu – and on the streets and in the bars of Palmanova and Palma. Bombs. Despite the paranoia that made a few imagine that every shopping bag carried Semtex or a black ball with a wire sticking out of it, ETA’s actions were seen for what they were: desperate and isolated. This also despite an outrageous claim by the travel editor of “The Sun” (the travel editor, mind) that the bombs could mark the end of tourism in Spain and that tourists would avoid Mallorca. I trust she’s been reallocated to something less contentious or less intellectually challenging – like making the tea. The German tabloid press was not to be outdone. “Bild” claimed that Mallorca was some sort of hot spot for swine flu. The numbers who succumbed to the virus on the island remained low. 

 

The price story, though, was the recurring theme of the season. Mallorca is so expensive. For some reason, Puerto Pollensa seemed to get it in the price neck more than anywhere else. Emotion and hyperbole intervened in an unseemly scramble to prove that one anecdote of high prices was better than another. The most crass was the example of paracetamol costing five euros. Chances are that it was being sold in a supermarket, and there was at least one supermarket in Playa de Muro doing just that – at a fiver a pop. The real story was that the supermarket had no right to be selling it. Amidst all the complaints as to costly this and costly that, the most legitimate complaint concerned hire cars. But even here, the charges were not universally high, while the fact that some agencies may indeed have been demanding what were excessive amounts should have come as no great surprise. In April, it had been announced that there would be a shortage of vehicles and that the lack of credit had limited agencies’ abilities to renew their fleets. Moreover, the credit squeeze for hire cars was experienced in other countries. 

 

Yet all of this led to the inevitable “the authorities must do something” and the gross exaggerations of the “demise” of tourism based on little more than one person’s say-so and experience of a plate of steak and chips costing more than that person had bargained for. Emotiveness was no more apparent than in the default use of “beautiful” – as in our “beautiful island/resort” (delete as applicable) being “ruined” or “going to the dogs” (literally in the case of the ongoing doggy-doo tedium) because of high prices. 

 

There was evidence also of a more extreme position being adopted by the hotels and tour operators in advancing the offer of all-inclusive places. Alcúdia’s Bellevue was but one example. From zero five years ago to over 50% now – and growing in all likelihood. Just wait for next year when the hotels take on the bars in the World Cup war. A hotel room or lounge may lack the communal experience or atmosphere of a bar, but the hotels will be looking to try and ensure that watching Wayne Rooney getting himself sent off is done within their walls. TUI, meanwhile, was launching its first specifically all-inclusive brochures, in readiness for 2010.

 

And as the season’s sun sets, so attention will shift to the lack of winter tourism. Amidst all the navel-gazing and angst caused by lower tourism spend and a fall of up to 20% in the British market (in some instances), those authorities – the ones who must always do something – were saying that the summer tourism model was working fine and that attention had to be paid to the off-season. They were wrong. More than anything, recession and the pound’s slide have highlighted the extent that the summer model is subject to capricious economics and also to the tourist’s priority in terms of cost. And if the summer model was so right, then why undertake exercises such as the Mallorca events held in Manchester in May or lavish a significant wedge on Rafa Nadal so that he’ll unbutton his shirt and hang around on a yacht? If the summer model isn’t working, then you can forget the rest. And how can it be said to be working if 50% or more places are all-inclusive and if the wider economy suffers as a consequence of these places whilst also being caught in the vice of recession and a basket-case pound? Only in terms of announcing numbers of tourists overall and in particular the numbers passing through Palma airport can it be said to be working. And in the case of the airport, the greater the numbers the better as the regional government seeks to get its hands on running it once the numbers reach the required level. One then also has the absurdity of the consistent attempts to undermine the private, holiday-let sector, one that offers the potential of high-value tourism which the authorities, apparently, crave. 

 

Those authorities who must do something consistently miss the point. Nadal fronts up promotion for a corporate Balearics, yet it is the individual islands that are the “brands”. No-one goes on holiday to the Balearics. At a time when spending on internet advertising in Britain has overtaken that on television, it is here – the internet – where the real battle is being fought. And it is one involving increasingly canny tourists on the hunt for a bargain. The real promotion for the island and the resorts is coming from the likes of Travel Republic and Alpharooms. Those authorities who must do something should accept the lesson of 2009, not the extremes of weather, not the flu, not the bombs, but – I’m sorry to have to say – all that price stuff. It’s easy to be dismissive of those anecdotes, but in the same way as the tourist seeks his bargain so he takes note of an allegedly price-inflated pizza. They would do worse than to offer everyone a bribe, sorry, price incentive. Here, have a fiver and come to Mallorca. So long as you don’t spend it on paracetamol.

