Everything Depends

And ever more on the theme of the month ... Mallorca expensive or not. One of our own, as it were, Glen, acquired stardom yesterday by having a letter to "The Bulletin" published in pride of place on page 2. Clearly, it was a bit of a thin news day, as there were several more letters on prices etc. on another page. Another 3 euro coffee, someone bemoaning the cost of a sandwich and a menu that was only in Spanish and German (that should be added to the list of yesterday), and another who has got a bee in his bonnet about alleged cartels operating in the car-hire business and on golf courses. Ho hum. And then the other side of the coin; examples of where one can eat out reasonably. As for that further 3 euro a coffee, it refers to a beach café in Porto Colom - four years ago. QED, Mallorca has long been overcharging. Maybe. Some friends went to Porto Colom, it would be three years ago now, and were distinctly miffed at what they had to pay for a meal at a particular restaurant. So maybe one could draw a conclusion about Porto Colom being particularly expensive, which, I imagine, would be completely erroneous. But some might do just that. One pricey meal, one pricey coffee, and Bob's your wide-boy, ripping-off uncle - Porto Colom is overpriced and over there - on the east side of the island.

Mallorca is not cheap, let's just nail the canard once and for all that it is. Last year Thomas Cook provided a survey of ten holiday destinations. This found that Mallorca was the third most expensive, only Florida and, surprisingly, Croatia being more so. Less expensive were, for example, Turkey and Bulgaria, with Goa the cheapest of the lot. The calculation in that survey was that Mallorca was cheaper than the UK by a factor of nearly fifteen pounds (daily spend) (22 June 2008: One On One). It all depends what you use as your measures of course. On 30 July I offered a number of items that made up a daily spend some way short of Thomas Cook's and which included significantly greater amounts of the boys' bevvy as well.

Depends. Depends. That should be the word of this debate. For every tale of expensiveness, there is another of cheapness. Back and forth we go. But it is the use of these single examples, these cups of coffee, these bottles of suntan lotion, these boxes of paracetamol, which is so galling. Galling because they prove precisely nothing. And the expectation that Mallorca should be cheap is something else that is galling. Have those who complain ever stopped and taken a look at prices of property in Mallorca? All that expensive, yes expensive, real estate, and they expect a coffee or a beer to cost a handful of centimos. Get real. That said, it still comes down to "depends" - where you go, what you buy, blah, blah.

Might the authorities, as suggested a couple of days ago, be minded to "do something"? You know what, I don't think they would be. And why not? Because they want so-called quality tourism. And that means tourists of money. And that does not mean pints for a euro, even if these were attainable, which they are not, or not sustainably attainable at any rate. Yet the authorities are misguided. The fact that hotel occupancies might be "catastrophic" this season are not as a result of prices, they are the result of a fall in the bread-and-butter regular mass tourism, that upon which the island is built. The authorities should take note of complaints of high prices, but only in the sense of analysing why they might be high. And they still wouldn't do anything, because they are bound by the rules of engagement that are market forces, economic circumstances, and the European Union. Want cheap? Ok, go to Bulgaria, but its prices will catch up.

Everything depends. Mallorca may not be cheap, but it doesn't have to be expensive, only if you want to make it so. In the UK, and in Holland, people have been telling me that everything seems so much more expensive now. And there is some truth in that, despite low inflation. But that also depends. Depends what you are referring to. I come back again to the assistant director at Bellevue. He reckons that there is a lot more budgeting occurring now. It wasn't always the case. People would go out to bars and the like and spend money and not really know what they were spending. This has changed, and has been highlighted by the crisis. People are far more aware, and it is this awareness, as much as anything else, which leads to the "expensive" claim. I am repeating myself I know, but I am convinced that in many instances prices have not gone up significantly, if at all, just that people seem to believe so because previously they hadn't taken much notice. But there again, maybe it all depends.


QUIZ
Yesterday's title - John Lennon, http://www.dailymotion.com/video/x10ln3_john-lennon-nobody-told-me_music. Today's title - line from what was the first single by? There was a cover by one without shoes.

(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)

Nobody Told Us

August is of course the month when the hotels can pretty much all expect to be full. It is 100% month. Not this year. "Catastrophic," is the word, the prediction being that there will be a decline of 10%. And then there is September. Up to 20% down at present. There are likely to be hotels closing in September. From a report in "The Diario", the president of JS Hotels - that runs, for instance, the Sol Alcúdia Hotel - says that September closure is a prospect. JS also has four hotels in Can Picafort, one in Playa de Muro and a nice new office building at the Eroski roundabout in Can Pic - that might not have been the greatest bit of timing. The report does actually refer specifically to Alcúdia, so the Sol, given that it is the only JS hotel in Alcúdia, would presumably be the one that is being alluded to.


I am grateful to Ben for sending a selection of tourist complaints received by ABTA and Thomas Cook. They are truly priceless, and so here are some of them (I'm assuming they are for real; even if not, they are unfortunately extremely plausible):

"It's lazy of the local shopkeepers to close in the afternoons. I often needed to buy things during 'siesta' time - siesta should be banned."
"We booked an excursion to a water park but no-one told us we had to bring our swimming costumes and towels."
"We bought 'Ray-Ban' sunglasses for five euros from a street trader, only to find out they were fake."
"No-one told us there would be fish in the sea. The children were startled."
"I compared the size of our one-bedroom apartment to our friends' three-bedroom apartment and ours was significantly smaller."
"I was bitten by a mosquito - no-one said they could bite."
"I think it should be explained in the brochure that the local store does not sell proper biscuits like custard creams or ginger nuts."
"There are too many Spanish people. The receptionist speaks Spanish. The food is Spanish. Too many foreigners."

