Eco-Tax Crash: Myth or not myth?

As you might expect her to, the national secretary-of-state for tourism, Isabel Borrego, isn't a fan of tourist eco-taxes wherever they might be applied. She is of course affiliated to the Partido Popular - it is widely said she got the job because she was chummy with the ex-president of the Council of Mallorca, Maria Salom - and so she would be bound to oppose tourist taxes. Being Mallorcan, she has a particular interest in the plan for a Balearic tax, and she has been voicing her displeasure.

Borrego says that there are "objective data" which show that the new tax would create a loss in tourist numbers. These data relate to the previous tax. It, she says, led to there being one million fewer tourists in the Balearics during 2002-2003. Her objective data are open to question.

What losses did the Balearics incur because of the previous tax? Any? It is true to say, because the Balearic tourism ministry keep very complete records of these things, that there was a fall in tourism numbers in the first year that the tax was applied (it came into effect in May 2002). This decline, though sharp, was not as great as Borrego says: it was just over 550,000 for the whole of 2002. Nevertheless, and QED, the eco-tax meant more than half a million fewer tourists. Well, not necessarily.

Borrego has been speaking about the tax and how it is or will be perceived by the German market. The 2015/2016 version of this market will see itself as being under attack by the tax, one which implies a rejection of the visitor. In this, she is echoing the narrative from a separate issue that arose around the time of the old eco-tax. It was one to do with remarks from the then tourism minister, Celesti Alomar, and president of the Council of Mallorca, Maria Antonia Munar. They gave an implication that German tourism of the 2002 variety was not wanted: or at least a certain type of tourism was not wanted. This had little or nothing to do with the eco-tax. It had everything to do with wanting a whole new "quality tourism". It was picked up in Germany in particular, though it was a theme that applied to tourism from all markets: just as the eco-tax did.

The German market did require some later PR massaging in order for it to be satisfied that Alomar and Munar had not been waging some sort of campaign against it. But the fall in tourism (and in German tourism in particular) which occurred needs to be seen against this background, as it also needs to be considered in terms of economic conditions.

While tourism in the Balearics in 2002 fell by 7.6%, the German market showed one of the heaviest falls: down 16%. Indeed, most markets were down that year. The British registered a small 1.2% drop. So, was this the result of the eco-tax?

The German economy went into recession at the end of 2001. Slight growth returned six months later, but weak economic performance was still evident enough by the start of 2003 for "The Economist" to feature an article entitled "Germany's Not Working" on 6 January. There were recessionary influences across Europe in 2002. The UK was an exception. Meanwhile, in Spain as a whole German tourism fell in 2002 by over 6%

The point is that the German market, which had roughly the same one-third share of all Balearic tourism as the UK market in 2001, was by far and away the most important reason why there was a fall in tourism in 2002. The 16% represented over 500,000 tourists. Therefore, was it just the eco-tax which contributed to the decline or did recession and those negative comments from politicians have as much impact if not more?

Moving on to 2003, though Germany was still stumbling economically, the German tourism market revived. As so often is the case (or certainly was before the prolonged "crisis"), confidence picked up relatively quickly. In 2003, and the eco-tax was still applicable until October, tourism in the Balearics grew by 6.6%. The German market was up by over 4%, the British by almost 7%. The losses of 2002 were all but regained.

These "objective data" suggest that in the second year of the eco-tax (2003), tourists - especially German tourists - had either accepted the reality of the tax or had shaken off anxieties caused by recession (a further anxiety, 9/11, has been widely accepted to have not been much of a factor in 2002). The growth in 2003 pushed total tourists numbers above those of 2001, when - and this is usually forgotten - there had also been a fall in tourism: before the eco-tax came in.

This isn't to let the eco-tax off completely. In 2002, for the five main sun and beach regions of Spain, the Balearics was the only one apart from the Canaries to experience a fall in tourism, and this fall - 7.6% - was much higher than the Canaries' 1.8%. Catalonia, meanwhile, had romped along with 15.2% growth.