Leader Of The Pack

And continuing what is likely to be theme of the month, the hotels and others have called upon President Antich to form an alliance with the heads of other regional governments across Spain, for which tourism is a vital part of their economies, in leading a lobby to get the central government to back track on the planned rise in IVA. In the report from the “Diario”, the head of the hoteliers’ federation in Mallorca is quoted as arguing that the IVA rise will be a worse move than the so-called eco-tax of some years ago, which was aborted almost as soon as it was introduced. 

 

The strength of the opposition should not be underestimated and the argument against a rise is valid. However, it is also a case of special pleading. What about everyone else who is set to be affected by a two per cent rise on the top rate? Take away the one per cent for the tourism sector, and what might happen? Three per cent on the top rate? 

 

The central government has to find money from somewhere. The alternative of course is cut public spending, but how? New funding is already in place for, for example, that investment finance for the hotels and additional assistance for those in need over the winter. A constant in the economic development of Spain during the boom years has been the role of public spending, especially for construction and civil engineering projects, and therefore for the construction industry, an industry neutered by the current lack of private finance from the banks. Without public spending in some parts of Spain, Mallorca for example, the economy would all but grind to a halt, save for tourism being bashed about by recession and now a possible tax increase. 

 

The crisis, more than anything, has emphasised the underlying weakness of the Mallorcan economy and the short-sightedness of a model based on two key industries without a diversity to act as a safety net. There is an inevitability that taxes will need to rise, despite my assertion that a lowering might actually lead to increased revenues, and if not in the tourism sector then in the wider economy, resulting in shackles placed on consumer spending and thus a further limit to the capacity to come out of recession. In economics, recessions are often referred to with the aid of letters – a U is a fall, bumping along the bottom for a while and then coming up, a V is a sharp fall and then a sharp rise. Then there is a third – a W, two V’s in other words. And that may indeed be the consequence of tax rises, a short-term recovery followed by another slump as consumers put their wallets away.

 

 

To other things, well, one other thing – the weather. The fortnight of storms that seemingly brought summer crashing to an end gave way, bang on 1 October, to a return to sun. It is extraordinary the number of times changes to the weather do seem to coincide with the first day of a new month. And the late summer weather has been remarkable. A temperature of 32 degrees has been registered in Sa Pobla, the weather station commonly used as the benchmark in the north, and meaning around 29 on the coast. Next week is forecast to see a drop to more normal temperatures of 22 to 23, and after that … ? Hold on to your hats when November arrives.

One More Time

Following on from yesterday … . The central government’s tourism ministry reckons that an increase in IVA (VAT) of one per cent (to 8%) for certain tourism-related activities (accommodation, transport and bars/restaurants) will have no effect on the number of tourists. It also reckons, as noted in “The Diario”, that the average price of a hotel stay (one night presumably) will rise by a mere 50 centimos as a consequence. The secretary of state for tourism believes that the fact that the rise will not be implemented until 1 July next year (as would be the case for all categories of IVA, including the general rate) will act as an incentive for bookings prior to this date. While true, it’s also a tad disingenuous, a case of looking for a benefit from something essentially negative. The government is possibly on firmer ground when it points out that the hotel sector has been the beneficiary of a vast amount of investment finance, though to what extent this is actually being exploited one doesn’t really know. 

 

The date for the rise in IVA is probably not coincidental. It will kick in at the start of the third financial quarter in Spain – IVA inputs and outputs are calculated each quarter and payments or credits issued accordingly. The third quarter covers, of course, the peak months of July and August. 

 

The wider point, though, is the drip-drip effect of a tax rise. With complaints about prices having been given a good old airing everywhere this summer, you can bet your life that once it becomes known that there is to be an increase, the forums and all the rest will be full of even more damning Mallorca’s so expensive propaganda. One per cent, in the scheme of things, does not amount to much, but it does add to a cumulative perceptual impression of price rises. The tourism ministry, not least the local one in Mallorca, should be paying heed to those complaints. Indeed, the president of the regional government has expressed his concern about the planned rise. 

