More Stars In Their Eyes: Hotels’ strategy

Mallorca’s hotel federation has pronounced once more. Ahead of the local elections, it has sent out a clear message to the to-be-newly elected that “bold and strategic” measures need to be adopted to tackle the island’s tourism.

Bold and strategic. Fine words. The question is whether there is anyone capable of being bold or acting strategically. Don’t bank on the political classes offering such a paragon of tourism virtue. They don’t have a great track record in doing so.

The federation has identified a fundamental problem with Mallorca’s tourism. Or perhaps they have borrowed it. The federation says that over the period 2000 to 2008 the number of tourists increased by nearly 22% yet the level of revenue generated went up by a mere 2.3%. Where have we heard something similar? Ah yes, the other day. Dr. Ivan Murray and his findings on the diminishing returns of tourism since 2003.

The solution, says the federation, is for there to be ever more tourists, the trouble with this being that at the current rates of growth it makes little sense. If revenue goes up only slightly, but the number of tourists increases dramatically, then how can there be a benefit? In order for there to be so, the federation believes in the replacement of obsolete accommodation by superior-grade hotels which would result in greater revenues. As an indication of what it is referring to, you need look no further than the situation in Calvia. Seven out of ten hotels in the municipality are 35 years or older, and three-quarters of the places in the hotels are between one and three-star.

Grand plans for the regeneration of Mallorca’s hotels and tourism are nothing new. If you go back to the 80s and then into the 90s, plans were popping up from drawing-boards on an almost annual basis. One of the first was the “decreto Cladera” of 1984 that determined the square meterage per one tourism bed. Later there was the “plan for tourism resort embellishment” (making resorts looks prettier in other words). Then there was Ecomost, which sought to establish the limit as to the number of tourists; the “D” Plan of 1997 to address seasonality; the hotel accommodation modernisation plan of the 90s under which hotels could have been closed down if they did not comply with upgrades (and many managed to somehow slip through the net); the modernisation of complementary supply (bars and restaurants) of 1996.

What all these had in common was that they were drawn up in a period before the onset of the new competition from the eastern Mediterranean. Then the new century began and brought in what we now discover, that, for all those plans, the number of tourists has increased but the money they bring in has barely increased at all.

And of these plans, notably the hotel modernisation plan and that for tackling seasonality, were particularly unsuccesful. Furthermore, they both prove that there is nothing new under the sun, as they are but two issues that plague Mallorca’s ability to operate in the far more competitive tourism market of today.

Nevertheless, the hotels seem determined to modernise, which is fine, but then what? If this results in higher-grade all-inclusives, then not a great deal. It may lead to an increase in revenue, but revenue for whom? As we know from the idiotic tourism spend statistics, the gearing is towards revenue generated by aspects of the tourism offer which filter only indirectly into the wider economy; it is that on accommodation, the holiday package itself and transport.

More fundamentally though, the desire, the need to increase the number of tourists raises enormous questions as to the capacity-carrying ability of the island (whether it has the resources to support increases), as to possible further building developments (for the most part restricted by planning laws) and as to where the tourists will come from. The new markets, Russia and so on, are going to have to be pursued with considerable vigour.

Getting more tourists cannot be just about adding more during the summer. There has to be a limit to the number of tourists which can be catered for during the summer months. Moreover, creating plusher hotels adds to the current absurdity of so many of them being unproductive for such lengthy periods. Which brings in the question of seasonality. And it is here, more than anything, that an ability to deliver on a strategy, let alone develop one, is exposed.

You can go back further than that “D” Plan of 1997. In the 1980s they were planning the development of “winter products”. Guess what they were. You’re right: cycling, golf, culture.

The point is that when it comes to being bold and strategic, we’ve been here before. Several times. And it amounted to very little, even in the days before Turkey, Croatia and Egypt became the threats they now are. You wouldn’t count on it being any better this time round.

Any comments to andrew@thealcudiaguide.com please.

Adopting Positions: Chopin should have played golf

Chopin is to be made an adoptive son of Mallorca. No doubt he’ll be rubato-ing with contentment in his Parisian grave, well away from where his interred non-missus, Amandine Dupin (aka George Sand), will be cursing the fact of his joining her in adoption but rejoicing in her having secured the gig before him; she was made an adoptive daughter of Mallorca some years ago. Beat yer to it, Freddie, you sexual inadequate.

Chopin and Sand were simultaneously enchanted and appalled by Mallorca, and specifically Valldemossa. It’s the enchantment that gets hyper-brochured, alongside mentions of Chopin’s output while in his mountain retreat and of Sand’s legacy to the island, commemorated in the annual Winter in Mallorca cultural programme, named after her book. The selective writing of the history of the Chopin-Sand stay in Mallorca disguises the brevity of that stay and the deterioration in Chopin’s health during it, a consequence of a miserable and cold winter. How he actually managed to play the piano, rubato or otherwise, is a mystery. Or perhaps he was blessed with warm extremities. Well, a couple if not one other, if George is to be taken at her word.

Chopin was from Poland. It’s a happy coincidence. Name some of the “new” markets from which Mallorca hopes to attract more tourists, and Poland will appear high on the list. Having an adoptive son to boast about doesn’t presumably harm that objective: the tourism juan-ies should be frantically casting around for a few Russians or Chinese who might have some adoption credentials, other than members of the Russki Mafia or owners of shops in a Mallorcan McDonald’s style – the Chinese bazar; one on every street.

While Chopin and the not-missus Chopin are invoked as part of the island’s cultural and winter tourism, they might have greater contemporary impact had they played golf. Perhaps someone could conveniently unearth a 170-year-old pitch ‘n’ putt in Valldemossa; it would do wonders for the golf tourism project. Possibly. Golf, though, holds the key to greater off-season riches than piano playing. Or that’s what they would have you believe.

