Wednesday, January 26, 2011

The Price Barometer: Mallorca under pressure?

I can hear the sound of pencils being sharpened, of keyboards being thumped indignantly, of conclusions being drawn and of calls for "they" (the ever-anonymous "authorities") to do something.

Prices. Give me strength. The UK Post Office has issued its annual worldwide holiday costs barometer, the needle edging ever higher until the barometer bursts with the rising pressure of a correspondent letting off steam with a shout of Mallorca's so expensive.

Mallorca, according to the Post Office's survey, stands at number 14 in a list of 36 destinations. There are two ways of looking at this. Mallorca is either the fourteenth cheapest place in the world or it is the twenty-third most expensive. The damning evidence, if you want to call it this, is that Portugal and Spain top the list of the cheapest destinations. How can Mallorca be more expensive than Spain? Must be because it's a rip-off. So will go the conclusions. Presumably, similar hackles are being raised in Tenerife which comes in at number nineteen on the list. Perhaps there is something to do with islands. And what might that be?

Let's get some perspective. With the exception of Bulgaria (number four), other non-Iberian competitors to Mallorca are, if one accepts the Post Office's findings, about as expensive or about as cheap - Croatia and Cyprus fractionally cheaper, Greece and Turkey fractionally more expensive.

The other perspective that is necessary is to understand how this survey is compiled. The trouble is that the Post Office doesn't say. If you go to its website, you will find the full results, but nothing about the methodology, save for the basket of goods that form the basis of the comparison. And one other thing. As a footnote, it says that prices are supplied by tourist offices with certain exceptions. Information for Mallorca comes from a villa agency. Why? I honestly couldn't say.

Unless you know the precise way in which this survey is conducted, you can make all manner of assumptions. The villa agency in question is a highly reputable operation. It specialises in luxury villas. Of its thirteen properties in Mallorca, eleven are in Pollensa. Let's just assume for one moment that information on prices is taken locally - in Pollensa town. It is not hard to imagine that these might be a tad higher than they are in, say, Puerto Alcúdia or Magalluf.

Mallorca languishes twelve places below Spain in this survey. But what is meant by Spain? Make another assumption. Benidorm. Anyone can tell you that Benidorm has a reputation for being cheap. Naff cheap, inexpensive cheap. Potentially, therefore, you have a polarity in terms of market; the economy variety of Benidorm and the luxury end of Pollensa. Chalk and cheese. One of the greatest disparities between Mallorca and Spain, says the survey, is the cost of a three-course meal with wine for two, a twelve euro difference. So what? It's eminently possible, just as it's eminently possible to pay the lower Spanish amount in Mallorca.

Everything depends, just as President Zapatero's famous 80 cent coffee depended. Another item from the survey is the cost of factor-15 sun cream. It's way higher in Mallorca than in Spain, by almost seven euros. And? Is this the same brand, the same supermarket chain? Perhaps it is, in which case there is a legitimate question to be asked as to why it costs that much more. But perhaps it isn't. You don't know, because the survey doesn't tell you. Nor do you know what size the bottle of sun cream is. There is a factor 15 sitting in my bathroom. It still has its price sticker. 3.99 euros. From the German Müller store in Alcúdia. Is this evidence of something being cheaper than the 4.42 euros on the mainland of Spain? No, it is evidence of one product at one store in one location costing one particular price. See, it all depends.

Price comparison surveys of this type need to be treated with scepticism, taken with a pinch of salt that probably costs more in Mallorca than on the mainland. They can be indicative of prices, but the surveys themselves vary. One from last year (Skyscanner's) made Cyprus the cheapest holiday destination in Europe. Yet it is thirteenth in the Post Office's worldwide survey, one place above Mallorca. Another, that from Thomas Cook, placed the Balearics seventh - behind Egypt, Turkey and the Canaries. But these are all more expensive, according to the Post Office.

Rigorously scientific these surveys tend not to be. They are unverified snapshots, they provide a talking-point, but that's about it. And there is often another reason for their being produced. The Post Office sells currency, a point it makes on its survey.


Any comments to andrew@thealcudiaguide.com please.

1 comment:

tim said...

If you get off the tourist trail you can still get very good deals in majorca, far better value than the UK