Twisted Knickers: Rentals And Tourist Tax

Knickers in a twist. Are yours? It could only happen in Mallorca. Holiday rentals legislation and tourist tax, that is. Oddly enough, it can appear that it can indeed only happen in Mallorca. Why? The island's success, that's why. It has held the tourist leadership for so long, it has become so ingrained into holidaymaking culture, it has attracted international media attention like no other destination for many a long year. It could only happen in Mallorca.

Are knickers in a twist elsewhere? Regarding rentals and tourist tax? Locally there may well be. Apartment owners (and speculators) have discovered that there are rules and that there are regulations. Talk in bars or in the local press is of concern with taxes. But the outside world knows little of such matters. Elsewhere, as in other tourist destinations, isn't Mallorca. These destinations compute but not to anything like the extent that Mallorca computes. What happens in Mallorca most certainly doesn't stay in Mallorca. It never has done. It fills column inches for the foreign press. Elsewhere doesn't. There isn't the same interest as with Mallorca. The island sells itself and it sells papers. Elsewhere doesn't sell itself and doesn't sell papers.

Here's an interesting little scheme for you. You'll have heard of Croatia. You can't not have heard of Croatia in the past, what, less than a week since the Balearic tourist tax announcement. Everyone's going to Croatia next year. It's just so the new Mallorca. It isn't because, given its lower capacity, not everyone will be able to fit into a hotel. It will be more the new Mallorca because the demand for (and supply of) holiday rentals will therefore shoot up, just like Mallorca's demand and supply have shot up. That's where the little scheme comes in, and it isn't like Mallorca.

Do you know that if you, as a holidaymaker, rent a property that isn't registered with the tourist board in Croatia, you could be liable to a fine of the equivalent of around 400 euros? You didn't know? You now do. Why the fine? Because of the law. Isn't legislation, aren't regulations such a damn nuisance? Don't governments know anything about tourism? Like the Balearic government doesn't know anything. Well, the Balearic government and indeed the Spanish government do not have laws which mean that a holiday rentals' guest in Croatia follows the same rules as hotels. The owner has to register you with the police. Croatia wants to know who's in the country.

The Croatian owner can be hit with a fine for not registering the guest on top of the fine for not having registered the property as a business and for not therefore having gone along with the scheme of classification of properties (akin to the hotel star rating). The fines aren't as huge as they now are in Mallorca, but the principle is exactly the same. Knickers in a twist in Croatia?

There is a tourist tax in Croatia as well. It isn't as high as Mallorca, but there is a tax nevertheless. Just as the Greek islands, everyone's other darlings for next year, will have a tourist tax of up to four euros per room per night. Fancy anywhere else? Malta, for instance? It has something known as the Environmental Contribution. Sounds familiar? Sort of, yes. Again it isn't at the same rate as Mallorca (and of course the rest of the Balearics), but there is still a tax. In Bulgaria the tax might be up to eight euros per person per stay. In French resorts, the old cap of 1.50 euros per night that could be charged went up two years ago. No one ever mentions the French tax, yet it has existed for years, which is the same in Germany. Turkey doesn't have a tourist tax but does have a charge for an entry visa. The cost for a family of four is roughly what it will cost from next year for a family of four (two kids under-16 who are exempt) for a week at a Mallorca five-star hotel.

There is only one other region of Spain where there is a tourist tax - Catalonia. Its tax was introduced in late 2011, and its star-rating system for private accommodation is much the same as Croatia's. In Valencia - Benidorm and all - there are holiday rentals rules that are not dissimilar to those in the Balearics. But not even Benidorm makes its way so determinedly into the media pages. And nor does Portugal, with requirements for inclusion of holiday rental licence registration numbers in website adverts that are identical to those in Mallorca and the Balearics.

You see, it can only happen in Mallorca. All those twisted knickers, that is. Yes, the tourist tax is generally higher than elsewhere (not all cities, though), but other governments might just fancy a little increase and you'll probably never hear about it.

