The First Industrial Estate In Spain

For those of us who don't work on it or have cause to enter it, the Son Castelló industrial estate in Palma is likely to only come into the consciousness because of the queues of traffic that build up along the motorway if you happen to time your journey wrong. But there is way more to Son Castelló than any old industrial estate.

Once called Son Perera, Son Castelló has a long history. A certain Joan Castelló acquired the finca in 1578. He was from a family of tanners: industrialists of yore. Ownership of the estate was handed down to family members over the centuries until, in 1952, it became the possession of family relatives, the Roses Montis brothers. In 1955 they set about selling off the estate, and ten years later 84 "quarterades", valued at 53 million pesetas, were bought by the Associació Sindical d'Indústries de Mallorca, otherwise known as ASIMA, an organisation that had been established for the purpose of promoting industrial enterprises. On 3 November 1967 the polígono industrial was opened. It was the first privately owned industrial estate anywhere in Spain, and its first president was one of its founders, Ramón Esteban Fabra, whose name is intimately linked to Son Castelló and to ASIMA, which this year has been celebrating its fiftieth anniversary.

To mark its fifty years, a book was published in the spring which, replete with photos, anecdotes and factual information, charted its background, and it is a story that is one of the most remarkable in the history of Mallorcan business, because what ASIMA did was to break the mould of how Spanish business operated.

Fabra and his contemporaries were considered to be crazy and idealists. In 1964, despite the free-market liberalism that the technocrats of Opus Dei had presented to Franco as an alternative to the disastrous insularity of autarky, business was still dominated by the concept of organising workers and employers within vertical structures. While this system had been conceived as a means of supposedly keeping unionism and worker discontent at bay, it was one which favoured large businesses and created an environment that did not incentivise new business. ASIMA rejected the system. It not only developed Spain's first industrial estate, it also became the first genuine business association in Spain, and its idealism was founded on precisely those things that the vertical structure inhibited: enterprise, initiative, innovation, entrepreneurship.

ASIMA was to go on to involve itself in other projects. In a way it borrowed from the Victorian ideas of British companies like Lever and Cadbury in that it created social housing for workers and donated land for the building of a secondary school. But it also created the first proper training school in Spain and the first system of what nowadays might be referred to as "incubators" for entrepreneurial ideas and innovation. And overseeing these developments was the visionary, Ramón Esteban Fabra.

The tale is told of how Fabra went to Madrid to present his ideas. He was greeted with suspicion. Having a space for all sorts of trades and professions, having an association for them, giving them the room to grow and develop just wasn't how things were done. The greatest obstacle he faced wasn't so much the government but the Falange. It had been the driving force behind the vertical structure and adhered strictly to the notion of the supreme unity of Spain. Fabra appeared to be proposing something which went against this. In the end, he was able to convince the sceptics in Madrid that laws on labour and on "Spanishness" were not going to be broken. There was agreement but there was Francoist insistence that the industrial estate be called La Victoria; Son Castelló would have been too "un-Spanish". It was only when the regime ended that the original historical name Son Castelló was adopted.

I have argued previously that far from being insular and parochial, Mallorcans, in terms of business at any rate, have long been outward-looking and entrepreneurial. They have had to be because of geography. Tourism brought with it businesses that are now global brands, like Meliá, but the story of Son Castelló shows that the business instinct was wider than tourism. Indeed, the very fact that it was founded at the same time as tourism boomed demonstrates that there were those who appreciated that tourism could do only so much for the economy: businesspeople and not politicians.

There is a twist in this story. A mystery. In February 1983 Fabra went missing. His body was found in the sea off Magalluf. There was no sign of violence. He was clothed except for his trousers. He had drowned, but there was, from what I can make out, no good explanation why. He was 55 years old. ASIMA wanted Son Castelló to be renamed after him. Officially it is. But everyone knows it as Son Castelló.

Photo: Ramón Esteban Fabra, found from an article which would appear to have been published in "Ultima Hora" on 26 February, 1983.

Who Shouts The Loudest: Balearics tourism industry

In October there was a significant development in the way that tourist businesses are organised. Different associations representing the non-hotel sector finally agreed to create a single body. These associations include those for restaurants, nightclubs, attractions, travel agencies, car rental and others.

The reasoning behind one body was obvious. It was to create a single voice to deal with the Balearic Government that could act as a counterbalance to the very strong and dominant single voice of the hoteliers. Though it has been said that the forming of this body was prompted by concerns about the increase in IVA by the national government, there were matters of local concern that were just as important. Many of them stemmed from the tourism law of 2012 and from the way in which the tourism market functions. All-inclusives, holiday rentals, hotels' secondary activities; these are just some of the issues which unite the non-hotel, complementary sector.

