Saturday, July 20, 2013

The Scandal Of Mallorca's Residential Tourism

The term "residential tourism" can mean different things. When the national government listed this as a strategic advantage in its most recent tourism plan, it had in mind tourism by foreigner owners of property, those who come for parts of the year or whose families come for parts of the year. Residential tourism, in this respect, is considered a "good thing". It is good because of the economic benefits of property purchase, it is good because of the economic benefits of service provision for maintaining and managing properties when owners are in their home countries, it is good because of the economic benefits that these owners and/or their families bring to local supermarkets, restaurants and other businesses. The national government sees this residential tourism as a strength, one to be encouraged further as part of its overall strategic tourism plan.

The national government is of course being selective in its interpretation of the meaning of residential tourism. There is a whole other residential tourism it will not admit might also be a strength. By not admitting this, it is doing tourism in general and the economy in general a huge disservice.

In a recent interview, the director general of Taylor Wimpey in Spain spoke about the great potential for residential tourism, and so he spoke about something that is in line with government thinking, but because the government will not admit that residential tourism means more than it wants it to mean, he - the director general - recognises that builders such as Taylor Wimpey are disadvantaged. And no more so than in the Balearics.

National government, having taken a strong line against the so-called illegal offer of holiday rental accommodation, is contradicting its own position. It won't admit it, because it won't or can't admit what is understood by many, including builders like Taylor Wimpey. The director general didn't wish to be drawn, but it was obvious what he thought. He was quoted as saying that "only Mallorca has spurned residential tourism".

And in Mallorca and the Balearics, this spurning means that there is the situation whereby the tax office and the tourism inspectorate are now going around knocking on doors of villas and apartments and acting in the tough way that they have long threatened to. The day has finally and truly dawned. A campaign, using information easily gleaned from the internet, of turning up at a property and demanding that holidaymakers produce evidence of legal rental, is underway.

While apartments are usually considered to constitute the illegal offer, villas and detached houses can also be a part of this. Under the tourism law, such property can be "commercialised" (i.e. marketed and advertised as tourism accommodation) in one of two ways. One is through an agency, the other is through the owner establishing a business and registering it in Mallorca. There is no other way. And either way, what really matters is that tax revenues are paid locally.

I was intrigued to hear that inspectors have been demanding to see invoices from those staying in rental accommodation. Why would someone necessarily have an invoice? Having spoken with the owner of an agency in Alcúdia, I now know. This agency gives all its tourist clients a copy of a rental contract as well as an invoice which shows IVA (value added tax). This documentation - in Spanish - confirms the legitimacy under the local tourism law of the rental.

It is interesting to note reactions of Mallorcan and Spanish people. Comments to newspaper articles about this campaign (which does also of course affect Spanish owners) are almost unanimous in condemning the government. Contrast this, though, with what is almost a complicit acceptance by the media of the government's position.

Why, I increasingly wonder, because of the massive harm the government is going to cause, is the tourism minister Delgado or the director general for tourism, Martínez, never subjected to a true grilling? It just doesn't happen. Yet, the undermining of residential tourism borders on the scandalous. It is also incompetent, because of the economic damage it can do. How can the government reconcile the potential losses from private accommodation and the losses that are being made because of the growth of all-inclusives and the general lowering of tourism spend?

Why does the media here not take the government to task? Why does it not challenge its line on rental accommodation? There is a scandal being played out. One of potentially massive economic harm, and no one seems to dare to ask questions. Why?

Any comments to please.

No comments: