Thursday, October 17, 2013

Is It Time For A Mallorcan Tourist Tax?

The CCOO union in Catalonia has produced a report on tourism performance between January and August. The report includes figures for the number of visitors over this eight-month period, the number of overnight stays and for the average length of stay. To sum up, there has been a slight fall in the total number of visitors, one brought about by a dip of over 7.5% in the national market. Foreign tourism has, on the other hand, increased by more than 2.5%. The volume of tourism is not as interesting, however, as the figures for overnight stays and length of stay. Both have risen, not dramatically by any means, but they have still risen; respectively, they are up by 1.1% and 2.5%.

Why is Catalonia's tourism performance of interest and why in particular is information regarding stays of interest? The answer is Catalonia's tourist tax. It was introduced at the end of last year. It has not resulted in a fall in either the number of overnight stays (on which it is charged) or in the average length of stay.

One can always look to external events in order to explain tourism performance. Those in Egypt and Turkey can be and are used to partially explain why Mallorca's tourism performance has been better this year. So they can also be used to explain performance in Catalonia. But setting external events to one side, the fact is that Catalonia's tourism appears not to have been unduly affected by the introduction of the tourist tax.

While the CCOO has been producing its report, the hotel association on the Costa Daurada, which includes Salou, has been producing its own report. Included in this is a call for hotels and the private sector to have a greater say in how the tourist tax is used, as it is devoted to tourism promotion. This in itself is interesting. Nowhere does the report question the tourist tax, merely how it is allocated and who gets to decide. And this is a hotel association.

Last month, the Catalonian minister for enterprise and employment announced that the number of foreign tourists between January and August had risen by 6% over the same period in 2012. The figure is therefore higher than the CCOO has reported. Even allowing for different means of calculation and different motivations for presenting information, the government and the union agree that there has been an increase. And this increase had, by the end of the second quarter this year, contributed to bringing in 19 million euros from the tourist tax. The expectation is that, once the high-summer quarter is factored in, the tax will have raised 42 million euros by the end of the year.

Catalonia attracts more tourists than Mallorca and the Balearics. An indicator of this is that by the end of August the total number of tourists was already higher (11.35 million) than that which the Balearics can probably expect for the whole year. Though a larger market, Catalonia isn't that different to the Balearics, except in one quite important regard. It has a very significant camping holiday market, while the number of hotel places is in fact lower than the number for the Balearics. The hotel lobby in Catalonia is, while powerful, not as all-powerful as it is in the Balearics. It is revealing that the Costa Daurada hotel association appears to have embraced the tourist tax, and this contrasts with how the Balearics hoteliers perceived the old eco-tax. They were horrified and did whatever they could to get rid of it. And they succeeded.

The Catalonian tourist tax is different to the eco-tax in that it is not discriminatory. All types of accommodation are included. The eco-tax placed the onus on hotels and excluded certain types of accommodation. It was partly because it was discriminatory that there was the level of objection that, not unreasonably, there was.

Opposition parties in the Balearics, notably the Més grouping, continue to press for the introduction of a tourist tax. The regional government has consistently rejected the call. The hoteliers have made it perfectly clear that they don't want one. But Catalonia has shown that the tax does not seem to have had a negative impact. It will provide funds for tourism promotion of the level that the Balearics can only dream about.

A tourist tax would be unpopular, but there is a moral argument for one as well as an economic one. Tourists use resources for which they do not contribute in a direct monetary way, unlike businesses and residents. A tourist tax for the Balearics does at least deserve a new and full debate.

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