There not having been one body until now is a mystery. When one part of the tourism industry dominates as it does in the Balearics and has the ear of the government as closely as it does, then surely there should have been an alternative voice for the rest of the industry for years. One can attribute the absence of such a body to different reasons but perhaps the main one is that, because there are that many associations, finding common purpose among them all has been nigh on impossible.

The penny should have dropped a long time ago, though. The hoteliers have been in the ascendant for as long as there has been mass tourism. Obviously they have. Without them, there would have been no mass tourism and so wouldn't have been all the complementary elements. The hoteliers get a bad press, but it shouldn't be forgotten who it was who created mass tourism; it wasn't attractions or even restaurants.

This, though, interprets tourism in an imbalanced way. Something had to come first to get Mallorca to where it is, and the hotels were this something, but the complementary sector was equally as important. The tourism industry comprises many parts, all feeding off each other, complementing each other. But the very term complementary offer implies a secondary function; it complements the hotel sector. Without the hotels, there would be nothing to complement.

Nevertheless, for years this complementary status functioned well enough. Hotels did what hotels did. Restaurants and bars did what they did. But then, and one can place the point in time to be in the early to mid-1990s, the relationship began to change. Some twenty years on, the complementary sector only has itself to blame for what it did precious little to challenge: the arrival of the all-inclusive.

Complacency was undoubtedly a factor. All-inclusive was still only small scale. It would probably go away. It didn't. Organisation was another, and only now has it really come home to the complementary sector that its own organisation was flawed. There was the Balearics Confederation of Business Associations (CAEB) to represent it. But it also represented the hoteliers. Twenty years since becoming president of CAEB, Josep Oliver has stepped down. Business associations are reluctant to even nominate a successor. They have serious issues with CAEB because it has seemed pro-hotelier. They consider it to be useless.

If it is, then these business associations have surely allowed it to be. It is staggering that it has taken them so long to grasp the nettle and to attempt to place their interests at the top of the tourism industry agenda and not those of the hoteliers. It is staggering just how weak the pronouncements from some of these associations now sound. They can speak about the impact of all-inclusives as though these have only just been recognised. This impact may have been less obvious in the 1990s but by the turn of the century it had become obvious. Why weren't they raising merry hell about holiday rentals when the tourism law of 1999 was passed and not waiting until this year, and the reform of the national law on lettings, to begin to object strongly? The situation is fundamentally no different to what it was at the end of the last millennium.

Better late than never, one supposes, but what will this unified body achieve? One of the myriad associations on the island is Acotur, that which represents tourist businesses. In its most recent magazine it attacks the government for being too much on the side of the hoteliers and for reneging on an electoral promise to help the non-hotel sector. But then Acotur is just one voice among many. A unified body may achieve what it, Acotur, has wanted, but it will only do so if the government is confronted with a body with an assertive agenda. One recalls how the government buckled when the large retailers took it on over the green taxes. If business shouts loud enough, then the government will listen. Until now, though, it has been the hoteliers who have been doing the shouting. And with one voice.

Being For The Benefit Of The Hoteliers

So, CAEB, the Balearics Business Confederation, has announced that this year's bumper tourism season has only benefited the hoteliers. Talk about making a statement of the bleeding obvious. I have a question for CAEB. Why has it not previously been making a song and dance about the imbalances that exist within the island's tourism industry?

One reason may be because of the diverse range of business interests that CAEB represents. Go back to May of last year, as an example, and CAEB was in a state of internal strife, some associations within it backing the regional government's tourism law and others not.

This lack of unity says much for how tourism operates in Mallorca. There are competing groups with competing self-interests which find it hard to create a coherent and single voice to challenge the business voice which is heard with clarity and one purpose - that of the hoteliers. The tourism law, criticised for having been a law for the hoteliers, was exposed to all too little opposition because of the fragmented nature of what opposition there was.

It is only now that this fragmentation is beginning to coalesce into something like a powerful alternative voice. The association which represents attractions was another which had been largely disregarded until the director of Palma Aquarium assumed its leadership and began to push for a far more co-ordinated approach by businesses from the non-hotel complementary sector. CAEB's announcement, one made in fact by the head of its restaurant association, can be seen as further evidence of dissatisfaction belatedly being expressed by this sector. Other groups which have been saying similar things include the Chamber of Commerce and the islands' major retailers.

A current preoccupation with seasonality and the lack of winter tourism produces debate which is a diversion. Regardless of whatever solutions might or more likely would not be arrived at, would similar dynamics to those of the summer not be at play? Open up more hotels and what type of accommodation might be offered? Bring in more tourists off-season and what sort of spend will they have? Why would trends towards more all-inclusive packages and towards lower spend be any less relevant were there more winter tourism?