 

The response by the central government to the criticisms of the tax rise from the boss of Thomas Cook suggests, at least in part, that it has been stung into making a statement, with its tourism ministry, headed by Joan Mesquida, himself a former director general of the Guardia Civil and National Police (interesting career progression, but there you go), to the fore in issuing this response. The suggestion that he, Mesquida, was actually seeking to keep the 7% rate – one that came from the Spanish tourism promotion organisation, Turespaña – has been rebutted. The party line, so to speak, is being held. But it speaks volumes that the intervention by the head of the second largest tour operator should provoke a response. The true power in the tourism market resides with the tour operators. The tourism ministry, as the frontline contact with the tour operators, should be seeking to distance itself from the argument and looking to keep the operators sweet, but of course it can’t and is so backed into a corner, even if officials might actually agree with Thomas Cook. It will be interesting to hear what TUI, as the leading operator, might have to say about all this.

Here Comes A Fontella-Super Nova

When a bigwig from the world’s second largest tour operator makes a pronouncement, the Mallorcan tourist authorities, hoteliers, town halls should all take note, and in the case of the tourism minister, it looked as though he had been made to – with some force. Manny Fontenla-Novoa, chief executive of Thomas Cook came, spoke and put a dirty great VAT cat among the pigeons of the regional and national governments. In addressing hoteliers in Palma, he was clear that proposals for rises in IVA (VAT) were, shall we say, less than advisable. Damn right they are.

 

Governmental coffers are less than flush at present. Spain has been one of the countries worst affected by recession, and will – in all likelihood – be one of the last to limp out of it. To remedy the deficits the government is running, they have come up with increasing indirect taxation (IVA/VAT) as the solution. Badly though revenue may be needed, this could well be counterproductive. As far as the tourism industry is concerned – bearing in mind that in other countries, such as France, there has been a reduction in VAT as it is specifically applied to tourism – any increase is bound to push up prices. These are not necessarily the prices of holidays, but those that would be charged in the bars and restaurants and so on. At a time when spending is falling and when one hears all those stories about high or higher prices, a VAT increase is the last thing that’s needed. To add to this picture of woe, Thomas Cook are saying that the level of all-inclusive packages is set to rise next year, by a factor of 20%. That’s a perfectly believable increase. Furthermore, as noted in “The Bulletin”, Fontenla-Novoa has reserved some criticism for the promotional spend by the Balearics authorities. It is around 30 per cent of what Egypt, for example, dishes out. The comparison is not entirely fair as Egypt is a country; the Balearics are not, you may have noticed. But we get his point, even if also Egypt is diverting massive resources to establishing its place as a tourist destination. Yet of course in this regard there is a pretty fundamental issue. If tourism is so important not only to the Balearics and to Spain as a whole, why is not more promotion undertaken and why are measures adopted that positively have a negative effect on tourism, to which we must now add an increase in IVA?

 

From today in “Talk Of The North”, you will be able to read a thing I have written about the season. One point I make is to question the tourism authorities’ belief that the summer tourism model – the bread and butter of tourism – is working ok. It clearly is not, and recession and the pound are not the only factors. Thomas Cook would seem to agree, and rather pertinent, I felt, was a probably unintentional photo that “The Bulletin” had of those at this meeting in Palma. But it was terrific – in the centre, Fontenla-Novoa, a tall man with an easy smile and one suggesting just a hint of superiority or of having made his point, to one side of him the head of Iberostar looking ever more fabulously like a long grey-haired Red Indian, and to the other, shorter than the Thomas Cook boss, Miquel Nadal, tourism minister, with an expression as though he’s just been given a severe ticking-off in the head’s study but is required to pose for the school photo.

Everything Depends

And ever more on the theme of the month … Mallorca expensive or not. One of our own, as it were, Glen, acquired stardom yesterday by having a letter to “The Bulletin” published in pride of place on page 2. Clearly, it was a bit of a thin news day, as there were several more letters on prices etc. on another page. Another 3 euro coffee, someone bemoaning the cost of a sandwich and a menu that was only in Spanish and German (that should be added to the list of yesterday), and another who has got a bee in his bonnet about alleged cartels operating in the car-hire business and on golf courses.  Ho hum. And then the other side of the coin; examples of where one can eat out reasonably. As for that further 3 euro a coffee, it refers to a beach café in Porto Colom – four years ago. QED, Mallorca has long been overcharging. Maybe. Some friends went to Porto Colom, it would be three years ago now, and were distinctly miffed at what they had to pay for a meal at a particular restaurant. So maybe one could draw a conclusion about Porto Colom being particularly expensive, which, I imagine, would be completely erroneous. But some might do just that. One pricey meal, one pricey coffee, and Bob’s your wide-boy, ripping-off uncle – Porto Colom is overpriced and over there – on the east side of the island.