The Giant Pumpkin Of Tourism

"The biggest fruit in the world." This was a headline on the BBC website's home page. The fruit was a pumpkin, a fruit in which I do not for one moment pretend to be an expert but which holds an affection because of the annual pumpkin-growing contest that is judged at Muro's autumn fair. In the US, pumpkins are as much as three or four times the size of anything a Mallorcan grower can aspire to: the giants pumpkins of America dwarf the giants of Muro.

No one would claim that giant pumpkins at a fair in a small rural town are in themselves going to make a difference to Mallorca's tourism, but the BBC's pumpkin article had a very clear touristic element. This wasn't contained in the article itself. It was the banner at the top of the article. "Visit Croatia. Share Croatia," it read. It had been placed on behalf of the Croatian National Tourist Board. These banners can be somewhat hit or miss in respect of where they might appear and so therefore who might see them, but this randomness notwithstanding, the banner spoke volumes. The difference between Croatia's tourism promotion and Mallorca's was stark. Croatia is active in a way that Mallorca most definitely isn't. Were Mallorca active, there might have been some appeal in a banner for the island featuring at the top of the pumpkin article. Not, as I say, because the pumpkin fair would have thousands of tourists beating a path to Muro but because it is indicative of an often batty, alternative Mallorca the regional government would so love the world to know about and yet which it fails so abjectly in informing.

Croatia is arguably the European champion of tourism promotion. It gets web promotion in a way that Mallorca mystifyingly doesn't, or as yet hasn't seen fit to genuinely embrace. The word "share" in the banner says much. Croatia's social-media presence is enormous, while Mallorca's is not; it is a giant pumpkin-sized approach versus a seedling. I have railed often enough against Mallorca's poor social-media activity and so wonder if the baffling lack of presence is indicative of a wider issue.

One senses that Mallorca's tourism is at a crossroads. A strategic desire is for the up-market, but is there truly an acceptance of such an exclusive market to the exclusion of others? Is, therefore, an incoherent approach to web promotion a manifestation of this uncertainty? Technology and marketing are combined in ways they never have been before, yet neither appears to have a clearly defined role. What does Mallorca want from web technology and what does it really want by way of its tourism market?

Neither the government nor the tourism industry can neglect the past. Despite an aloofness (a misguided one) that has been shown by some in Mallorca towards the current-day concept of low cost, it was precisely this - low cost - on which the island's modern-era tourism was based. The term is an invention from the 1990s, but Mallorca grew as a consequence of cheap-as-chips tourism for the masses and spawned some of the resort hideousness that the government would also so love to get to grips with. This was tourism of the giant-pumpkin variety. The larger the pumpkin, the less taste it has. Mallorca reaped what it had sown: a massive fruit comprising 98% water, little substance and little taste. 

This has of course changed over the years, but Mallorca is still faced with the giant-pumpkin conundrum. How does it add vastly more starch and sugar of a quality, up-market style while year after year still planting the seeds for massive-sized  production? How can it, when vertically integrated tour operators have to sell on volume to meet airline, airport and hotel obligations or when far too many hotels (which would need a miracle of investment) will remain for the high percentage of tourists who represent the water content or when too many jobs rely on the island's benevolence in providing a form of tourism social services for visitors whose actual contribution to the economy is otherwise negligible or often negative?

Croatia has grasped the promotional nettle because its government has taken the lead. In Mallorca the government does not lead. It trusts in the private sector to do its thinking and doing. President Bauzá said a year ago that his government had spent nothing on its tourism policy because it was in the hands of the private sector, which is all well and good, but while there is a giant pumpkin to be filled, the private sector of hotels and tour operators will do so in whichever way suits it, the result being, in the absence of clear leadership, strategy and web promotion, a fruit of a different variety - a lemon.

