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.