The Russians Aren’t Coming, They’ve Arrived

Do you know who Alexei Mordashov is? No? Well, you should do, and so I shall tell you. His name gives a bit of the game away. Yes, he’s Russian. He doesn’t like being referred to as an oligarch, but that is what he is. He is the main shareholder in Severstal, Russia’s largest steel company, and the 29th richest man in the world, according to the “Forbes” billionaires list. His personal wealth is said to exceed, twelve-fold, that of one of Spain’s richest men, Gabriel Escarrer of Meliá Hotels International.

Mr. Mordashov, like Sr. Escarrer, has a keen interest in tourism. Mr. Mordashov owns 25.06% of TUI AG; that’s TUI, the German tour operator and the most important player in tourism in Mallorca and Europe. His shareholding makes him the largest single owner of TUI shares. He intends to increase further this shareholding, though probably not beyond 30% at which point he would be obliged to make an offer for all the company’s shares. He has been described as the most powerful man in Mallorca, which, for those of you who had, until now, never heard of him, might come as a surprise.

A couple of weeks ago, Mr. Mordashov did a helicopter tour of Mallorca. He dined at the Robinson Club Cala Serena in Cala d’Or, winner incidentally of first prize in TUI’s “Umwelt” championship 2011 (environment to you and me). There he was joined by the man who has done more than anyone to make TUI what it now is, the company president, Michael Frenzel, and various associates of TUI, such as the head of RIU hotels which own 5.1% of TUI shares.

This other-worldliness of extreme wealth and luxury might be deemed relevant only for the celebrity or VIP pages of certain publications, but there is far greater relevance.

To describe Mr. Mordashov as Mallorca’s most powerful man is not to overstate his importance. His personal power is derived from that of TUI. And TUI is the power in the land.

The past few days have been good ones for the mega rich. The Meliá plans for Magalluf could not have been conceived without very deep pockets. The money that has been directed towards Sóller and that will be sunk into Capdepera is courtesy of Dubai and Qatar. Put into the equation the vast wealth of Mr. Mordashov and a picture may be emerging; one that will have the cash-strapped regional government, minded to give the private sector its tourism industry head, salivating.

Mr. Mordashov has said that his interest in TUI is strategic, which it undoubtedly is. A shrewd businessman, a trait he shares with Herr Frenzel, he is well aware of what this strategy will involve. Russian and Ukrainian tourism, only at present in its infancy, will go massive. Last year, as an indication of Mr. Mordashov and TUI’s interests, a joint venture between TUI and Severstal was launched.

The Russian overseas tourism market is only starting to realise its potential. In 2008, a mere 11.3 million Russians travelled abroad on holiday, less than a tenth of the country’s population. To put this into some perspective, in 2006, 69.5 million trips abroad were made by Britons, two-thirds at least of these trips being on holiday.

Russian tourists may not be everyone’s cup of tea or shot of vodka, but they tend not to be short of readies, to the point of flaunting their money. The BBC “Fast Track” show recently ran a feature on how new money (much of it Russian) was affecting an old resort in Tuscany (Forte dei Marmi). It wasn’t to everyone’s glass of vino. The resort had undergone a change, with luxury brand name fashion stores evident and, yes, some uncouth flaunting of wealth.

The brand names are not unsurprising, however, as Russians are said to be heavily influenced by them. In my local pharmacy the other day, a Russian man was holding a bag with a Prada label, while his wife engaged the chemist in an uncomprehending exchange. And the exchange was itself relevant. The chemist, she can speak English and German more than adequately, said that these new languages were making life very difficult.

She, though, as with many people in Mallorca, is going to have get used to the new languages. And quickly. The Russians aren’t just coming, they’ve arrived and they are going to be arriving in far greater numbers. Mallorca will be very different in ten years time. That’s what Mr. Mordashov calls strategy.

Any comments to andrew@thealcudiaguide.com please.

Happy Together? Hotel occupancy Alcúdia and Can Picafort

Following on from the mention of low occupancy in Puerto Alcudia on 8 June, some firmer figures, not just those for one establishment. The combined Alcúdia and Can Picafort hotel association reports (from “The Diario”) rates similar to last year. Currently, occupancy stands at 57% in Alcúdia and 58% in Can Picafort. Not very high in other words. The forecast for July puts the numbers at 78% in Alcúdia and 72% in Can Picafort. For July, these aren’t particularly impressive; indeed, they are distinctly unimpressive.

