Pilar Carbonell is the director-general of Balearic tourism. She's the one who gets things done rather than talk about getting things done, which is minister Barceló's job. But she did talk recently. In a wide-ranging interview, she spoke about the tourist tax, all-inclusives, holiday lets, Aena and lower tariffs at the airport in winter. Hers is a wide brief.
I met her recently when she came to Alcudia to talk to local businesses who were wanting something done about all-inclusives. She seemed eminently charming. Highly attentive and respectful to what was being said at the meeting, there was nevertheless an impression that she was somewhat divorced from the day-to-day realities of life in the resorts. In a way this was surprising. She is steeped in the industry from the point of view of non-hotel businesses, having run restaurants and having been the president of the restaurants' association. In Alcudia, she seemed not to know of the sheer scale of the massive Bellevue complex and the enormous influence this has on the local tourism economy. She seemed surprised when told of the practice of wristbands being sold on the beach to tourists who can get day rates to drink as much as they want inside an all-inclusive.
Perhaps it's too much to ask that any politician with a tourism brief can be familiar with issues in each and every resort on the island, but if so, one wonders about what she said in this recent interview about the application of rules regarding holiday lets.
The law on this, or at least a process for deciding the regulation of accommodation, will be coming in some time in January, she intimated. And as part of this regulation, properties (apartments for the most part, therefore) will be subject to regulated and legal commercialisation as holiday accommodation in defined areas of resorts. The town halls, she said, would be the ones to decide on which areas.
This breaking down by area has already been given some discussion in Palma. But Palma is a big place. It has discernible areas, be they the old centre, the resort areas and other seaside parts which are less of a resort nature. Other resorts aren't anything like as big, and there is a clue in how they are referred to. They are resorts, full stop. Puerto Alcudia is, and this covers the port area and the main tourism centre a couple of kilometres away and stretches to the border with another resort - Playa de Muro: one continuous resort. There are various other such examples in Majorca.
Will this selection by town halls mean, for instance, that the "pueblos" are excluded? And if so, why? In Alcudia old town's case, as is the same with certain other old towns, it is part of the overall tourist offer in the municipality. Why should it not be included?
A concern may be that town halls end up being guided by the current land regulation known as POOT, which basically refers to a quota system of municipal territory dedicated to touristic development. But POOT doesn't presuppose a continuity of territory: it is broken up into parts. Hopefully, this will not be adopted as the guideline, but even under an alternative system, will the plan for town halls to decide not simply add to the confusion which exists regarding private accommodation for holiday let rather than lessen it? And what of municipalities not currently considered to be tourist centres, those in the interior? There is no current tourist development quota in most of them, while if they have ambitions to develop tourism - Sa Pobla is a case in point - they need flexibility where private properties are concerned because of an absence of hotels. Pilar Carbonell has her work cut out getting all this right.
Showing posts with label Holiday lets. Show all posts
Showing posts with label Holiday lets. Show all posts
Saturday, November 28, 2015
Monday, September 21, 2015
Biel Day And Tourism Apocalypse
It was one of those intense "debates", the sort where there are invited speakers who do a great deal of speaking and not a lot of actual debating, and the theme was our dear old friend, the holiday let. They've not invited me back. Not since, as a debater, I debated - vocally and in public - which planet the representative from the tourism ministry and indeed the then tourism minister, Jaime Martínez, were on. Never mind, there's another minister now, of whom the same question can be asked. More of him below.
Anyway, the debaters included Javier Blas, a lawyer whose Mastermind subject is holiday lets. He knows everything there is to know on the subject, which is a great deal more, therefore, than most inhabitants of the ministry. To cut to the chase, Javier believes laws on lets - the Balearic tourism law and the national Ley de Arrendamientos Urbanos (conveniently referred to in English, for all those English speakers who can't pronounce the law, as the tenancy act) - are both less than adequate, a point on which, one fancies, there is general agreement, except among those who drew up either of the laws: Jaime Martínez, for example.
It was a debate that was useful in reminding us all that nothing has been done by the current Balearic government to alter this unsatisfactory state of affairs. With the mad rush - one that seems to be getting more insanely rapid - to introduce the tourist tax, Jaime's successor, Biel Barceló, appears to have completely forgotten that he said the holiday lets thing would come before the tourist tax thing. Needs must, one supposes. As the Balearics are theoretically bankrupt, the government has to lay its hands on the first thing it can that happens to be lying around untaxed - tourists sprawled on a beach, in this instance.
