Re-thinking Resorts: Magalluf and hotels

"To build four hotels with 2000 rooms, where on earth are they going to find the people to fill them?"

This was a question posed by Sue of Magalluf the other day in "The Bulletin". It's a reasonable question. And to an inability to fill existing hotels can be added anti-social behaviour in the resort as a reason for questioning the wisdom of the new development.

Though plans for these hotels may have been in existence, the government had implied that its revision of the tourism law did not envisage new developments. Indeed, all the noises that have come from the government, and the previous one, had suggested that there was a preference for a reduction in hotel stock, as has been the plan for Playa de Palma.

Now, however, we have a situation in which, in addition to four new hotels in Magalluf, there will be new complexes in Campos and Capdepera, both of them established in principle for some years.

In Magalluf's case, there is, unlike for example the luxury development contemplated for Canyamel in Capdepera, a marketing problem. It is one of image. Both the new Viva hotels and the overhaul of current hotels that Meliá is to embark upon come up against Magalluf's reputation.

Magalluf is a cracking resort, primarily because it is so bonkers, but to suggest that it enjoys a reputation for more than just the good old family holiday and the lads and ladettes on tour would be wide of the mark. If Meliá and Viva are going to make their plans work, they are also going to have to work damned hard on re-branding the resort. Are they aware of the "Shagalluf" nickname?

If Magalluf is to undergo a four-starring, then it needs to acquire a four-star reputation. Meliá and Viva will doubtless achieve this in their own developments, but a dog of a resort having previously been given a bad name creates a stumbling-block. Meliá may be able to spin a Sol Calvià Resort name within a resort, but they can Sol, Calvià and Resort all they like; Magalluf is Magalluf. Changing the style of the resort by changing the style of hotels will ultimately, one would imagine the thinking is going, change the style of tourists, but you have to attract them in the first place. This will require more than just some new hotels.

It won't be easy, but it may be easier if this is a reconceptualisation of a resort with new or different markets in mind, i.e. not predominantly British. It is just conceivable to consider that within ten years Magalluf will be a very different place with a very different tourism profile. But old habits die hard, and no more so than among tour operators for whom Magalluf has represented a solid product for a solid and traditional tourism market, namely the Brits.

Notwithstanding the challenge of re-branding, filling hotel places might not be the problem it appears. The tourism law will permit change of use of some hotels. Meliá already contemplate this in their redevelopment. If this change of use is to residential use, then the existing hotel stock is whittled down and is replaced by the new. It is quite a sophisticated solution to a problem in Mallorca, which is one of land that is designated for either tourism or residential purposes.

By changing the use of existing real estate, the availability of residential accommodation can increase. New hotel developments gobble up some new land, but relatively little. The total number of hotel places may therefore end up being roughly the same as at present, so filling them will be no more of a problem than it currently is.

It is a neat idea. Though the government may not have been entirely accurate when it suggested that there would not be new developments, the new law does make a great deal of sense: freeing up real estate for living purposes while also setting in motion an improvement in hotel quality. But change of use is key to the whole thing, and here the government has fallen victim to the interests of the town halls. It has been forced to bow to pressure that means town halls, and not it, will still have the final say as to whether there is a change of use or not. Calvià might not pose too much of an obstacle if Carlos Delgado can still wield some influence, but this can't be relied on. The government should have had the courage to tell the town halls to get lost.


Any comments to andrew@thealcudiaguide.com please.