The winter tourism debate is a diversion away from the underlying weaknesses of summer tourism. There is no weakness in terms of numbers of tourists, and there is unlikely to ever be such a weakness, but the numbers obscure the real issues, something to which CAEB has now alluded when it questions tourism spending statistics. Why question them now? Why has a professional body for so long apparently failed to appreciate that these statistics are compiled for a particular purpose - in order to satisfy a Bank of Spain requirement for balance of payments measures - that does not correspond with the real tourism economy?

It has also taken an inordinately long time for professional, non-hotel bodies to wise up to the contribution that non-hotel tourism accommodation makes to the Mallorcan economy. The Chamber of Commerce produced very revealing research about the levels of such accommodation way back in 2006, but why does it seem that it took the change in the national tenancy law this summer to shake business associations into beginning to voice strong opposition to the government's pro-hotel stance?

For the good of Mallorca's tourism industry, one would hope that there might be a unified voice which expresses the needs of all the industry's sectors, but there seems little chance of such a hope being fulfilled. The tourism ministry, as with the government as a whole, doesn't do dialogue. Witness what happened when Carlos Delgado said he was looking for consensus with regard to holiday rentals in August. He got it, but from whom? Not the business associations but from town halls and island administrations beaten into submission.

The ministry cannot be totally blamed for there not being a unified voice and a unified view of Mallorca's tourism. In the lead-up to the passing of the tourism law, there was a truce between the hoteliers and the complementary sector, the latter hopeful of gaining from the law by presenting a solid front. It was a naïve hope, and the hoteliers and the complementary sector have been at each other's throats ever since, the complementary sector pausing only to try and wring the ministry's neck.

The sadness in all this is that these three agencies - government, hoteliers and complementary sector - should be sitting together in order to come to an understanding of and to create a vision of Mallorca's tourism over the next couple of decades. The tourism market is constantly evolving and developments can be expected to be more rapid, but where is the unity of purpose to facilitate an appreciation of and response to these developments? There isn't one.

Fourteen Years Of Silence: Holiday rentals

In February 2011 a news story that did the rounds dealt with a visit paid by inspectors from the Balearics tourism ministry to an apartment in Santa Ponsa. It was occupied by Russian tourists who had booked the apartment via a British website and had paid 4,500 euros for a fully equipped flat with various services including the use of a private pool. The inspectors went to a different apartment, one that had been advertised on the internet as a "luxurious" property, and there a British couple was renting it for 820 euros. Then they went to another apartment, this time in Illetes, where a family of five was paying 6,000 euros for two weeks rental. The inspectors didn't bother going to a house in Santa Ponsa about which German tourists had posted a review on the internet. The tourists' experience of the house couldn't have been better. They spoke about it as though it were a hotel and gave it a glowing recommendation.

The first of these inspections was the one that really drew the attention. The owners were liable to a fine of 30,000 euros. The apartment, as with the other properties, was being offered for rent illegally.

It is important to look at the date. February 2011. Almost a year and a half before the new tourism law in the Balearics was passed. It is also important to bear in mind what was explained at the time. The infractions that the inspectors had discovered, all of them in fact during 2010, contravened Article 72.3 of the general tourism law. The previous law. This stated that "the publicising, contracting or commercialisation of establishments, activities or businesses which do not have the required tourist authorisations" will be considered serious infringements of the law.

The 2012 tourism law merely reinforced what already existed in Balearics legislation. There are plenty of people who will know that this was the case, but to gauge the reactions in the wake of the reform of the national tenancy act, you might think that penalising owners of private accommodation was somehow new. It most certainly is not.

This reform strengthens the hand of the regional government but it doesn't fundamentally alter a situation that has obtained for years. But only now, or so it seems, are strong voices of opposition to the government's stance being raised by bodies other than owners themselves.

Much as I applaud the Chamber of Commerce having weighed in to the debate, I have a question: where has it been all these years? And the same question applies to the restaurant sections of the business association CAEB and of the small to medium-sized businesses organisation PIMEM. It also applies to the Balearics wing of the PSOE socialist party. Where have any of them been and why have they not raised stronger objections in the past?

And the past is worth taking into account. When was Article 72.3 set in legislative stone? The answer is 1999. The law was passed a couple of months before the elections that year; elections that saw PSOE form its first ever government in the Balearics. So, let's ask another question. Why did PSOE, if it is now against the stance on private accommodation, not seek a reform of this part of the tourism law during either its 1999-2003 or 2007-2011 administrations? Take note: the actions of the tourism inspectors were in 2010, when PSOE was in power.

