Thursday, October 31, 2013

2.7 Million Reasons For Not Spending Money

The budget for the Balearics tourism promotion plan of action for 2014 will be 2.7 million euros. It is the same as the budget was for 2013 and the plan of action will be similar to that for 2013. It will entail 145 "promotional actions" and these will be along the same lines as the actions for this year - trade fairs (general and specialised), press trips and what are described as "direct and inverse days" (essentially conferences or forums of varying types that are concerned with specialised promotion for niche products).

2.7 million euros from a tourism departmental budget for the year of 74 million euros will strike many as being low. Too low probably. To put this budget into perspective, in 2009 it was 7.25 million euros. It was at its lowest since then in 2012 when it was only just over 1.5 million euros. The tourism minister Carlos Delgado is at pains to point out, however, that the average cost of the different actions is very much lower than it was and that there are many more of them. In 2009, there were 60 "actions" which cost on average 121,000 euros. In 2013, the number was projected to have been 107 but actually increased to 123. The average cost was therefore 22,000 euros.

Putting the budget into further perspective, how does it stack up against some other regions of Spain, those which are similar to the Balearics in being essentially sun-and-beach tourist destinations? The budget for the Canaries this year was seven million. In Andalusia it was 25 million, as it will be next year as well. In Catalonia the 2013 budget rose to 24 million thanks to the initial receipts from the tourist tax that had been introduced in November 2012. Catalonia's 2014 budget will go up substantially - probably to around 60 or 70 million, thanks to the tourist tax. Only Valencia has a budget comparable to the Balearics, 4.8 million for a two-year period.

It has to be said, though, that all of these regions have a larger overall budget than the Balearics, so they can afford to spend more if they so wish. Regardless of this, however, the argument will be that, because of tourism's importance to the Balearics, there should be a much higher promotional spend.

But when it is argued that the budget should be greater, what figure should be placed on it? And once the figure has been arrived at, what should be done with the money? There are too often some highly simplistic suggestions as to what the Balearics should be doing in terms of promotion, many of them to do with running television advertising campaigns, a means of promotion which is expensive and is questionable in terms of return. What did the Balearics ever gain from the awful ad with Rafael Nadal? No one can tell you with any honesty.

Having a limited budget is in a way a good thing. It means that the money has to be spent wisely and in the most effective manner and hopefully in the most creative way possible. But whether various trade fairs and so on that make up the Balearics promotional actions are the most effective manner is a fair question to ask, and it might be noted that Palma has opted to reduce its dependence on trade fairs for its Palma 365 promotion. There again, Palma is treated as a separate "brand" and has specific promotional actions under the Balearics plan of action, so perhaps Palma doesn't need to devote so much of its own attention to trade fairs.

The key to any promotion, regardless of the budget, is its effectiveness. While I doubt the effectiveness of traditional campaigns, such as TV ads (very difficult to evaluate in any event), I have to also wonder about the effectiveness of trade fairs and the other "actions". At least these events give the opportunity to get close and personal with tour operators and other important decision-influencers, but as the regional government effectively gave joint-promotional campaigns with tour operators the boot a couple of years ago, it's important that lines of communication are still maintained.

Behind this tourism promotion, though, is the thinking contained in the government's comprehensive plan for tourism 2012-2015 that was drawn up by the current government. It is comprehensive. 120 pages of it, replete with all manner of tables, graphics and strategy-speak. It is an impressive document, and contained within it is an explanation that public promotional spend on tourism has been inversely proportional to results. There is also a policy announcement, one that places emphasis on "below the customer" promotion (trade fairs etc.) and "embrace the customer" (all manner of technological applications) versus "above the customer" (TV, press ads for example).

This is the Bible from which the tourism ministry is operating. It may not be the right Bible but God knows it's an impressively thought-out one. Instinct suggests that promotion that is being undertaken, and which is being justified by this comprehensive plan, is something on the cheap. But when one looks at this plan in detail, there is much about which makes a lot of sense, if only it were to be realised. All the stuff about web technologies is fine, but where, as yet, is the proof.

But if you want to know why there is only 2.7 million euros being spent on tourism promotion and if you can be bothered wading through 120 pages of what is akin to an MBA thesis, then you can find the reasons why.

Index for October 2013

Air Berlin, hoteliers and Sea of Experiences - 4 October 2013
Aragon tourist apartments regulation - 30 October 2013
Balearics and state investment budget - 7 October 2013
Balearics tourism promotion - 31 October 2013
Bill Gates and foreign investment - 29 October 2013
Bull as a tourist image - 14 October 2013
Cala Millor - 21 October 2013
Calas de Mallorca, Cloud Destination - 24 October 2013
Creative city and creative island - 22 October 2013
Danny Higginbotham and Gibraltar football - 6 October 2013
Demolition of old buildings in Pollensa - 12 October 2013
Education reforms in Spain and the Balearics - 10 October 2013
Holiday rentals - 11 October 2013
Ibiza hippie island - 9 October 2013
Joan March: illustrious or notorious - 13 October 2013
Magalluf greater security - 20 October 2013
Menorca biosphere - 5 October 2013
Palma promotion - 25 October 2013
Regional government financing - 15 October 2013
Religion and Mallorca's alternative tourism - 16 October 2013
Sa Canova holiday complex - 18 October 2013
S'Illot tourism history and prehistory - 26 October 2013
Spain and the economy - 19 October 2013
Spain's amnesty law challenge by UN - 2 October 2013
Teachers strike - 1 October 2013, 3 October 2013
Tourism commissioner - 23 October 2013
Tourist tax - 17 October 2013
Zapatero's memoirs - 8 October 2013

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