Was the 2002 crash due to the eco-tax or is it a myth? Not totally. It did play a part, but how great a part is impossible to evaluate. One thing's for sure, it wasn't one million.

Conspiracy Of Silence: The "Stern" report

"Stern" is a German magazine. It isn't sensationalist but nor is it über-serious or über-important, like "Der Spiegel".  But like other German publications and media, "Stern" takes an interest in Mallorca which goes beyond the mere holiday angle. Mallorca to the Germans is almost a separate state.

In 2002, "Stern" laid into attitudes on the island which had caused a deterioration in the island's image as a tourist destination. Singled out for criticism was the tourism minister at the time, Celesti Alomar, who had uttered the infamous words - "cheap tourists are no longer wanted in Mallorca". The German consul was so put out by this that he reminded Alomar who it had been who had enriched the island; those "cheap" tourists of whom he had been dismissive.

Alomar was an example, as was Maria Antònia Munar, then at the Council of Mallorca, of a Mallorcan politician who, with their insensitive remarks about "cheap" tourists, totally failed to appreciate the link between the mass of tourism in Mallorca and cost.

And Munar is one who gets a dishonourable mention in the latest "Stern" study of Mallorca. She is referred to as having belonged to a "highly corrupt political caste", corruption being just one theme that "Stern" has chosen to feature in its current edition. The cover of the magazine tells you what to expect: "Mallorca, the dark side of the holiday island". Under the heading "the Mallorcan brand", the leader says that "behind the facade" is "a great mass of misery, criminality and despair".

The report itself, across ten pages of the magazine, features desolate urban scenes in Palma. There is a photo of a drug user, taken, it is said, after a visit to a drug supermarket in the shanty town of Son Banya. There is a photo of a queue for a soup kitchen. You can count around forty people in the queue, but you can't see where the queue ends.

A doctor in Calvia is quoted as saying that "this is an island of problems". He wishes to remain anonymous. The misery being as it is, "important people do not want it to be spoken about". This is one of the more striking observations made by the three journalists responsible for the report. A further one is this: "Business and justice on the island are closely intertwined. There are twelve families who exert significant influence. A quip goes thus - 'Mallorca is Sicily without the guns' ".

It would be revealing to know who these twelve families are and who the important people are, as these two observations allude to conspiracies of silence which demand that as little as possible is said that might harm Mallorca's paradise image and the interests of important people and important families.

In truth, there isn't a great deal in the "Stern" report that one doesn't already know. Drugs, violence, prostitution (reference is made to Arenal as opposed to Magalluf), lack of credit, poverty and the enormous and widening gap between rich and poor. They are known about.

I look through this report and it is as if it has collated things about which I have written over the years. It is not a report into the sensationalist goings-on in resorts like Magalluf. It goes much wider, considering education "it is not an investment, it is considered a waste" and innovation, or the lack of, "you become rich through nepotism and cunning not through innovation".

The report starts by painting a picture of this paradise island and of obscene wealth before revealing the darker side. It ends by considering the paradise that is enjoyed by one wealthy German businesswoman, Heidi Warth of the Mallorca Gold estate agency. It says that she still enjoys the good times, selling Mallorca's crown jewels, but that she has moved her assets to Zürich, fearing a Cyprus may occur, and she complains about a Mallorcan unwillingness to really change anything. She says that the quality of life is unlike that anywhere else but that it is only on the surface; "otherwise it is cruel".

This conclusion is perhaps the most astonishing part of the report. Here's a purveyor of the paradise image who has done very nicely out of it but who admits to the island's superficiality. Beautiful island but a suffering island; the beautiful people who are shallow people. I can already hear the sound of ranks being closed, of righteous, self-delusional denial. It is a report that is less revealing than the magazine might believe, but it is a report, nevertheless, that local media would be most wary of compiling. It contains truths, ones which, because of the conspiracy of silence, are too rarely confronted with honesty. 


Any comments to andrew@thealcudiaguide.com please.

MALLORCA TODAY - German air-traffic control strike

German air-traffic controllers are due to strike tomorrow for six hours (from 04.00 to 10.00 GMT). The strike will affect all of Germany's 16 international airports, most of which serve Mallorca.

