Friday, March 07, 2014

The Certainty Of Mallorca

This is the week of the Berlin ITB travel fair, the biggest of the winter's fairs and the last one before the season commences. It was the scene of acute embarrassment for the Balearics last year when a stripped-down presence reduced to the stand to hiding itself away inside the grander pavilion for Turespaña, the budget having been slashed by over half a million euros. One critic, from the socialist opposition, denounced the "ridiculous size" of the "chiringuito", saying that it undermined any impression of international prestige at a time when the islands' tourism was not certain.

This year, the Balearics tourism agency is once more sharing with Turespaña. Indeed, it also has the Palma 365 Foundation, Manacor town hall and the Cala Millor hoteliers to keep it company. No doubt there will be more criticisms. But are they really valid?

Fairs such as Berlin's are an exercise in showing-off. The bigger, the better the stand, the greater the kudos. It doesn't automatically follow that bigger and better mean more business. Perhaps Mexico, the fair's official "partner" this year will secure a substantial rise in tourism. Or perhaps it won't. Putting on a show only amounts to so much.

The travel fair plays to different audiences. The public, only admitted for two days, is one, but it is less important than the tour operators and other decision-makers, and the fact is that these decision-makers do not make decisions based on the nature of an exhibition stand. The fairs are talking-shops and networking opportunities for the travel and tourism industry, but much talking and networking occur without the need to attend fairs. Size of a stand doesn't really matter, and one only has to consider some of the news coming out of Berlin to know that it doesn't. Far from the islands' tourism being uncertain, as was alleged last year, it couldn't be much more certain. Tour operators are on the prowl, buying up hotels in Mallorca in order to guarantee beds for the next few years. Mallorca's tourism is certain, because Mallorca's tourism is safe. This has been a key message over the past few years. While other destinations have experienced problems, such as unrest, Mallorca has kept going on its own sweet way, causing very little or no trouble.

Avoiding trouble is the key to tourism success. Tour operators need to minimise risk, just as tourists need to know there is minimum risk where their holidays are concerned, but one piece of trouble might yet loom, and that is the threat of strikes in the hotel sector. They are never far away from being a possibility, given the somewhat volatile nature of certain unions, but the current round of wage negotiations for the coming season are stalled; the unions are looking for at least a 3% rise, but the hoteliers aren't budging an inch.

The unions, though, can point to price rises by hoteliers and ask, perhaps legitimately, where are our rises. Some concern has been expressed by tour operators who believe that the quality of some of Mallorca's hotels does not match the prices being demanded by the hoteliers. These tour operators are not about to accept any additional prices because of higher wages, and it is this price-quality equation which goes to the heart of much discussion of Mallorca's tourism. A reason, only one, why hotels don't open in winter and why Mallorca is a less than attractive proposition is because prices and so therefore costs are that much lower in other parts of the world. The tour operators can extract far higher margins as a consequence.

And if the tour operators are buying up hotels - as also are foreign investors, such as those from China - they are likely to insist on a harder playing of the hardball with unions. There may be an at-times frosty relationship between unions and Mallorca's hoteliers, but add multinational, foreign ownership into the mix and the relationship could be destined to become tundra-like.

The prognosis from Berlin is very positive, but down the line might there be trouble? The current round of wage negotiations will say much, and they are being conducted against a background of the hoteliers asking the regional government for specific legislation to limit the possibility of strike action in the tourism sector, a demand that is naturally opposed by the unions. If there were to be strikes this summer then the certainty of Mallorca suddenly becomes less certain.

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