It was of course all too good to last. We'd heard nothing from Biel on the tax for at least, erm, a week, and then he went and spoilt it all by upsetting everyone by apparently implying that from the start of next summer's season, a family of four on a fortnight's holiday will be handing over in the region of 100 euros. Or maybe it will be less. And maybe it'll be paid when checking in at a hotel. Or maybe not. Or maybe it won't be introduced next year. Or maybe it will. And maybe it'll be spent on tourist infrastructure. Or maybe it won't be. Don't worry though, Biel clearly knows. Just like the ministry sorts know all about laws on holiday lets.
The urgency to introduce adequate legislation to deal with private holiday accommodation has been made all the more urgent by what we must call the collaborative economy, a euphemism, where some are concerned, for renting out accommodation without the slightest intention of paying tax on it. While Biel seems to be neglecting the subject, someone who isn't, of all people, is the Pope.
On Portuguese radio the other day, Pope Francis said that religious congregations which have the odd empty convent or whatever knocking around can't simply turn it into a hotel or hostel and expect not to pay tax on income it generates. The "business" would not be "clean", he suggested, in letting monks know that they can't shove the takings into their back pockets. (Do monks have pockets? Perhaps not.) The Pope, clearly in tune with the new age of the collaborative economy, must be concerned that the odd convent might turn up on Airbnb.
As the collaborative economy seems so determined to take over tourism accommodation, be it convent or other, perhaps next Sunday should be renamed. Rather than World Tourism Day, it should be World Collaborative Economy Day, though in the Balearics it might be more appropriate to name it Biel Day. And as Cala Millor is where they celebrate world tourism more than anywhere else (the resort's tourist fiestas week starts tomorrow), Biel should get himself along. Meet and greet the tourists. Oh, by the way, have I told you that next year you'll be forking out a couple of euros a night for yourself, your good lady wife and the kids? Yep, Biel Day it should be. Tourism apocalypse beckons. There'll be no more tourism fiesta days. Party's over.
Anyway, the debaters included Javier Blas, a lawyer whose Mastermind subject is holiday lets. He knows everything there is to know on the subject, which is a great deal more, therefore, than most inhabitants of the ministry. To cut to the chase, Javier believes laws on lets - the Balearic tourism law and the national Ley de Arrendamientos Urbanos (conveniently referred to in English, for all those English speakers who can't pronounce the law, as the tenancy act) - are both less than adequate, a point on which, one fancies, there is general agreement, except among those who drew up either of the laws: Jaime Martínez, for example.
It was a debate that was useful in reminding us all that nothing has been done by the current Balearic government to alter this unsatisfactory state of affairs. With the mad rush - one that seems to be getting more insanely rapid - to introduce the tourist tax, Jaime's successor, Biel Barceló, appears to have completely forgotten that he said the holiday lets thing would come before the tourist tax thing. Needs must, one supposes. As the Balearics are theoretically bankrupt, the government has to lay its hands on the first thing it can that happens to be lying around untaxed - tourists sprawled on a beach, in this instance.
It was of course all too good to last. We'd heard nothing from Biel on the tax for at least, erm, a week, and then he went and spoilt it all by upsetting everyone by apparently implying that from the start of next summer's season, a family of four on a fortnight's holiday will be handing over in the region of 100 euros. Or maybe it will be less. And maybe it'll be paid when checking in at a hotel. Or maybe not. Or maybe it won't be introduced next year. Or maybe it will. And maybe it'll be spent on tourist infrastructure. Or maybe it won't be. Don't worry though, Biel clearly knows. Just like the ministry sorts know all about laws on holiday lets.
The urgency to introduce adequate legislation to deal with private holiday accommodation has been made all the more urgent by what we must call the collaborative economy, a euphemism, where some are concerned, for renting out accommodation without the slightest intention of paying tax on it. While Biel seems to be neglecting the subject, someone who isn't, of all people, is the Pope.
On Portuguese radio the other day, Pope Francis said that religious congregations which have the odd empty convent or whatever knocking around can't simply turn it into a hotel or hostel and expect not to pay tax on income it generates. The "business" would not be "clean", he suggested, in letting monks know that they can't shove the takings into their back pockets. (Do monks have pockets? Perhaps not.) The Pope, clearly in tune with the new age of the collaborative economy, must be concerned that the odd convent might turn up on Airbnb.
As the collaborative economy seems so determined to take over tourism accommodation, be it convent or other, perhaps next Sunday should be renamed. Rather than World Tourism Day, it should be World Collaborative Economy Day, though in the Balearics it might be more appropriate to name it Biel Day. And as Cala Millor is where they celebrate world tourism more than anywhere else (the resort's tourist fiestas week starts tomorrow), Biel should get himself along. Meet and greet the tourists. Oh, by the way, have I told you that next year you'll be forking out a couple of euros a night for yourself, your good lady wife and the kids? Yep, Biel Day it should be. Tourism apocalypse beckons. There'll be no more tourism fiesta days. Party's over.
