Monday, April 28, 2014

The Political Reason For All-Inclusive

"All-inclusive is a desperate effort by tour operators to maintain their operational capacity in our country. It is a short-term strategy while they resize their strategy and prepare new products ... All-inclusive is not the future for our country."

These were the words of Celestí Alomar, who was Balearics tourism minister during the first PSOE-led government from 1999 to 2003. He wrote them the year after PSOE had lost the 2003 election. It is clear that Alomar felt that the all-inclusive would die out and that it had been a response to what had been a trend away from the traditional package holiday. It is also clear that he was wrong and that there were further errors in his analysis. He spoke of the Spanish hotel industry having been, up till that point, reluctant to embrace all-inclusive and that, in 2004, it was something of a novelty.

He may have been right to point to novelty where Spanish tourism in total was concerned, but where the Balearics were concerned, he had seemingly forgotten what he had said in 2001. Two years into his position as minister, he gave an interview to the German magazine "Focus". In this he referred to the eight million tourists who came to Mallorca each year, roughly a half of them German, and to the all-inclusive offers that German tourists were taking up.

That interview caused a considerable stir, not because of the reference to all-inclusive but because Alomar was signalling the intention to radically reduce "mass tourism". Together with colleagues in the former Unió Mallorquina, policy was drawn up which sent out a message that Mallorca and the Balearics were no longer interested in the regular German tourist. It provoked a great deal of anger. When the eco-tax was then introduced (Alomar was partly responsible for it), the German market slumped. It was taking its revenge for both the insult implicit to the message of the interview and for the tax (though it should also be pointed out that the German economy was in its own slump at that time).

It is true to say that the traditional package holiday was under threat. It is also true to say that all-inclusive was a response to this threat. But when, in 2004, Alomar spoke of "irreparable damage" that all-inclusive could cause, he neglected the damage that he, Joan Mesquida (finance minister in the PSOE government) and Maria Antonia Munar (with her infamous utterances about Mallorca only wanting "quality" tourists) had sought to inflict.

Though one can't talk of there having been a co-ordinated counterattack, tour operators and hoteliers went on the counterattack. They responded to governmental policy and messages and to the eco-tax with what was a weapon of last resort - the all-inclusive.

In 2005, two years into the Partido Popular administration of Jaume Matas, the then tourism minister, Joan Flaquer, attributed the increase in all-inclusive to the "weakness" of the Balearics as a holiday destination. Flaquer was alluding to something of a "crisis" in the local tourism industry, detectable from 2002. He stated that his government and its policies were not the reason for the rise in all-inclusive. He was placing the blame firmly on the previous administration.

Alomar's "novelty" factor was plainly wrong in the Balearics context. In 1998, the year before he became PSOE's minister, it was reckoned that there were twenty hotels in the Balearics which offered all-inclusive. By 2003, when PSOE lost the election, there were 129. In fact, this rise was almost totally observable in 2003.

Business strategies quite separate to any political issues in the Balearics have to be taken account of, but is it an exaggeration to suggest that there was an all-inclusive-led counterattack? Is it inappropriate to talk of there having been a direct link between attitudes and policies of the PSOE administration and its Unió Mallorquina allies and the massive increase in the all-inclusive offer?

Flaquer tried, in both 2005 and 2006, to allay fears regarding all-inclusive. In 2005, he stated that the number of establishments offering it was plateauing. He was to be proved wrong. The following year, he spoke about a campaign involving the tourism and health ministries which was part of a set of measures to regulate all-inclusive. There was to be specific quality certification; there were to also be intensive inspections of hotels. Regulation was not proscription (it couldn't have been without a massive legal backlash), but the limited regulation that was supposedly introduced proved to be toothless.

Because of strategic product changes by tour operators, it can be too convenient to attach political blame for the explosion in all-inclusive. But when PSOE in Calvia, in a barely disguised, self-serving, pre-election move, now demand action against all-inclusive, the party there should remember what happened between 1999 and 2003.

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