Smiley, Smile

"The Balearics (are) a summer destination and in winter there are not many alternatives."

These are words that will not be music to the ears of anyone much in Mallorca or the other Balearic islands. And certainly not to a succession of tourism officials who have sought to promote Mallorca in the winter and to promote specifically its "alternatives". We are treated, through the words of these officials, to an endless diet of gastronomy, to an endless round of golf, to an endless tour of cultural sites. But to no avail. There aren't many alternatives. Who says so? TUI. And worse still, TUI Germany.

The moaning that occurs regarding the lack of winter tourism is primarily one inspired by the absence of British tourists and by the absence of aircraft belonging to airlines from the British Isles rumbling along the runway in Palma. There are tourists in winter, however, and they are mainly German, courtesy of Air Berlin's regular services from all over Germany.

Notwithstanding the winter lifeline that Air Berlin throws Mallorca, for TUI Germany to state that the Balearics are a summer destination should make tourism officialdom and all others who claim that there are alternatives to "sol y playa" (sun and beach) squirm in the vacuity of their endless desires to promote the alternatives. The desires count for little or nothing, as do whatever is meant to have been happening to realise them. "There is a lack of initiative to give life to the (winter) season." Who says so? TUI.

If it really wanted to, TUI could probably do something about the "many places that are dead" in winter (again, its words). But why should it? There are plenty of other places that aren't dead. Anywhere but Mallorca, let alone Ibiza or God-forsaken Menorca.

TUI Germany's director-general and his two able lieutentants were holding court the other day in Palma. The three wise men followed the ibero star to Mallorca, bearing gifts but unable to turn dross into gold. But what gifts they were. The level of all-inclusive will rise to 33% from its current 20. Gifts to the consumer who has driven the demand (says TUI). And the consumer is the gift to Mallorca this summer. "The level of sales is very, very good." And guess what type of hotel is increasingly enjoying these very, very good sales.

At roughly the same time as the kingdom of TUI and its court was assembling in Palma, elsewhere in the city a different type of court was amassing. The new kingdom of Bauzá. It must be utterly disheartening for a Mallorcan and Balearic leader to know that his own court is largely irrelevant and that the real power has just arrived from the north.

You know that story about the German businessmen who wanted to buy Mallorca. I've never known if there was any substance to it or if it was simply an urban myth. It doesn't really matter, because Germany runs Mallorca anyway. The castle and stripes are not the flag of Mallorca. The real one is a smiley logo. TUI's.

When TUI puts in its court-like appearance, it is offered tribute by the media and the lickspittles of officialdom. When Völker Böttcher, the TUI boss, speaks, it is as though there were a papal visit and address. What TUI says is far more important than anything that comes out of the Balearic parliament or from the mouths of a Balearic president or tourism minister.

It is in the gift of TUI to do something about winter tourism, were it minded to. And were it minded to, it would simply reinforce the fact that Mallorcan officialdom has been incapable of doing anything. This officialdom talks a good game - of golf, mainly - but knows, or should know, as TUI knows, that the only real game in town and across the island is sun and beach. It always has been and always will be.

It is also in the gift of TUI to do something about summer tourism. Like turning its back on it. It wouldn't do so, of course it wouldn't, but it can do pretty much as it wishes. Hence, a 13% increase in all-inclusives. What's to stop it? TUI can make or break the island. It's the real power. You just have to lump it, and smiley, smile.


Any comments to andrew@thealcudiaguide.com please.

MALLORCA TODAY - Potato exports to Germany stopped

In light of the cucumber crisis, exports of Mallorcan potatoes to Germany have been paralysed. With sales of cucumber having dropped by up to 80%, farmers will be making moves to seek compensation from Europe for losses in revenue. Some produce is having to be destroyed because it cannot be sold.

21st Century Schizoid Man: Multiculturalism

The German Chancellor Angela Merkel has pronounced. Multiculturalism in Germany isn't working. It's a big step for a leading German politician to take in a country where there is understandable reticence to engage in discourse that smacks, even vaguely, of racism and where there exists a worrying underground of neo-Nazism.