Saturday, July 11, 2015
Tourist Tax On Hold?
Those fearful that a tourist tax is about to be suddenly applied need not be too alarmed. This, at least, is the implication of what Balearic vice-president and tourism minister Biel Barceló is saying. He first wants to introduce proper regulation to the non-hotel accommodation sector before such a tax is introduced.
There is a great deal of sense in this. Firstly, such regulation would go some way to ameliorating hoteliers' concerns that it will be they who bear the brunt of a tax: under its previous incarnation, they bore all the brunt. Secondly, if more properties come to be registered, then the regional government will be able to raise greater revenue from the tax. This would mirror the situation in Catalonia, where a more permissive regime in terms of which types of property could be registered as private holiday accommodation was driven at least in part by a desire to maximise revenue.
Essentially, therefore, two of the great controversies of Balearic tourism will coalesce and form one massive controversy. The hoteliers, while they might be reassured of a determination on behalf of Barceló to be as inclusive as possible when it comes to the application of the tax, will not take kindly to a system which may establish a register of holiday accommodation that they have, for years, sought to prevent.
In practical terms, as far as tourist tax implementation is concerned, if it is to be dependent upon the registration factor, then this will now occur some way down the line. Legislation for accommodation regulation will take time, and even greater time will be needed for it to be into effect. Property owners, one would imagine, would be given a reasonable period of grace in order to comply with whatever this legislation might entail, and if it were to also include a quality system - akin to Catalonia's - which identifies the standard of accommodation and its services, then this would add further time.
The heat being generated by both issues has been increasing in line with the temperatures of high summer. Exceltur, a body which represents some pretty exclusive hotelier interests, has been going full frontal with its propaganda against private accommodation. While some of what it and its researchers - Ernst & Young among them - have to say is perfectly legitimate, but the animosity towards alternative accommodation and especially P2P services such as Airbnb doesn't do it total credit, and there is research which takes issue with its apocalyptic (for hoteliers) vision. Still, Exceltur does accept the need for proper regulation and a further need to eliminate the confusion that surrounds private accommodation rental, something that is heightened by the lack of standardised regulation across Spain as a whole.
Exceltur's latest broadside is to report that Palma has the highest level of illegal rental in the country, something exacerbated by the sheer lack of inspectors. In this regard its report is not wrong and it exposes one of the great fault lines in governmental desires (those of the previous government) to get tough. The new government faces exactly the same issue, and whether it is regulation on private accommodation, tougher standards for all-inclusives or whatever, the sheer impossibility - on cost grounds - for there to be an army of inspectors will always render much legislation all but redundant.
Given this, it is more urgent than ever to introduce some pragmatism to legislation. By reducing through more sensible regulation the amount of accommodation deemed to be illegal, then the accommodation which remains genuinely illegal would be easier to monitor: all things being relative.
Barceló will have doubtless taken note of opinions expressed by mayors of some of Mallorca's principal tourism municipalities - Alcúdia, Andratx, Santanyi among them - who advocate new forms of regulation for apartments. He would do well to sit down with these mayors and counsel their views. It is no longer the case that certain towns, e.g. Pollensa, have a disproportionately high amount of private accommodation: P2P and economic crisis have widened the supply across all towns.
Arriving at something like satisfactory regulation will not be straightforward, making a delay to the introduction of a tourist tax potentially even longer. And one hopes that as and when regulation is drawn up it isn't as woolly as the thinking currently being applied to the tourist tax and how it would be collected. Basically, the government doesn't know what sort of mechanism would be best and whether it might have to rely on the agreements of authorities like AENA in order for the tax to be levied on arrival, a mechanism which, for a variety of reasons, would in any event be undesirable.
There is a great deal of sense in this. Firstly, such regulation would go some way to ameliorating hoteliers' concerns that it will be they who bear the brunt of a tax: under its previous incarnation, they bore all the brunt. Secondly, if more properties come to be registered, then the regional government will be able to raise greater revenue from the tax. This would mirror the situation in Catalonia, where a more permissive regime in terms of which types of property could be registered as private holiday accommodation was driven at least in part by a desire to maximise revenue.
Essentially, therefore, two of the great controversies of Balearic tourism will coalesce and form one massive controversy. The hoteliers, while they might be reassured of a determination on behalf of Barceló to be as inclusive as possible when it comes to the application of the tax, will not take kindly to a system which may establish a register of holiday accommodation that they have, for years, sought to prevent.