There's a further question. 26 September 2006 was a not unimportant date in the history of Mallorca's rental accommodation. It was the deadline by which properties had to be registered as either tourist or residential lets. There was a category of accommodation which couldn't be registered as tourist lets. Private apartments. Why did PSOE not raise an almighty fuss about this at the time?

Political opportunism probably explains why PSOE has now jumped on the bandwagon in opposing the government's position, but this doesn't explain why business associations have seemingly been so mute in the past. 

Better late than never, but business, other than the highly organised hotels, has failed until relatively recently to show its muscle in anything like a co-ordinated and assertive fashion. Where holiday rentals are concerned, the penny has finally dropped and made a loud clanging noise of the damage that can be caused to businesses that form the non-hotel complementary offer. Previous silence can probably be attributed to indifference, complacency or lack of organisation. The noise now can be attributed to an awful realisation that members' interests could be harmed. It's a welcome noise, but why has it taken so long for it to be made?


Any comments to andrew@thealcudiaguide.com please.

We Told You So: Lack of bank credit

On every bright horizon lurks a dark cloud or two. The optimism for the coming season is not, it would appear, being matched by a sector of the economy every bit as important to tourism, if not more, as hotels, bars and restaurants - the banks. Their purse strings remain pulled tight, so complain business associations. Without their injections of credit, bars find it difficult, if not impossible, to undertake the type of work that is typical of this time of the year - some improvements, some decoration, the purchasing of stock or new equipment. The lack of credit is reflected along the chain. Suppliers have pulled back in extending particularly generous terms, often for the same reason as their customers are experiencing difficulties - their own access to credit.

As the world's tourists all descend from the skies onto Mallorca this summer, so the sight of a bar without a lick of fresh paint or some chairs minus wicker where wicker used to be will be the inspiration for complaints that standards have slipped. You can already detect the sound of indignant keys being stroked.

If not bars and a chipped tea-cup, then the annual whipping-boys of the car-rental world. To three years of crisis, hire cars are now subject to the effects of natural disaster; the earthquake and tsunami in Japan mean limited supply. On top of this, car sales fell in March anyway; by some 48% in the Balearics, though only a modest percentage of this was attributable to rental agencies not renewing their fleets.

Despite an understandable complaint that the banks might be more forthcoming and be more willing to join in with a general air of pre-season jollity, and also despite whatever impact a distant disaster might have on the price of a week's car hire, is there perhaps a sense in which retaliations are being got in early? Don't blame us, blame the banks, and the banks are as much a factor for the car-hire agencies as they are for bars or restaurants. A shortage of credit over the past couple of years has had an effect.

The apologists of the bar and car-hire trades are sharpening their keyboards as fast as the disgusteds of wherever press the send button on their emails or internet forums. The apologists are pressing their press releases. It's not our fault if bars are in a bad state. Just blame the banks; oh, and the government while you're at it for the smoking ban. Oh, and throw in the hotels and all-inclusives as well. On and on it goes. As ever.

It is something of a new excuse for the apologists that they can turn to the forces of nature. This year Japan. Last year Iceland. And one turns a wary eye skywards, as the anniversary of Ash-Cloud Wednesday looms. In fact, the volcano hasn't been forgotten. It is still being trotted out as a reason for certain inactivity this year, on account of last year having been affected, albeit for a short period and before the season really got going, and having meant a poor year.

The excuses never cease. You can understand them. Up to a point. There is a legitimate beef when it comes to the banks, but were things so difficult then why are businesses preparing and readying themselves for the season? Cash is coming from somewhere, even if the Scrooge-like tendencies of banks and suppliers suggest that cash has ceased to flow.

The truth is that you never really know for sure. There may well indeed be bars that are facing an impossible situation because of a lack of liquidity, but the tendency towards a manipulation of the press, by the very obvious mechanism of the press release or conference, can rarely be taken as the whole truth and nothing but the truth. If it is indeed the case that the effects of smoking ban have been so deleterious, then should not there now be whole towns with barely a bar still open?

This is not to make light of difficulties and obstacles which are placed in front of bars and other businesses, car-hire agencies included. There are difficulties, but the propensity on behalf of various business associations to flood the media with bad-luck stories and the headline-grabber, e.g. 70% loss of revenue owing to the smoking ban or whatever, should make you stop and question them for a moment.

It was informative, the other day, that a director of a well-known business on the island said to me that his company was good at working the press. But this is how it is. Good companies, good business associations do just this. And in the case of the associations for the bars, the intention is either to shame the banks or to simply get the excuses in. So if things don't work out according to the optimistic tourism figures, they can at least tell us that they told us so, even if the fact that things don't work out has nothing to do with the excuse given.


Any comments to andrew@thealcudiaguide.com please.