It’s doubtful that Chopin ever made it as far as Muro or the north of the island. But it is here that the battle for golf tourism is being waged – as if you weren’t aware of this already. Muro’s golf course development is going through yet another eighteen holes of it’s on, then it’s off; the promoters threatening to sue is the latest. Not, I imagine, that you care. No one much does any longer, except the main protagonists, one of which is the enviro doom merchants GOB.

The pressure group has been playing its own statistics game. What it has found, it reckons, are figures which “prove” that golf doesn’t do anything to bolster tourism off-seasonality. I had hoped that the figures would be proof, as at least it would have been evidence of someone making a hard case one way or the other as to whether the Muro course, or indeed others, are of any significant tourism value.

The statistics show that in the lower months of the “summer” season, i.e. April and October, occupation in hotels in Muro and Santa Margalida (for which, read Playa de Muro and Can Picafort) is higher than those in Alcúdia and Pollensa. From this, GOB argues that golf does not benefit either of the latter two resorts, ones where there are golf courses extant, while it also argues that Muro and Can Picafort are already doing nicely thank you by comparison, and therefore, by dubious extrapolation, don’t need a golf course (or courses). It then goes on to extol what are the highly limited business virtues of small niche tourism in the resorts, e.g. bird-watching.

What this argument overlooks is the fact that the early-season occupancy of hotels in Playa de Muro and Can Picafort can be explained by these resorts being centres of cycling tourism, more so than the other two resorts. By concentrating on hotel occupancy figures, it also neglects the fact that Pollensa has a far lower number of hotel places by comparison with the other resorts. Nevertheless, and notwithstanding the fact that golfers might stay in other types of accommodation (and GOB doesn’t take this into account), the findings do underline a point that I have made in the past, which is precisely the one that GOB is implying. Were there real tourist demand for golf in Alcúdia and Pollensa, then more hotels would open. Wouldn’t they?

GOB’s argument is persuasive up to a point, but there is one big hole in it – there are no figures for the months of November to March. The seasonality issue is a twelve-month affair. Winter tourism, or the lack of it, cannot be defined in terms of April and October. Which brings us back to Chopin and Sand. Has anyone ever attempted to prove a link between Winter in Mallorca and winter tourism? Maybe they have, and they’re keeping schtum. GOB’s claims are based on some science, but they seem post-hoc. However, they are not without a dash of merit. There ought to be more science, but one suspects that certain vested interests would rather there weren’t.

Any comments to andrew@thealcudiaguide.com please.

Will The Circle Be Unbroken? – Unemployment in the Balearics

The psychological barrier has been breached, but the regional government would like to suggest that it has not been. The national statistics office would beg to differ. According to it, unemployment in the Balearics has not only crossed the 100,000 Rubicon, it has embarked on the invasion and is scaling the ramparts. Ok, this is an over-statement; it’s not as if a point of no return has been arrived at, but it sure as hell must feel like it to those in the dole queues. The statistics office maintains that the number out of work stands at 112,000, one in ten – approximately – of the islands’ population. Or to put it another way, at just under 20%, one in five of the registered working population, and that figure doesn’t take account of the self-employed who are also feeling the pinch.

The government reckons that unemployment has peaked. It may have, for the time being, though an improvement in figures is unlikely to show up for some while, until seasonal employment kicks in. Even that, however, disguises the true picture, and that is the lack of employment opportunities which summer work only helps to obscure. Recession has exacerbated the situation, clearly it has, but it has also exposed the fault lines of the local economy – ones that should have been obvious to anyone, even politicians, seduced by the boom times but apparently incapable of counteracting seasonality.

The national government, meanwhile, is flailing around, desperate to find any measure that might reduce its massive budget deficit and to assure the markets that the Spanish economy is not the same basket case as Greece’s; oh how the temporarily mighty have fallen. One ploy is to raise the pension age to 67. Fine, assuming there’s any work for the 65 year-olds to continue with. Another is to increase indirect taxation. For an island – Mallorca – and a nation for which tax avoidance is a past-time, this is insane. It might, questionably, mollify the markets, but it will do nothing for employment creation.

Mr. Bean is cutting an ever more awkward figure. When elected for his second term in 2008, Sr. Zapatero had promised full employment. There wasn’t a hope in hell’s chance of that, especially not as the crisis began to consume everything in its path. And even were there “full employment”, what would it look like? A few months work as a waiter and then back to the off-season dole queues, paid for by the burdensome levels of social security that are a brake on much employment creation. Were there to be an election now, chances are that the PSOE would be obliterated, bringing into office – by default – the singularly uninspiring figure of the PP’s climate-change-denying Mariano Rajoy. You might remember him; he’s the one with a relative who holds a position in a university who doesn’t reckon much to the climate-change argument, and so Mariano used that as the basis for his own argument. That’s about as good as it gets.

But also meanwhile, Sr. Zapatero can at least walk the European stage during Spain’s EU presidency term. The central government’s science and innovation minister has announced, as part of the programme for the presidency, that research and development and innovation should be at the heart of European recovery. Good for her. Ah yes, innovation, technology, research and development. Now, wasn’t there something about all that two or three years back? Not from Madrid, but from the regional government. Whatever happened, do you suppose? Could it be that funding just had to be diverted to bolstering the rust-bowl industries – construction and hotels during time of crisis? Industries that are at the heart of Mallorca’s seasonality. And so it goes around, and around, and around, the circle remaining unbroken.

Any comments to andrew@thealcudiaguide.com please.