In practical terms, as far as tourist tax implementation is concerned, if it is to be dependent upon the registration factor, then this will now occur some way down the line. Legislation for accommodation regulation will take time, and even greater time will be needed for it to be into effect. Property owners, one would imagine, would be given a reasonable period of grace in order to comply with whatever this legislation might entail, and if it were to also include a quality system - akin to Catalonia's - which identifies the standard of accommodation and its services, then this would add further time.
The heat being generated by both issues has been increasing in line with the temperatures of high summer. Exceltur, a body which represents some pretty exclusive hotelier interests, has been going full frontal with its propaganda against private accommodation. While some of what it and its researchers - Ernst & Young among them - have to say is perfectly legitimate, but the animosity towards alternative accommodation and especially P2P services such as Airbnb doesn't do it total credit, and there is research which takes issue with its apocalyptic (for hoteliers) vision. Still, Exceltur does accept the need for proper regulation and a further need to eliminate the confusion that surrounds private accommodation rental, something that is heightened by the lack of standardised regulation across Spain as a whole.
Exceltur's latest broadside is to report that Palma has the highest level of illegal rental in the country, something exacerbated by the sheer lack of inspectors. In this regard its report is not wrong and it exposes one of the great fault lines in governmental desires (those of the previous government) to get tough. The new government faces exactly the same issue, and whether it is regulation on private accommodation, tougher standards for all-inclusives or whatever, the sheer impossibility - on cost grounds - for there to be an army of inspectors will always render much legislation all but redundant.
Given this, it is more urgent than ever to introduce some pragmatism to legislation. By reducing through more sensible regulation the amount of accommodation deemed to be illegal, then the accommodation which remains genuinely illegal would be easier to monitor: all things being relative.
Barceló will have doubtless taken note of opinions expressed by mayors of some of Mallorca's principal tourism municipalities - Alcúdia, Andratx, Santanyi among them - who advocate new forms of regulation for apartments. He would do well to sit down with these mayors and counsel their views. It is no longer the case that certain towns, e.g. Pollensa, have a disproportionately high amount of private accommodation: P2P and economic crisis have widened the supply across all towns.
Arriving at something like satisfactory regulation will not be straightforward, making a delay to the introduction of a tourist tax potentially even longer. And one hopes that as and when regulation is drawn up it isn't as woolly as the thinking currently being applied to the tourist tax and how it would be collected. Basically, the government doesn't know what sort of mechanism would be best and whether it might have to rely on the agreements of authorities like AENA in order for the tax to be levied on arrival, a mechanism which, for a variety of reasons, would in any event be undesirable.
Friday, March 20, 2015
When A Law Isn't A Law
A peculiarity of Balearics legislation is that it isn't as legislative as it might appear. Laws are drafted, debated, red-drafted and then presented, approved and posted onto the Official Bulletin, but they do not end there. Indeed, this can be only the beginning of the process. This, at least, is what we have to accept is the case with Balearics tourism law. Approved in 2012, it seems that it was more of a consultative document than the real thing. Representatives of various tourism and business associations met tourism minister Jaime Martínez on Tuesday and they expressed their approval for the law, three years after it had been approved. Or so we had thought.
The key to all this lies with the word "regulation". This might seem to be synonymous with legislation, but it would appear that legislation needs to be regulated. Confused? You should be. The final and definitive contents of the 2012 law will be revealed next month, and to add to the confusion, we understand from minister Martínez that the 2012 (2015) law will in fact be the first regulated tourism law in the Balearics because the 1999 tourism law "did not develop regulations". Meaning what precisely?
Legislative lunacy aside, it might be noted that not all the associations who met with Martínez or had met with him during the process of regulating the legislation are in total agreement with the regulations. Most are, but then most will be getting what they want, like the hoteliers. Among these associations was APTUR, the one for the renting of tourist apartments (holiday lets). It is probably safe to assume that when April comes they will not be singing the law's praises.
The timing of this regulation has not gone unnoticed. Firstly, it will be issued just as the season gets underway and secondly, it will appear just weeks before the election. The timing is, therefore, both poor but also expedient - the PP is ensuring the law is fully regulated just in case it loses the election and some other lot discovers that the law hadn't been fully regulated and so applies different interpretations.
Martínez maintains that the industry has been willing to work towards achieving "consensus", but as he also says that the law marks commitments to quality and against "illegal supply and unfair competition", one would have to doubt that there is consensus. The holiday lets issue apart, it will be interesting to know exactly how fears of the non-hotel complementary sector have been addressed in respect, for example, of the so-called secondary activities in hotels which pose a direct competitive threat to the complementary sector. The chances are that they won't have been or this would have meant backtracking on what the 2012 law supposedly permitted and which has been taken as the green light by certain hotels: the Cursach BH Hotel being a prime example because its activities will be open to non-hotel guests, which is what secondary activities refer to.
