Making A Return?: The Palacio

Tucked away among the offers that Carlos Delgado appears to believe will contribute to the Balearic Government's grand scheme for making winter tourism slightly more than the total washout it currently is was mention of congresses. And during Delgado's meeting with the hoteliers federation the other day, one topic which reared its head for discussion was our favourite paralysed project, the Matas palace of congresses, i.e. Palma's Palacio de Congresos.

I don't apologise for revisiting the congress centre yet again. It is an important project, if only because it is losing so much money and because hardly a day goes by without something emerging which makes the day when (if) it finally rises from the ashes of crisis and ineptitude appear ever more distant. We now know that the private sector is wary that the numbers don't add up and so is keeping its distance. We also know that the national government isn't about to help out by chipping in the 30 or so million euros that would kickstart the building again.

Furthermore, we know that there is a great deal of blame being thrown around. Delgado has pleaded for there to be an end to looking for people to blame and to "demonising" the private sector for what, as things stand, is a failed project. Yet, we also know that Palma town hall, flatly refusing to toss any more of its cash down the palace's money pit, has made it clear that it was the private sector - the hoteliers in other words - who wanted the congress centre in the first place, thus intimating that they should get their wallets out. Perhaps Delgado, during the meeting, was asking what sort of loose change the hoteliers might have kicking around.

The town hall may be right up to a point, but if the project was solely one demanded by the hoteliers, then there were certainly politicians who were only too happy to listen to the demand and respond in an accordingly positive fashion. One of them was former president Jaume Matas, and if there is any further need to be wary about the whole project, it is the very fact that any Matas-era initiative should make everyone somewhat cautious.

Delgado is right, though. Playing the blame game won't get the damn thing built. Much as I have serious reservations about the project, because of its history of stuttering progress and because of Matas, my greatest doubt has concerned its contribution, especially where winter tourism is concerned. If it is to be finished, the business case for what it might realise needs to be made clear, as indeed it should have been made clear before it was ever embarked upon.

Self-serving though the figures may be, there is at least one organisation that appears able to shed some light on the type of return the Palacio might make. And these figures paint a potentially very much more positive view of the project and therefore of the sense in getting on with it.

APCE is the Asociación de Palacios de Congresos de España, its membership comprising 37 congress and convention centres across Spain. You would expect it to issue favourable information, but if we take it at its word, a report it has issued suggests that there is an 80% return on investment (ROI) - in one year - on the cost of the construction of such centres. This is an extremely simplistic way of extrapolating from its numbers, but on a total investment of 1,500 million euros on the various conference centres, in 2011 alone there was an "economic impact" of 1,200 million euros.

What APCE means exactly by economic impact is hard to say - it probably doesn't mean a direct ROI but rather a wider benefit - but it is one that should, nevertheless, make even critics such as myself sit up and take note. Added to this is the fact that, or so says APCE, international meetings business in Spain has grown by 100% over the past ten years.

Caveats to this, in addition to any possible limits to growth in the market for MICE (meetings, incentives, conferences and exhibitions), are, where Palma is concerned, its weak international air links in winter and the fact that it isn't a major city. Though Spain ranks number three overall in the list of destinations for MICE, Barcelona and Madrid, between them, account for well over half of all the meetings events; Barcelona, the third highest ranked city in the world, is the only city in the global top twenty, with the exception of Istanbul, which isn't a capital.

Caveats or not, the APCE figures do give cause to believe that Palma's Palacio might not be a total waste of money. But then how much more money is going to be wasted before it is finished? If it is ever is.


Any comments to andrew@thealcudiaguide.com please.