Friday, February 22, 2013

History Repeating Itself?: Russian tourism

During the early years of what came to be mass tourism in Mallorca, a number of factors coalesced in order to bring about this massive foreign invasion. While there were general factors, such as economic growth in Europe and advances in air transport and infrastructure, internal Spanish factors were equally as important. Hotel developments had to be of a more sophisticated order so as to match expectations of this wealthier foreign market. They were assisted by the system of hotel credit as well as by foreign investment that the Franco regime no longer spurned. There were currency adjustments in order to attract much-needed foreign exchange and there were also liftings of visa requirements.

Between 1960 and the shock of the oil crisis of 1973, tourism to Mallorca grew at a staggering rate. In 1960, just over 350,000 tourists came to Mallorca. By 1973, the figure was almost three million. Nowadays that figure has all but trebled, but it is those early years which are particularly instructive when one considers what might just prove to be the second great wave of foreign tourism - Russian.

At the meeting in Palma this week between the national tourism secretary-of-state Isabel Borrego, President Bauzá and Russian tour operators, it was emphasised that Russian tourism has become a priority, both for Mallorca's tourist industry and Spain's. Reflecting this priority, Bauzá will attend the Moscow travel fair next month. His will not be the first visit by a Balearics president; his predecessor, Francesc Antich, also made a point of going to Moscow.

Russian tourism to Mallorca still only accounts for a relatively small percentage of total tourism. The around 100,000 tourists to the whole of the Balearics during 2012 are dwarfed by the numbers of British and German tourists, to say nothing of French, Italians and Scandinavians. But it is the potential growth of Russian tourism that makes that market a priority. If the current growth pattern were to continue, by 2020 there could be a million Russian tourists coming to Mallorca: a ten-fold increase, just as there was a ten-fold increase in total tourism between 1960 and 1973.

There are similarities between those early years and what is now happening. A more affluent and growth economy (that of Russia) meets improved air links (and the regional government is particularly keen for there to be more air routes in the off-season) meets more sophisticated hotel development meets high-spending foreign exchange providers meets visa restrictions being lifted: Spain is applying pressure on the European Union to remove the need for tourist visas.

Of these factors, hotel development (and also resort development) is one of the more intriguing. The Russian market, as we have been told repeatedly, has a certain expectation. It is one that is more inclined towards the luxury end of the market. Has this expectation been the real motivation for shaking hoteliers out of their years of stupor and for making the regional government bring about legislation that enables hotel and resort modernisation? If it hasn't been, there is nevertheless the enormous coincidence of hoped-for riches from a new market.

One can see for oneself how the priority is manifesting itself. In Magalluf, the first language on signs that might once have been English or Spanish is now Russian. Would in fact the developments in Magalluf have been so rapidly undertaken had it not been for the expectations of this Russian market?  

Magalluf is only one resort. To accommodate the fast growth of Russian tourism with its specific requirements, other resorts have to adapt. But the question is how. There isn't the factor of the hotel credit as was the case in the early years. There isn't any credit full stop, but there is seemingly little shortage of actual and potential foreign investment. The developments in Canyamel and Sa Rapita would draw heavily on overseas cash. Those which might yet emerge, such as one in Puerto Pollensa, would probably also draw on foreign money. Financing isn't necessarily the issue therefore. What is, as has been highlighted in Magalluf, is the issue of planning - urban planning to allow for the resort upgrade and probably also strategic planning to meet the challenges created by the new Russian market.

But when it comes to strategy, what are the consequences of this new market? Is it envisaged that total tourism numbers will simply grow? If so, where are all the tourists going to stay? The regional government has denied that there will be a reversion to the sixties and all manner of new developments. If there aren't, then something has to give. And is what gives the current size of traditional tourism markets? Like the British?

Any comments to please.

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