Leading lights in the association gathered for a chinwag a couple of days ago. The report from “The Diario” included a photo, featuring, among others, Juan from the Sol Alcúdia Center and Ricardo from the Siesta 1 Apartments. They looked happy enough for the camera. Not so sure that they really are.

The association approves of the regional government’s attempts to attract new markets, but reckons that the push on the Russian front is unlikely to bear much fruit in either of the resorts, as the Russian market, mainly high worth, prefers four or five-star accommodation. Which does, I suppose, beg a question as to the standard, overall, of hotels in the resorts. Not, however, that there aren’t four-star hotels. Relatively greater numbers of four stars and indeed two five stars are, however, in Playa de Muro. Not for the first time, I wonder why Playa de Muro hasn’t combined with the associations in Alcúdia and Can Picafort, especially as Playa de Muro sits between the two other resorts. Or maybe this Russian thing gives the game away. Muro wants Russian. It already has it, and yes, they, the Russians, do go to five-star hotels.

In an attempt to drum up more business, the association has invited representatives of 25 tour operators to come along for some gentle persuasion on Friday. It will, apparently, be highlighting such wonders as the improvements to the beach in Alcúdia and the restoration of dunes, and then following it all up with a meal at Son Real, just outside Can Picafort. God, they know how to win and influence tour operators. Here are some new showers on the beach, here are some dunes with some walkways, here is a nature area where no one much goes to. I don’t think we should be holding our breath. But hats off, nonetheless; at least the association is trying. Or is it desperate?

Any comments to andrew@thealcudiaguide.com please.

The Rumour Mill: Bellevue

Rumours. It was the regularity with which rumours surrounding Bellevue in Alcúdia surface that was one of the reasons why I spoke with the assistant director last year. Rumours are always circulating about Bellevue. Unfortunately, the contact is no longer there, but even were he it is doubtful that I would get far in asking a question about the current rumour that’s doing the rounds – that Bellevue will not be open next year.

There have been previous rumours along these lines, and they have all proven to be false. What is fuelling the current one is nothing directly to do with Bellevue or indeed Hotetur, the chain which operates the hotel. It has to do with the financial problems at Grupo Marsans, the ultimate owner of both Hotetur and the hotel complex. I have referred to these problems before, both here and in “Talk Of The North”. Marsans faces demands from creditors, one of which is the travel group Orizonia. A guarantee against a debt of some 40 million euros is Bellevue. Orizonia is demanding payment of this debt and the execution of its mortgage on Bellevue.

It is from this, one assumes, that the rumours are stemming. In the reports of the court hearings into Marsans and its difficulties, there has been nothing about Bellevue closing. The rumours would appear, as so often, to be the result of taking facts (and one can’t even be sure that facts are being taken) and moulding them into something without any basis in truth. I have asked people about the sources from which they have heard about Bellevue’s alleged closure. They go along the lines of someone who spoke to someone in a bar near to the hotel.

Bellevue stands on some 200,000 square metres of prime real estate in Alcúdia. It can, at a stretch, accommodate 6,000 guests. Orizonia, as with many a hotel or travel group, would love to get their hands on it. It has a hotel division that was created in 2008, into which Bellevue might well fit, though if you go to the website – http://www.luabay.com – and read the over-the-top narrative about how they will “seduce” you, you might be forgiven for thinking that Bellevue might not fit after all.

Of course, there is also a question as to quite how well Bellevue (as with many other hotels) is shaping up under the current difficult circumstances. But this is a separate issue. One finds it hard to believe that there is substance to the rumours.

And who knows, maybe a “new” Bellevue might become the destination for the much-longed-for Russian tourist market. President Antich has been in Moscow, wooing tour operators and predicting that Russia will become the third most important foreign market for Mallorca and the Balearics after Germany and the UK. Germans do not go to Bellevue in huge numbers, which is probably as well. You think there might be a bit of British-German antagonism, well according to some of my German sources this is nothing compared to that which exists between the Germans and the Russians. Hey ho, perhaps it’s as well that Russia aren’t in the World Cup.

Any comments to andrew@thealcudiaguide.com please.