The key to all this lies with the word "regulation". This might seem to be synonymous with legislation, but it would appear that legislation needs to be regulated. Confused? You should be. The final and definitive contents of the 2012 law will be revealed next month, and to add to the confusion, we understand from minister Martínez that the 2012 (2015) law will in fact be the first regulated tourism law in the Balearics because the 1999 tourism law "did not develop regulations". Meaning what precisely?
Legislative lunacy aside, it might be noted that not all the associations who met with Martínez or had met with him during the process of regulating the legislation are in total agreement with the regulations. Most are, but then most will be getting what they want, like the hoteliers. Among these associations was APTUR, the one for the renting of tourist apartments (holiday lets). It is probably safe to assume that when April comes they will not be singing the law's praises.
The timing of this regulation has not gone unnoticed. Firstly, it will be issued just as the season gets underway and secondly, it will appear just weeks before the election. The timing is, therefore, both poor but also expedient - the PP is ensuring the law is fully regulated just in case it loses the election and some other lot discovers that the law hadn't been fully regulated and so applies different interpretations.
Martínez maintains that the industry has been willing to work towards achieving "consensus", but as he also says that the law marks commitments to quality and against "illegal supply and unfair competition", one would have to doubt that there is consensus. The holiday lets issue apart, it will be interesting to know exactly how fears of the non-hotel complementary sector have been addressed in respect, for example, of the so-called secondary activities in hotels which pose a direct competitive threat to the complementary sector. The chances are that they won't have been or this would have meant backtracking on what the 2012 law supposedly permitted and which has been taken as the green light by certain hotels: the Cursach BH Hotel being a prime example because its activities will be open to non-hotel guests, which is what secondary activities refer to.
Sunday, January 11, 2015
The Wrong Type Of Tourism Regulation
There was a time, and it wasn't so long ago, that the local Spanish media made very little noise about the issue of private holiday accommodation. The tendency was to go along with how the regional government and the hoteliers portrayed the issue, namely that there was an underground economy that was operating a form of unfair competition (to the hoteliers). The narrative ignored the fact that this underground economy was the product of legislative proscription. Prohibition has often led to ways which circumvent it.
The attitude of the local media changed when the national government declined to take responsibility for private holiday accommodation and shoved it down the line to the regions. In practice, where the Balearics were concerned, the tenancy act reform meant very little. The status quo was maintained. Yet, the media had finally been alerted to an issue that had been rumbling for years. It started to adopt a more critical posture and it was joined by politicians from PSOE, a party which had hitherto managed to steadfastly ignore the issue.
Last Wednesday, the Diario de Mallorca devoted its front-page headline and its first two inside pages to a story which started thus: "Mallorca is playing with fire". The fire is that of prohibition, one that is said to be driving tourists away from Mallorca and to other destinations and one that will continue to do so. The sources of information for this claim, primarily representatives of accommodation web portals, do of course have their own business agendas and interests to safeguard, but nonetheless here was an overt statement that was highly critical of the government's posture. "Persecution" was one word used to describe it. The difference in attitude to that in Catalonia and elsewhere in Spain, where there have been or are moves to create a properly regulated system of private accommodation, was revealed starkly.
Mallorca has had a history of not appreciating tourism trends. Low-cost airline carriers were once considered a threat, so attempts were made to kill them off. The misunderstanding as to what low cost actually represented was still being perpetrated only three or so years ago by someone who should have known better: the then president of the Fomento (the Mallorca Tourist Board). Low cost equalled low quality. It was wrongheaded but was in keeping with a malaise that continues to dog Mallorca. The island cannot or is unwilling to adapt to tourism changes, and these changes are ever more rapid than they once were.
The P2P sharing culture is the latest of these changes and one of the most potent. It attacks the complacent notion of hotel domination and a misguided belief that Mallorca should exist for the benefit of its hoteliers and no one else. At a time when the regional government can bask in the warmth from the glow of new or redeveloped hotel complexes, straining extra stars inside their walls and grounds, it does not accept that there is a different glow, that of the fire it is playing with (according to the report this week).
Fundamentally, the government demonstrates an unwillingness or incapacity of intellect to appreciate just how much travel and tourism are changing. Driven by technological applications, there is a societal shift towards the tourist as user, and it is he or she who dominates and not, therefore, the hotelier tourism god. Holidaymakers will not turn their backs on hotels totally or anything like totally. There will always be very high demand, especially as quality increases. But this isn't the point. The tourist-user is not beholden to a conventional model of tourism, as it has been applied in Mallorca. There is a vast market which is proving that this is the case, and it is one to which Mallorca has to adapt and so introduce comprehensible, fair and flexible regulations in order to feature in this new tourism world. Is Mallorca up to the challenge? Until it finds those with the intellect, the understanding of technological advances and constantly shifting consumer values and the capacity to not say boo to the hoteliers but to embrace them in establishing a co-ordinated model that benefits different parties, then no. But change might be on the way. Let's see what happens in May.