 

Mallorca is not cheap, let’s just nail the canard once and for all that it is. Last year Thomas Cook provided a survey of ten holiday destinations. This found that Mallorca was the third most expensive, only Florida and, surprisingly, Croatia being more so. Less expensive were, for example, Turkey and Bulgaria, with Goa the cheapest of the lot. The calculation in that survey was that Mallorca was cheaper than the UK by a factor of nearly fifteen pounds (daily spend) (22 June 2008: One On One). It all depends what you use as your measures of course. On 30 July I offered a number of items that made up a daily spend some way short of Thomas Cook’s and which included significantly greater amounts of the boys’ bevvy as well. 

 

Depends. Depends. That should be the word of this debate. For every tale of expensiveness, there is another of cheapness. Back and forth we go. But it is the use of these single examples, these cups of coffee, these bottles of suntan lotion, these boxes of paracetamol, which is so galling. Galling because they prove precisely nothing. And the expectation that Mallorca should be cheap is something else that is galling. Have those who complain ever stopped and taken a look at prices of property in Mallorca? All that expensive, yes expensive, real estate, and they expect a coffee or a beer to cost a handful of centimos. Get real. That said, it still comes down to “depends” – where you go, what you buy, blah, blah. 

 

Might the authorities, as suggested a couple of days ago, be minded to “do something”? You know what, I don’t think they would be. And why not? Because they want so-called quality tourism. And that means tourists of money. And that does not mean pints for a euro, even if these were attainable, which they are not, or not sustainably attainable at any rate. Yet the authorities are misguided. The fact that hotel occupancies might be “catastrophic” this season are not as a result of prices, they are the result of a fall in the bread-and-butter regular mass tourism, that upon which the island is built. The authorities should take note of complaints of high prices, but only in the sense of analysing why they might be high. And they still wouldn’t do anything, because they are bound by the rules of engagement that are market forces, economic circumstances, and the European Union. Want cheap? Ok, go to Bulgaria, but its prices will catch up. 

 

Everything depends. Mallorca may not be cheap, but it doesn’t have to be expensive, only if you want to make it so. In the UK, and in Holland, people have been telling me that everything seems so much more expensive now. And there is some truth in that, despite low inflation. But that also depends. Depends what you are referring to. I come back again to the assistant director at Bellevue. He reckons that there is a lot more budgeting occurring now. It wasn’t always the case. People would go out to bars and the like and spend money and not really know what they were spending. This has changed, and has been highlighted by the crisis. People are far more aware, and it is this awareness, as much as anything else, which leads to the “expensive” claim. I am repeating myself I know, but I am convinced that in many instances prices have not gone up significantly, if at all, just that people seem to believe so because previously they hadn’t taken much notice. But there again, maybe it all depends.

The Back Seat Of My Car

We are in a period not of price inflation but of outrage inflation. It continues. It was the cost of car hire (again) yesterday. At least someone had the good sense to right the gross coffee distortion by penning a note to “The Bulletin”. But elsewhere we were told that the “alleged” shortage of cars to hire and their inflated prices is a situation the industry has created. Well yes, that’s true but only in the sense that lack of access to finance has been the primary cause of fleet reductions. If people want to beat up on anyone, then let it be the banks. I say once more, however, this is a situation that has been known about for months; it should come as no surprise. Moreover, it is not a situation unique to Mallorca nor indeed Spain. Similar gripes are to be heard from tourist armies in the likes of Tuscany, wishing to motor around the green lands of northern Italy in a formerly less expensive Alfa Romeo cabriolet. 

 

The regular calls for “government” or “authorities” to “do something” are laughable if they come from those who, under different circumstances, are only too happy to be the beneficiaries of a market relatively free and unhindered by central intervention. Perhaps they might wish to call on governments to prevent the making of profits on the sale of property (not great at the moment admittedly, but that, strange to report, is because of the workings of the market). There is a sense of having cake and eating it as well about all this. Or anywhere but the back seat of my hire car. 

 

One writer called on the paper to pass on letters to the “authorities”. Were it to, the “authorities” would no doubt say gravely that they will look at the matter, pose for a photo and do precisely nothing. Or, they will have a word, to which the reply will be – you lower our rents and our taxes and then we’ll talk about prices. 

