Playground Of The Rich? Mallorca's luxury tourism

The rich get richer and the tourism of the rich offers ever greater riches. Airtours, TUI's luxury tourism division, will be increasing the number of wealthy German tourists that it brings to Mallorca by 25% this year. As with the luxury property market - Engel & Völkers having recently issued positive forecasts for its German sales in the 4 to 8 million bracket - so luxury tourism refuses to succumb to the savaging of economic crisis.

Mallorca, despite competition from the likes of Sardinia, continues to hold an appeal to wealthy tourists, Germans in particular. The island is also benefiting from an increase in the niche gay luxury tourism market. The company Mallorca Luxury Gay has added a further element to its offer to gay tourists, that of high-quality dental treatment, in a bid to increase its market on the island for a tourism group that typically spends more significant amounts than the "straight" market.

Positive though this may seem, the luxury market, assuming one can arrive at an exact definition as to what it means, remains small. In Spain as a whole, according to a report in 2008, the luxury tourist, said to spend some 450 euros a day, was catered for by five-star accommodation that amounted to a mere 6% of all hotels. The spend equated to just over 7% of total tourism outlay.

One of the difficulties with increasing this market lies with the costs of creating the right type of hotel and of maintaining it. The prices that can be charged, high though they may be, do not necessarily result in high returns. The profitability of the luxury hotel, compared with other destinations, such as the Caribbean, is weighed down because it is simply that much more expensive to run it. This is exactly the same equation that dogs hotels' abilities to provide superior-quality all-inclusives such as those in Turkey where there are four individual categories of all-inclusive - from "classic" to "ultra class".

It is this price-quality-return conundrum which puts into some perspective the desire of the Mallorcan hotel federation to upgrade hotel stock. The luxury market may have deep pockets, but the market itself isn't so large that it can compensate for the investment needed to attract it. And there is a further issue, one that has to do with where these hotels are located.

To take an example, in Playa de Muro there are 33 hotels, three of which are five star and several more of which are excellent four star. An up-market image of hotels is not, despite a fine beach, matched by what else the resort has to offer, namely parts of it in a state of virtual abandonment and, with the greatest of respect, a lack of genuinely quality restaurants. Rather, you have an almost uniform offer of the standard "grill" and pizzeria.

The restaurants are caught in a dilemma. They may wish to invest, may wish to change their cuisine, but to what end? They have come to realise full well that the image of all-inclusive being exclusively for the economy-class tourist is something of a myth. It only partially applies in Playa de Muro, and in a wider context it is applying less and less; demand for all-inclusive within the higher, 4-star end of the market has increased and is likely to go on increasing if what exists outside hotels is unable to match this market's more sophisticated tastes, assuming that the hotels can actually deliver the required service. But do the restaurants adapt to try and capture this market when they fear that such effort will be undermined by the all-inclusive offer?

What is on offer in restaurants is, though, an important ingredient when it comes to the luxury market. All the attention that is paid to some of the "alternative" tourism offers, notably gastronomy and golf, is understandable if this market is to grow significantly. Both these are cited as important aspects of attracting the luxury market. In Playa de Muro, the obstacles to the building of the golf course on the Son Bosc finca are seen as detrimental to the expansion of the market.

Crucially, however, the question is whether this luxury market will grow significantly and whether the investment to make it grow will be matched by results. There is, and has long been, an element of wishful thinking, some of which is now being turned towards the nouveau riche of Russia and eastern Europe. Nevertheless, if TUI is increasing the number of its minted Germans, then there is cause for some gentle optimism.

The issue will be whether Mallorca has the quality of hotel and, as importantly, quality of resort to make anything like a quantum leap. And, as has been seen with Playa de Palma, the hoteliers, pressing for upgrades and the removal of bureaucratic hoops that would facilitate them, contradict themselves by insisting (not unreasonably) that the bread and butter remains the 3-star mass tourist.

And there is lurking perhaps an additional issue, a social one. Mention of Sardinia as a competitor to Mallorca in the luxury market is a reminder of what surfaced there back in 2008. Wealthy and celebrity tourists being greeted with barrages of wet sand and cries of "louts, go home" as their motorised dinghies came ashore.

Wealth is very welcome, but in times of deprivation, more of it, ostentatiously on show, does not guarantee a welcome.


Any comments to andrew@thealcudiaguide.com please.