The attitude of the local media changed when the national government declined to take responsibility for private holiday accommodation and shoved it down the line to the regions. In practice, where the Balearics were concerned, the tenancy act reform meant very little. The status quo was maintained. Yet, the media had finally been alerted to an issue that had been rumbling for years. It started to adopt a more critical posture and it was joined by politicians from PSOE, a party which had hitherto managed to steadfastly ignore the issue.
Last Wednesday, the Diario de Mallorca devoted its front-page headline and its first two inside pages to a story which started thus: "Mallorca is playing with fire". The fire is that of prohibition, one that is said to be driving tourists away from Mallorca and to other destinations and one that will continue to do so. The sources of information for this claim, primarily representatives of accommodation web portals, do of course have their own business agendas and interests to safeguard, but nonetheless here was an overt statement that was highly critical of the government's posture. "Persecution" was one word used to describe it. The difference in attitude to that in Catalonia and elsewhere in Spain, where there have been or are moves to create a properly regulated system of private accommodation, was revealed starkly.
Mallorca has had a history of not appreciating tourism trends. Low-cost airline carriers were once considered a threat, so attempts were made to kill them off. The misunderstanding as to what low cost actually represented was still being perpetrated only three or so years ago by someone who should have known better: the then president of the Fomento (the Mallorca Tourist Board). Low cost equalled low quality. It was wrongheaded but was in keeping with a malaise that continues to dog Mallorca. The island cannot or is unwilling to adapt to tourism changes, and these changes are ever more rapid than they once were.
The P2P sharing culture is the latest of these changes and one of the most potent. It attacks the complacent notion of hotel domination and a misguided belief that Mallorca should exist for the benefit of its hoteliers and no one else. At a time when the regional government can bask in the warmth from the glow of new or redeveloped hotel complexes, straining extra stars inside their walls and grounds, it does not accept that there is a different glow, that of the fire it is playing with (according to the report this week).
Fundamentally, the government demonstrates an unwillingness or incapacity of intellect to appreciate just how much travel and tourism are changing. Driven by technological applications, there is a societal shift towards the tourist as user, and it is he or she who dominates and not, therefore, the hotelier tourism god. Holidaymakers will not turn their backs on hotels totally or anything like totally. There will always be very high demand, especially as quality increases. But this isn't the point. The tourist-user is not beholden to a conventional model of tourism, as it has been applied in Mallorca. There is a vast market which is proving that this is the case, and it is one to which Mallorca has to adapt and so introduce comprehensible, fair and flexible regulations in order to feature in this new tourism world. Is Mallorca up to the challenge? Until it finds those with the intellect, the understanding of technological advances and constantly shifting consumer values and the capacity to not say boo to the hoteliers but to embrace them in establishing a co-ordinated model that benefits different parties, then no. But change might be on the way. Let's see what happens in May.
Monday, January 05, 2015
Uber And Out: Ridesharing in Spain
You would never get an Uber driver talking over a crackly line to a controller, getting information as to the next pick-up and finishing the communication with an "over and out". Uber drivers don't do this type of communication. They don't have controllers. They go as they please within the cities they serve, anticipating pocketing 80% of fares, needing only an Uber phone, an iPhone supplied by the company (for a deposit) that is loaded with a driver Uber app. Their only spoken communication will be with users, those in the car or those who may phone with a specific request. What could be easier?
If you live on Mars you might not know about Uber. In which case ... a short lesson. Uber is an American company that was founded under six years ago. It operates using a mobile app via which users can find the nearest driver who is signed up with the company. No money changes hands, as the user supplies credit-card information. The fare is calculated through a mix of time and distance. Drivers are vetted, so they have to provide proof of a valid driving licence and vehicle insurance and photographic proof of their cars; no rust buckets with many a dent for an Uber driver.
Uber rolled out its first overseas service in Paris at the end of 2011. It came to Spain early last year but not to Mallorca. The service operates only in Madrid, Barcelona and Valencia. Or did. Before a judge instructed Uber to cease operations last month. The taxi-drivers in Madrid denounced Uber, claiming unfair competition from drivers who have neither a licence to operate as a taxi-driver or the specific insurance for providing a public transport service. Spain is not the only country to have introduced a ban. France, for example, has as well.