 

The government could, one supposes, “do something” were it minded to. The tourism industry in Mallorca is a strategic industry. One element of that industry, the hotels, is to benefit from low or zero finance, courtesy of the Balearic Government, in order to undertake certain redevelopments. This, so the theory goes, will help to kick-start the other strategic industry – construction – while bringing about upgrades in hotel stock that are deemed necessary in the face of competition from other destinations. But the hotel sector is fundamental. I’m not sure the same can be said about hire cars or indeed bars and restaurants. The government would only “do something” if it somehow had hold of the purse strings. The hotels have been told they can create spas and the like within existing complexes but they can’t actually build out – these are the terms on which that finance is available. Were there to be a central fund for other sectors that serve the tourism industry to avail themselves of, then the government would be able to “do something”, such as, perhaps, impose certain constraints on prices charged. But why would they? To do so would require an accord with the banks, who would otherwise see a source of their business taken away, even if they might be currently disinclined to lend finance. And you would end up with a quasi-nationalised bank to fund aspects of the tourism industry, with strings attached. It wouldn’t happen. Even were such a system of finance to be created, it would have to be applied across the board. The car-hire sector is not a special case. 

 

Yes, there are examples of higher prices this year, but there are also examples of small companies benefiting. They are taking up the slack from the larger agencies unable to meet demand for cars. They may well be charging higher prices, but they are also being given a shot in the arm. 

 

One should not underplay the potentially bad PR that high prices create, but one needs to be aware of the short-term circumstances that have brought about these prices; circumstances not of the car-hire agencies’ making. These are circumstances being repeated in other countries as well. Were the current charges being quoted by some agencies to persist, once normal circumstances are re-applied, then there would be cause not just for concern but also for genuine accusations of profiteering. But these are unlikely to arise. There are also suggestions as to the operation of some sort of cartel. I would like to know what evidence there is for these allegations. Despite what some might argue, rules of competition do actually apply in Mallorca, both in the legal and the market sense of the words.

 

And those rules of competition bring one back to what goes on in the bars and restaurants. It is they, above all else, that go to shape prices and products. If a café does indeed charge 3.50 euros for a coffee, well that is its affair. If the one next door is charging the normal 1.50, then the 3.50 café may not be in business that long, but it depends what sort of a place it is. One of my email correspondents, Lynne, points out that bars etc. are supposed to display their officially stamped price list. The point being that you can check the price before ordering. Don’t like the price, go somewhere else. But maybe that 3.50 café has an ambience or style that you do like. More expensive, but you pay a different price for different products. That’s the market for you.

 

Wrapped up in all these complaints about prices is an unrealistic notion that somehow bars and the rest have an obligation, a responsibility to the resorts and the island as tourist destinations. They do not. Their responsibility is to themselves. And it is their responsibility to price and to provide product that the market demands and that has an edge over the competition. Let me tell you about external responsibility, or how it was summed up by the assistant director of Bellevue. There is none, except for the environment. In Bellevue’s case, they do what they do – his words. And so it is for any business, be it bar, restaurant, or whatever.

 

Glen, another correspondent, in the context of the gripes about bar prices, wonders whether the only reasons that some people go on holiday are to eat and drink. It’s a fair point, and the impression some of these letters gives is that these are the reasons. Oh, and hiring a car as well. Someone else made the point to me the other day that the Brits seem to believe that wherever they go on holiday it should always be cheaper than at home. The car-hire issue is one thing, but as for the rest … you make it as cheap or as expensive as you want, but please spare us these spurious conclusions based on specific and arguably isolated examples. And I maintain that the crisis and the exchange rate have heightened awareness as to actual spend, causing a perception of higher prices even where these do not exist. To repeat from yesterday – just give it a rest, please.

You Have A Cup Of Coffee

Oh no, here we go again. Hot on the heels of the piece of two days, another letter complaining about prices. One grows tired of this litany of expensive woe, especially when it’s so skewed. Up pops someone else in “The Bulletin”, this time using the price of a coffee as the stick with which to beat the cost of Mallorca. How much? 3.50 euros. 3.50 euros? Where the hell have they been taking a coffee? It can be the case that some restaurants will charge excessive amounts for the likes of a coffee, but they are usually expensive restaurants anyway. The solution is to go somewhere else, or take a post-prandial stroll to a café or bar where the coffee will be, typically, 1.50 (you can indeed pay less). Or maybe this was a special type of coffee, who knows? And that’s just the problem, you never know. You never know which restaurant or bar, you don’t necessarily know where it is. I daresay that in the high- and well-heeled boutique bars of Deía or Portals you can cop a big’n for one with milk. Doesn’t mean to say that you pay it everywhere, and you don’t. Of course you don’t. So why say it? You know, I might write a letter, say I was charged five euros for a coffee. No, make that a tenner. And then I’ll demand that the authorities do something about it all before the tourism apocalypse occurs. And of course I won’t say where this tenner was charged, because it was all a fabrication. Can we please just give this all a rest, as it is, yes really is, rather tiresome.

