Mallorca's Greatest Business?

Palma's Palacio de Congresos, which had been a white elephant in the making for all manner of reasons, does seem to be on track to be opened some time in summer next year. One of the reasons for its potential elephantine status was that no one could be found to manage it. The first tender process earlier this year was so successful that it produced not a single applicant. There was interest from four companies, but the interest was not sufficient to overcome the conditions attached.

The new tender process requires a payment of eight million euros, down by three and a half million from the first tender. This, together with changes to the fixed income from the site, has produced one interested party and one only - Meliá Hotels International.

The fact that a revised and less onerous tender has still only managed to produce one bidder does make one wonder about the attractiveness of the convention centre to a contractor. Meliá, though, has been prepared to submit a bid, and the administrative board must be extraordinarily grateful. Without a company to run the Palacio, it might well indeed have turned into the white elephant it had looked like being. It isn't an exaggeration to suggest that Meliá has come to the rescue.

The past few months have been very good for Meliá, and the company has been able to bask in some positive publicity. Its Magalluf project, already bearing fruit, has produced the opening of the Sol Wave House hotel at precisely the same time as the announcement of its bid to manage the Palacio. Timing, one guesses, is everything in business.

The Magalluf project, though it attracts support from only under half the population (as reported in the Gadeso opinion survey the other day), does nevertheless attract greater support than other hotel-based developments on the island. In broader terms, i.e. those not confined to local public opinion, the project has received widespread backing.

Meliá is riding a wave of good news. Though I questioned the importance of determinants of social responsibility to the end-consumer, there was Meliá at the top of the list of socially responsible hotel chains, according to the recent report from Nebrija University. This served as just one further indication of how good a company Meliá is, and one can perhaps detect a sense of responsibility in it being willing to bid to run the Palacio.

There again, companies don't operate along purely philanthropic lines. Management of the convention centre has to come with a strong business motive, so one presumes that Meliá sees one. I remain to be convinced by the Palacio, but then I am not a Meliá senior executive.

Mallorca has some very fine companies and to single one out for particular praise isn't necessarily fair to these other companies, but were we at the end of 2012 and were I to nominate my Mallorcan business of the year, then it would be difficult to make a case for it not being Meliá.

This is a company which isn't only successful in Mallorca. It is a global business and one of the world's most important hotel chains. However, despite the promise of riches in overseas markets, Meliá remains committed to its home island and is demonstrating that commitment several times over.

With this success do, though, come the negatives, and a most obvious one is that public opinion. The Magalluf project aside, this opinion is less than positive when it comes to hotel chains such as Meliá being so apparently the beneficiaries of the new Balearic tourism law. From this, one can conclude that there is some disquiet in so much power residing with the hotels.

For all the misgivings, a Mallorca without Meliá and other world-class hotel chains would be a different place. No bad thing, some might say, but they would be wrong. In addition to the contribution to Mallorca, the island can glow in the light of the international prestige that comes from hotel chains which have been as prominent as they have been in tourism and other developments overseas. The world's tourism has been and is to no small extent "made in Mallorca".

The tender for the Palacio envisages the management lasting for 40 years, which is an awfully long time when you consider that 40 years ago Mallorca was still very much coming to terms with its new tourism industry. 40 years hence, who knows what Mallorca will be like? Despite the uncertainties, Meliá would seem to planning on still being around, remaining committed and being a company of which Mallorca should be proud.


Any comments to andrew@thealcudiaguide.com please.