The ban is not, however, looked upon as the end for Uber in Spain. The company is looking at ways of working around current laws and also, naturally enough, at what other courts might have to say, which might well mean at European level. It might also be encouraged by the fact that Spain's National Competition Commission (CNC) declined in June last year to ban Uber. Indeed, the commission has since opened up a process of public debate and consultation into what is generally now being referred to as the "collaborative economy", one through which individuals offer their services (of different types) via other mobile apps or social media. The Madrid taxi-drivers have got their way with the court but not with the commission.
Uber and the ridesharing (or carsharing, if you prefer) service that it makes available is one part of the so-called P2P phenomenon - peer to peer, in this instance user to driver. Uber is the facilitator and not the controller, even if it does have or is supposed to have certain controls over its drivers and can instantaneously change the basis for fare calculation according to demand, as typified by its "surge pricing"; it was this which pushed fares up during the hostage crisis in Sydney and drew such an outcry, for which the company has since apologised.
Essentially though, Uber is peer to peer, with one of the peers, the driver, providing his service, his time, his skills (?) and his car. It is, therefore, a similar principle by which accommodation websites like Airbnb operate. A peer has a room, a flat, a house to rent. The other peer, the customer, books it; Airbnb makes its money by taking a cut from the rent paid, just as Uber takes its 20% from a car fare.
The competition commission has not confined itself to Uber. It has also opened up a consultation regarding the renting of private accommodation, something which brings us yet again to the thorny issue of the holiday let. What is interesting with the Uber case, however, is that the Madrid court has applied a nationwide ban. Where accommodation is concerned, of course, it is up to the regions to decide. But the ban makes it ever more imperative that Spain and its regions adopt altogether more coherent approaches to the "collaborative economy". P2P has muddied the already muddy waters of holiday let regulations, but it is not going away, either where accommodation is concerned or ridesharing or any other service. There is now a lobby group, Sharing España, which includes providers similar to Uber; they are simply not as well-known and don't attract the same controversy or attention.
Uber is not out. It will surely return, but it will require a shift in understanding by regulators of a dynamic - the "collaborative economy" - which as yet is not well enough understood in Spain and is certainly not well enough understood in terms of the way in which, in the grander scheme of things, it may well bring about a change to traditional notions of employment and of work.
If you live on Mars you might not know about Uber. In which case ... a short lesson. Uber is an American company that was founded under six years ago. It operates using a mobile app via which users can find the nearest driver who is signed up with the company. No money changes hands, as the user supplies credit-card information. The fare is calculated through a mix of time and distance. Drivers are vetted, so they have to provide proof of a valid driving licence and vehicle insurance and photographic proof of their cars; no rust buckets with many a dent for an Uber driver.
Uber rolled out its first overseas service in Paris at the end of 2011. It came to Spain early last year but not to Mallorca. The service operates only in Madrid, Barcelona and Valencia. Or did. Before a judge instructed Uber to cease operations last month. The taxi-drivers in Madrid denounced Uber, claiming unfair competition from drivers who have neither a licence to operate as a taxi-driver or the specific insurance for providing a public transport service. Spain is not the only country to have introduced a ban. France, for example, has as well.
The ban is not, however, looked upon as the end for Uber in Spain. The company is looking at ways of working around current laws and also, naturally enough, at what other courts might have to say, which might well mean at European level. It might also be encouraged by the fact that Spain's National Competition Commission (CNC) declined in June last year to ban Uber. Indeed, the commission has since opened up a process of public debate and consultation into what is generally now being referred to as the "collaborative economy", one through which individuals offer their services (of different types) via other mobile apps or social media. The Madrid taxi-drivers have got their way with the court but not with the commission.
Uber and the ridesharing (or carsharing, if you prefer) service that it makes available is one part of the so-called P2P phenomenon - peer to peer, in this instance user to driver. Uber is the facilitator and not the controller, even if it does have or is supposed to have certain controls over its drivers and can instantaneously change the basis for fare calculation according to demand, as typified by its "surge pricing"; it was this which pushed fares up during the hostage crisis in Sydney and drew such an outcry, for which the company has since apologised.
Essentially though, Uber is peer to peer, with one of the peers, the driver, providing his service, his time, his skills (?) and his car. It is, therefore, a similar principle by which accommodation websites like Airbnb operate. A peer has a room, a flat, a house to rent. The other peer, the customer, books it; Airbnb makes its money by taking a cut from the rent paid, just as Uber takes its 20% from a car fare.