German multiculturalism can be traced back to the early '60s and the system of the "Gastarbeiter", primarily Turkish workers but also those from other countries, which included Spain. The Turks were the most obvious though.

It is the start of the 1970s. A curious ceremony is taking place, and I watch as Turkish Gastarbeiter board a train in Stuttgart, one or two beaten-up suitcases in hand. They are heading back to Turkey. The Gastarbeiter were meant to be temporary. Many did return, but by no means all.

Wind forward to today, and the situation in Germany is like other countries: diasporas, some members of which assimilate, some of which do not. Even the Turks of Germany who have become "German" are probably among those who regularly vote in sufficient numbers to give Turkey "douze points" from a German Eurovision audience. German multiculturalism, to use the word of Frau Merkel, has "failed".

Multiculturalism, either through intent or accident, is an idealistic state. It can function, insofar as diversity and the implicit non-integration of the concept can be said to function, so long as something doesn't come along to ensure that it doesn't. Tensions arise not directly through the existence of multiple cultures but through the cumulation of factors which makes their existence less than tolerable.

21st century schizoid man, he of indigenous origin, has been turned paranoid through such factors - economic dysfunction, terrorism, Islamophobia, for example - and by having to contend with the way they compete with his identity. He would rather, in disturbingly large numbers, even in countries with traditional tolerance like Sweden and the Netherlands, rid himself of the cultures. Or if they stay, they should conform to his monoculture. Speak the language. Eat sauerkraut or, more of a challenge for some, pork wurst. Put a towel out on the sun-lounger at six in the morning.

Frau Merkel believes that immigrants should make greater efforts at integrating. By learning the language, for instance. Hers is hardly an original view. It is one that has been expressed in Britain and in Spain. The leader of the Partido Popular, Mariano Rajoy, is one who has made such a call.

Immigration in Mallorca is regularly an issue which appears at the top of the list of social concerns as discovered through polls. In March, a poll found that seven out of ten Balearic islanders believed that there were too many immigrants. Press reports merely serve to reinforce a perception of immigrant criminality. Moroccan drug dealers in Sa Pobla. Latin American gangs in Palma. Nigerian prostitutes in Magalluf. Senegalese lookies all over the place. A judge once sentenced a Senegalese gentleman to learn the language.

Immigration goes hand in hand with multiculturalism and therefore with a lack of integration. Yet we are selective with what we mean by multiculturalism, or rather to whom it applies. The British in Mallorca are no less representative of one of the island's multiple cultures than Moroccans. But the British are seen, and see themselves, as excluded from this definition. They are part of the illusory and faintly absurd notion of a "European culture". I am a European. Define and discuss. They are nothing of the sort. Anglo-Saxonism is alien to Mallorca, as are the English language, "Coronation Street" and the full English. As with those from other cultures, cultural separatism and non-integration are a breeze when you can switch on Sky or pick up a copy of the "Mail".

Multiculturalism doesn't work. Or rather, it works very well in a free-market way. You can cherry pick from the "new" culture if you so wish, while not having to "go native". Which is how most like it. And why shouldn't they? What's the point of learning the language? Only so you can make sense of watching the telly. Therefore, there is no point when you can tune in to Ant and Dec.

Our meaning of multiculturalism is a pejorative for anything that veers too far from the cultural norm, and in Mallorca this norm has come to be broadly interpreted, as it is in the UK and in Germany. This norm isn't simply a question of learning the language, most certainly not. It's what falls outside of the norm that defines the anyone-but-me multicultural, with all the baggage of issues such as colour, religion and ethnicity that it brings. This broad interpretation excludes the British in Mallorca from the multicultural category, but lumps them into an alternative one - that of mini-cultural. Different but non-threatening. Mini-cultural maybe, but before we cast too many stones in the direction of the body with its head poking out of the sand of multiculturalism, we might bear in mind that we are all multiculturalists now.


Any comments to andrew@thealcudiaguide.com please.