 

 

Not the year of the jellyfish

Been stung by a jellyfish this year? Chances are you haven’t been. According to the “Cruz Roja”, its lifeguards and staff have had to attend to a mere 3,221 bathers in the Balearics who have been on the wrong end of a jellyfish tentacle. Sounds a lot? Not really. In 2008 the number was 13,767, while in 2006 – the year of the plague – it was almost double that figure at over 26 thousand. Ibiza is the place you need to go to be more likely to be stung; the number of victims there is not far off a half of that 3000 plus total for this year. Given that more people go to Mallorca than to Ibiza or Menorca, it is perhaps surprising that the fewest numbers of stings are recorded on the biggest of the islands. Or maybe the Cruz Roja doesn’t patrol that many beaches in Mallorca. Anyway, it’s all rather encouraging. Perhaps the winds have just been in the wrong direction and have blown the sea and the devils away. But don’t get too complacent, there have, in Mallorca, been nearly 270 people stung by fishes, most obviously the weever fish. My neighbour for example. “Merde”, said he when his foot expanded and he had to head off to Muro General. Well, he is French, so he would say that.

Animal Quackers

And so they came again, they saw and they let loose some live ducks – more than on other occasions during this time of prohibition. Therein lies a story. If you know not of what I speak, get yourselves down to Can Picafort next year for the traditional duck liberation farce. Where there should be only rubber ducks are a few real ones – a dozen in all this year. The problem is you can’t get a good view. So many people came this year, perhaps because it was a holiday and a Saturday, but also because they want to see live ducks being let go in contravention of this mad denial of an old ritual; they want people to be naughty. Whether the masked men who were responsible for the live fowl came on jet-ski or boat is immaterial, the fact is they came, and no-one in Can Picafort is inclined to let on who they might be; they still like their traditions live and with breathing animals in Can Picafort. Plod were apparently unable to use launches because they were all being used to protect the royals down in the south. It would be same next year as well. Unless they form some sort of exclusion zone with helicopters, launches, submarines, the masked miscreants will prevail. But to create an overwhelming police presence would be insane. We are talking about ducks here. This is of course now all a cause célèbre, and there will be a desire for more audacious cocking-a-snook at authority; expect whole flocks of ducks in 2010. And even more people willing them on.

 

 

Oh so expensive – or not?

Yet another letter to “The Bulletin” about over-pricing and low standards. Yet another letter choosing Puerto Pollensa, or one restaurant (unnamed) in Puerto Pollensa, to justify the argument. To be fair, the letter-writer(s) praised restaurants in the resort but picked on one where the menu of the day was less than good. So what? We can all point to bad experiences wherever we go. One example does not make a case for anything, other than not returning to a particular restaurant. ‘Twas ever thus. Yet the conclusion, in the letter, is that tourists will not come back if they are expected to pay the prices that are being asked. Something isn’t quite right – yesterday I cited that research which made price a key issue for coming to Mallorca. Maybe it is just coincidence, maybe it is just a case of letter-writers following a leader, but the paper seems intent on ramming this theme down everyone’s throats and using it as a means of beating the tourism industry in general and bars and restaurants specifically, but with little balance or explanation as to why prices may be as they are or as to how one can actually holiday in Mallorca pretty cheaply. The letters are generally left unchallenged, creating a false impression; it’s the same principle as that to which I referred yesterday.

 

You have to, or should always strive for some perspective and some balance, and these one-off letters simply don’t do that. In “The Diario” they have been talking to tourists and finding that they are looking for ways to spend less, but they quote one British holidaymaker who says that everything is much cheaper than in the UK. So make of that what you will.

 

 

Car-hire shortage – old news

Still with “The Bulletin”, on Saturday it front-paged about the lack of hire cars on the island and their price. It was basically a thing doing the rounds of other media – the BBC’s website had something very similar. It’s fair enough and at least it does point out that the situation has been caused in large part by a lack of financing that saw hire-car fleets reduced. But why now? On 14 April (You Got A Fast Car), there was a piece on just this subject. The shortage was heralded before the main season started, but only now is it being given much attention. It’s actually old news, old news that should have been given more prominent treatment as car hire is a not unimportant aspect of the island’s tourism. Don’t understand.