Why Croatia Cannot Compete

In 1984, a group of us went on holiday to what we called Yugoslavia but to what was Croatia, except that no one made much reference to Croatia in 1984, as the Big Brother Socialist Federal Republic of Yugoslavia was still intact. Two years later, the SFR started to finally creak. Serbia's SANU Memorandum was issued and so began the unravelling of the SFR and the descent into war.

We really didn't know a great deal about where we were going, other than the fact that the place was called Umag, which didn't sound particularly delightful. The resort where we stayed had a distinctly Communist feel to it. There was one vast refectory-type restaurant which specialised in nothing in particular, a vast concrete "entertainment" complex with as little appeal and ambience as a 1960s John Poulson-designed English shopping centre, and a beach that wasn't a beach. It was like a car park. Concrete. The only redeeming feature was the accommodation - wooden chalets set amidst pine trees which fortunately had barbecues, meaning that the restaurant could be given a deservedly wide berth.

As Umag demonstrated, Yugoslavia was a tourism destination stuck in something of a time-warp, but though ostensibly Communist, Yugoslavia had long been open to tourism, and Croatia, as one could observe in Umag, was popular with German and Austrian visitors who could travel easily by road. It was the existence of a tourism infrastructure (albeit one in need of updating) and a previous tourism reputation that enabled Croatia to quickly establish itself on the European tourism map once hostilities came to an end.

Croatia as a competitor to Mallorca has long been spoken about, but it has recently been spoken about less. Turkey, Egypt, Tunisia have all assumed higher profiles and interest, even if this interest, where Egypt and Tunisia have been concerned, has been one of reaping the benefits of revolt. But Croatia's competitiveness has not been diminished. Quite the reverse. It also benefited from the Arab spring, and while Turkey and Egypt do tend to dominate much of the tourism discussion in Mallorca, Croatia is arguably the biggest single competitive threat to Mallorca.

The Banca March, in its recent report looking at tourism going forward to 2030, is one organisation which has identified Croatia as the island's main competitor. It isn't difficult to see why this might be. The advantage of easy transport links which existed before the Yugoslav Wars remains a key advantage, which is why German, Austrian and Italian tourism is so strong, while these links enable Croatia to benefit far more now than it did in 1984 from tourists from the one Communist country who were able to move relatively freely, the Hungarians. And Hungary as a market for Mallorca is virtually unknown.

Apart from the transport links, the tourism infrastructure in Croatia has been totally transformed. I have searched to see what remains of Umag in its 1984 style, and I think the car-park beach might still be there, but otherwise, the place looks largely unrecognisable, while I imagine that the town's shops, which in 1984 appeared not to actually have anything to sell, would also be unrecognisable. The growth of Croatian tourism is such that its level of overnight stays quadrupled in fifteen years from 1996, and there is no hint that this growth might level off. Hotel quality keeps getting better, there is scope for more development and prices are generally and for now quite low.

Mallorca makes a virtue of aspects of its tourism, as though these aspects were somehow unique to it, when they aren't. Croatia has folk traditions, it has fiestas, it has mountains, it has wetlands and wildlife, it has rivers (which Mallorca doesn't), it has mediaeval and Roman remains, it has sport (and Umag now boasts the staging of the Croatia Open tennis championship). It doesn't have a great gastronomical tradition (or if it did in 1984, it was keeping quiet about it), but gastronomy, despite what Mallorca's tourism bodies would believe and would have everyone else believe, is not considered to be that important by tourists (and surveys have shown that isn't).

What Mallorca does have and what Croatia doesn't are any number of fantastic beaches. They had to build car-park beaches because of the rocks. There is no beach in Croatia that can compare with, say, Es Trenc or Alcúdia's. Yet, in the face of competition from Croatia and elsewhere, there has been a perversely determined effort to promote anything which isn't beach tourism, so disregarding Mallorca's greatest asset. Sun and beach may be old hat, but it still sells. Indeed, for many tourists, it is all that sells. And where the beaches are concerned, Croatia can't compete.


Any comments to andrew@thealcudiaguide.com please.