Friday, August 12, 2016

Low-Cost Pejorative Or Imperative?

A pejorative is a word or term that carries negative connotations and is used to criticise, belittle and express a low opinion of an individual or a group of people. it can therefore be deployed, and is, to convey a lack of respect or hostility towards social classes or specific groups which share common characteristics. Depending on how they are expressed and on the context, certain words can assume the status of a pejorative. Expats is a good example.

A further one that is highly germane to Mallorca's socioeconomic circumstances is "low cost". Normally used as an adjective, it has become a substantive in its own right. Low cost as a concept is ipso facto a "bad thing", as it assumes a negative consequence by the very fact that cost is low.

We currently have a great deal of low cost to contend with, all of it business-related and, by implication, also associated with social class. Low Cost Travel Group is an obvious case in point. The name itself, which would have been looked upon in a pejorative manner by many even prior to its collapse, always had an inherent marketing conflict. Attractive to some, it would not have been to others. Because of the collapse, the naysayers will now claim that they were right all along. The business model, regardless of cover from bondholders or not, was flawed on account of the low-cost philosophy.

This isn't and shouldn't be the only conclusion to be drawn. Low cost doesn't have to mean an in-built business weakness. Indeed, the online travel agency would have been inspired by the very success of companies which have made a virtue (and lots of money) out of being low cost. Ryanair is one such.

Airlines like Ryanair have of course been condemned for a variety of reasons: sharp practice, not being as low cost as they might appear and rotten service. But the low-cost model for airlines has become so pervasive that it has overtaken regular airlines in terms of passenger numbers coming in and out of Palma's Son Sant Joan. To the ranks of Ryanair, easyJet, Norwegian, Vueling and others are to be added Air Europa Express, a belated attempt by Globalia to enter the low-cost market, and one which was met with the threat of pilot strike action.

It is informative that statistics are regularly released which indicate the level of this low-cost travel. This is informative not just because of the factual data but also because there is a sense that the data are presented with a pejorative in mind. There is a great deal of resistance to "low cost" in Mallorca of whatever kind it might be. It is a "bad thing".

The assumption, a totally false one, is that if a service is marketed as low cost it will automatically attract a class of traveller castigated by the unthinking pejorative of "low quality". We all know that some travellers are far from well-off, but the folly of this assumption was no better exposed than when the former president of the Majorca Tourist Board expressed it. The response was one of outrage from those who are perfectly well-off, thank you, but who still use low-cost airlines.

The assumption has been shot to pieces even more by an understanding of markets which reveals that consumers - filthy rich, better-off or on their uppers - are now so savvy that they seek out deals. The internet and social media have made this ever easier. Consumers, regardless of circumstance, aren't stupid. If they can spend less, if convenience is satisfied, then they'll make decisions based on these factors. There are naturally those whose aspirations and self-esteem (as well as money) would mean never willingly opting for the pejorative of low cost, but even they might have to if competition has made low cost the main or only option.

It's this word - competition - which says a lot about the antagonism towards low cost in Mallorca. For a tourist destination built on cost that wasn't just cheap as chips but cheaper, it is now payback time, and this comes in the form - it is hoped - of elevated hotel prices with improved quality attracting a tourism class which is the antithesis of what gave the island its wealth in the first place.

But while hoteliers might attempt to sew things up to their RevPar and bottom-line advantage, there is a whole other economy where the competitive forces of low cost are having field days. Airlines are just one example. There are also coach transfer services, car-hire agencies, shops. The list can go on. Hairdressers are another.

Defending local business and economic interests is valid enough, but it is a defence too often predicated on a demonising of operations which have disrupted one-time uncompetitive markets. Low cost is no pejorative, it has become an imperative.

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