And as a footnote to the prices and everything expensive carry-on, thanks to Sheila for pointing out that "the sun is free and so is the general friendliness and laidback way of life in Spain. As for money, well you cut your cloth ... as the old saying goes". Amen to that.

QUIZ
Yesterday's title - Roxette, "Sleeping In My Car", http://www.youtube.com/watch?v=MDjdMxHHmF4. Today's title - well, the song was "me" and not "us", but who was it?

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The Back Seat Of My Car

We are in a period not of price inflation but of outrage inflation. It continues. It was the cost of car hire (again) yesterday. At least someone had the good sense to right the gross coffee distortion by penning a note to "The Bulletin". But elsewhere we were told that the "alleged" shortage of cars to hire and their inflated prices is a situation the industry has created. Well yes, that's true but only in the sense that lack of access to finance has been the primary cause of fleet reductions. If people want to beat up on anyone, then let it be the banks. I say once more, however, this is a situation that has been known about for months; it should come as no surprise. Moreover, it is not a situation unique to Mallorca nor indeed Spain. Similar gripes are to be heard from tourist armies in the likes of Tuscany, wishing to motor around the green lands of northern Italy in a formerly less expensive Alfa Romeo cabriolet.

The regular calls for "government" or "authorities" to "do something" are laughable if they come from those who, under different circumstances, are only too happy to be the beneficiaries of a market relatively free and unhindered by central intervention. Perhaps they might wish to call on governments to prevent the making of profits on the sale of property (not great at the moment admittedly, but that, strange to report, is because of the workings of the market). There is a sense of having cake and eating it as well about all this. Or anywhere but the back seat of my hire car.

One writer called on the paper to pass on letters to the "authorities". Were it to, the "authorities" would no doubt say gravely that they will look at the matter, pose for a photo and do precisely nothing. Or, they will have a word, to which the reply will be - you lower our rents and our taxes and then we'll talk about prices.

The government could, one supposes, "do something" were it minded to. The tourism industry in Mallorca is a strategic industry. One element of that industry, the hotels, is to benefit from low or zero finance, courtesy of the Balearic Government, in order to undertake certain redevelopments. This, so the theory goes, will help to kick-start the other strategic industry - construction - while bringing about upgrades in hotel stock that are deemed necessary in the face of competition from other destinations. But the hotel sector is fundamental. I'm not sure the same can be said about hire cars or indeed bars and restaurants. The government would only "do something" if it somehow had hold of the purse strings. The hotels have been told they can create spas and the like within existing complexes but they can't actually build out - these are the terms on which that finance is available. Were there to be a central fund for other sectors that serve the tourism industry to avail themselves of, then the government would be able to "do something", such as, perhaps, impose certain constraints on prices charged. But why would they? To do so would require an accord with the banks, who would otherwise see a source of their business taken away, even if they might be currently disinclined to lend finance. And you would end up with a quasi-nationalised bank to fund aspects of the tourism industry, with strings attached. It wouldn't happen. Even were such a system of finance to be created, it would have to be applied across the board. The car-hire sector is not a special case.

Yes, there are examples of higher prices this year, but there are also examples of small companies benefiting. They are taking up the slack from the larger agencies unable to meet demand for cars. They may well be charging higher prices, but they are also being given a shot in the arm.

One should not underplay the potentially bad PR that high prices create, but one needs to be aware of the short-term circumstances that have brought about these prices; circumstances not of the car-hire agencies' making. These are circumstances being repeated in other countries as well. Were the current charges being quoted by some agencies to persist, once normal circumstances are re-applied, then there would be cause not just for concern but also for genuine accusations of profiteering. But these are unlikely to arise. There are also suggestions as to the operation of some sort of cartel. I would like to know what evidence there is for these allegations. Despite what some might argue, rules of competition do actually apply in Mallorca, both in the legal and the market sense of the words.

And those rules of competition bring one back to what goes on in the bars and restaurants. It is they, above all else, that go to shape prices and products. If a café does indeed charge 3.50 euros for a coffee, well that is its affair. If the one next door is charging the normal 1.50, then the 3.50 café may not be in business that long, but it depends what sort of a place it is. One of my email correspondents, Lynne, points out that bars etc. are supposed to display their officially stamped price list. The point being that you can check the price before ordering. Don't like the price, go somewhere else. But maybe that 3.50 café has an ambience or style that you do like. More expensive, but you pay a different price for different products. That's the market for you.

Wrapped up in all these complaints about prices is an unrealistic notion that somehow bars and the rest have an obligation, a responsibility to the resorts and the island as tourist destinations. They do not. Their responsibility is to themselves. And it is their responsibility to price and to provide product that the market demands and that has an edge over the competition. Let me tell you about external responsibility, or how it was summed up by the assistant director of Bellevue. There is none, except for the environment. In Bellevue's case, they do what they do - his words. And so it is for any business, be it bar, restaurant, or whatever.

Glen, another correspondent, in the context of the gripes about bar prices, wonders whether the only reasons that some people go on holiday are to eat and drink. It's a fair point, and the impression some of these letters gives is that these are the reasons. Oh, and hiring a car as well. Someone else made the point to me the other day that the Brits seem to believe that wherever they go on holiday it should always be cheaper than at home. The car-hire issue is one thing, but as for the rest ... you make it as cheap or as expensive as you want, but please spare us these spurious conclusions based on specific and arguably isolated examples. And I maintain that the crisis and the exchange rate have heightened awareness as to actual spend, causing a perception of higher prices even where these do not exist. To repeat from yesterday - just give it a rest, please.


QUIZ
Yesterday's title - Steve Miller Band, "Midnight Tango", http://www.youtube.com/watch?v=H3VT-NpsjyY. Today's title - line from a car song. Swedish.

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