Pieces Of Eight: Airports, airlines and taxes

A group of German MPs has been enjoying a late-season break in Mallorca. In between taking in the Peguera Oktoberfest and strolling along the proms with their lederhosen on, the MPs have been having a word or two in President Antich's shell-like. "We don't think much to the rise in your airport charges, Francesc, old boy."

I suspect that they expressed this rather differently, much as I also suspect that I have completely invented their trip to the Bierfest and their leather garments, but express concern as to the charges they most certainly did. Carriers estimate that increased tariffs for security, passengers and landing, planned for next year, could bump up prices by around 12%.

Klaus Brähmig, for it was he, gave the president something of a veiled threat. Put your prices up, and tourists, German ones that is, will decide to go somewhere else. Turkey, Greece and Malta. (Since when has Malta come into the German tourist competitive destination radar? Someone should warn the Maltese and put Alec Guinness on stand-by.)

If Antich was on the ball he might well have responded by pointing out that the Germans are establishing an eco-tax, as from the start of 2011. Eight euros a pop. Doesn't matter where you fly to in Europe. Eight euros it will be. He might also have pointed out that these charges aren't his. "Nothing to do with me, Klaus. You'll need to have a word with Mr. Bean in Madrid." Not such a bad suggestion as the Germans find Mr. Bean corset-burstingly hilarious, even, one imagines, a doppelgänger such as Herr Schumacher, i.e. President Zapatero.

Herr Brähmig had pre-empted the eco-tax riposte. German tourism in Mallorca will not be affected by the pieces of eight, he parroted. In other words, the German tax is ok, but the Spanish charges aren't. Of course, he may well be right about the German air tax. It is universal, so it affects every destination, be it Mallorca or Turkey. An issue for Spain and therefore Mallorca is what happens with charges elsewhere. Athens International Airport, for instance, froze its charges this year.

But do these taxes, be they tax to fly or airport charges, really have any great impact? The evidence from the UK would suggest that they don't, not where Mallorca is concerned at any rate; the air passenger duty is set to rise to twelve pounds next month. British travellers don't, though, have much alternative. German ones do. Lufthansa's Germanwings subsidiary, responding to the eight euro tax, has looked at moving flights from Cologne/Bonn to Maastricht, just over the Dutch border. The Dutch, having scrapped their own tax because it apparently did have an effect, might stand to benefit from a German airline's patronage. Air Berlin's director-general for Spain and Portugal, the former president of the Mallorca Tourism Board Álvaro Middelmann, has described the German tax as "totally absurd".

Nevertheless, unless you happen to live within easy reach of Maastricht, the eight euro tax is one you would be likely to accept. Why pay far more to get to an airport, so that you might just be able to save a euro or so overall? It wouldn't make much sense. The real issue with taxes and charges, where they are transparent to the traveller, lies with how much they are in proportion to the cost of the flight alone. The often excessive criticism of Ryanair is that they apply "hidden" charges. They don't. The additional fees, such as one for tax, seem high because the initial price is so low.

While not everything that emanates from Ryanair is always believable, everyone's favourite airline chief executive, Michael O'Leary, has spoken about changes to the airline's strategy. He has stated that the low-cost model is unsustainable. If Ryanair is paying serious attention to its pricing and product policy, and it is, then whither other low-cost airlines? Palma airport has a high dependence upon low-cost carriers. It is their pricing models which are important, not the taxes or charges. The challenge for Ryanair, which is likely to be one for other airlines, is to grow the business. And to do so requires generating higher yields from passengers. Which means higher prices.

Even if increased taxes and charges become lower as a proportion of the initial price, the overall price of the flight increases significantly. For Ryanair, Air Berlin, Germanwings and any other airline desperate to improve margins, any additional cost element imposed by governments is unwelcome. As they are unwelcome to politicians, when it's someone's else taxes rather than your own. Herr Brähmig does protest too much. He has a German airline industry unhappy at its own government's tax to keep onside, so he takes a broadside at Spanish air charges to try and show he is on the side of the German tourist and the German airline industry. It is a bit rich, and it also obscures the more important issue - that of future air prices.


Any comments to andrew@thealcudiaguide.com please.