The competition commission has not confined itself to Uber. It has also opened up a consultation regarding the renting of private accommodation, something which brings us yet again to the thorny issue of the holiday let. What is interesting with the Uber case, however, is that the Madrid court has applied a nationwide ban. Where accommodation is concerned, of course, it is up to the regions to decide. But the ban makes it ever more imperative that Spain and its regions adopt altogether more coherent approaches to the "collaborative economy". P2P has muddied the already muddy waters of holiday let regulations, but it is not going away, either where accommodation is concerned or ridesharing or any other service. There is now a lobby group, Sharing España, which includes providers similar to Uber; they are simply not as well-known and don't attract the same controversy or attention.
Uber is not out. It will surely return, but it will require a shift in understanding by regulators of a dynamic - the "collaborative economy" - which as yet is not well enough understood in Spain and is certainly not well enough understood in terms of the way in which, in the grander scheme of things, it may well bring about a change to traditional notions of employment and of work.
Friday, December 19, 2014
The Sharing Lobby
The regulation or non-regulation of holiday lets has reached the highest levels of Spanish governmental administration. The national competition commission is addressing the issue, taking account of the explosion of the P2P phenomenon, i.e. web portals which place consumers in direct contact with providers, be they apartments for rent or other types of service. As the issue climbs towards the top of the regulatory heap, companies engaged in P2P in Spain have formed an association to lobby government. It includes the most celebrated of the P2P websites, Airbnb, plus other accommodation websites and, for example, car sharing sites. It does not include Uber, however. This taxi and transport network has been condemned in Spain for providing unfair competition. A judge has ordered Uber to cease all activities in Spain. The French are to ban Uber from the start of next year.
But if Uber is a sort of black sheep of the P2P community, other web operators are craving legitimacy and have so formed their association - "Sharing España". Much of this sharing, holiday accommodation and so on, is considered by opponents to represent an underground economy, which this week was said to equate to 22% of the Spanish tourism sector. How such a figure is arrived at is unclear, but the secretary-general of the Spanish Confederation of Hotels and Tourist Accommodation, Ramón Estalella, asserted that 22% it was. The hoteliers want tough action on any form of what they see as unfair or illegal competition, but arriving at regulations is far from straightforward. As the director-general for tourism in the region of La Rioja has quite rightly noted, attaining uniform regulation in all regions of Spain would be "unworkable". She has thus reinforced the fact that the devolution of responsibilities for holiday let regulation to the regions by national government is itself all but unworkable; the consequence of this is that there are seventeen separate regulatory frameworks.
The holiday lets sector is now trying to fight back against the hoteliers and their claims. The association for apartments for tourist use (APTUR) in the Balearics has argued that holiday lets generate more employment than the hoteliers do, both directly, e.g. through cleaning services, and indirectly - car hire, restaurants, shops, etc. This lobby in the Balearics has, until recently, been fairly quiet, unlike in the Canaries, and the association for holiday rentals there held its first forum on Monday at which a video was unveiled. It is called "Holiday rental: the tourist decides" and features personal accounts by tourists as to why they opt for non-hotel accommodation. In addition, Homeaway, an online holiday rental marketplace similar to Airbnb, has teamed up with the university in Salamanca to create the first "barometer" of holiday lets activity in Spain and specifically in the Canaries, where the economic impact of the sector is said to have been worth 817 million euros over the past three years. The Canaries are, unlike the Balearics, edging towards a permissive form of regulation akin perhaps to that of Catalonia. And that region, the only part of Spain which has a tourist tax, anticipates generating 10% of revenue from the tax in 2015 from accommodation which has been regularised and which may legitimately form part of P2P sites' offers. Catalonia is looking forward to raising 44 million euros from tax next year, meaning that holiday lets will account for approximately four million. This is revenue which is used for tourism promotion purposes.
But if Uber is a sort of black sheep of the P2P community, other web operators are craving legitimacy and have so formed their association - "Sharing España". Much of this sharing, holiday accommodation and so on, is considered by opponents to represent an underground economy, which this week was said to equate to 22% of the Spanish tourism sector. How such a figure is arrived at is unclear, but the secretary-general of the Spanish Confederation of Hotels and Tourist Accommodation, Ramón Estalella, asserted that 22% it was. The hoteliers want tough action on any form of what they see as unfair or illegal competition, but arriving at regulations is far from straightforward. As the director-general for tourism in the region of La Rioja has quite rightly noted, attaining uniform regulation in all regions of Spain would be "unworkable". She has thus reinforced the fact that the devolution of responsibilities for holiday let regulation to the regions by national government is itself all but unworkable; the consequence of this is that there are seventeen separate regulatory frameworks.
The holiday lets sector is now trying to fight back against the hoteliers and their claims. The association for apartments for tourist use (APTUR) in the Balearics has argued that holiday lets generate more employment than the hoteliers do, both directly, e.g. through cleaning services, and indirectly - car hire, restaurants, shops, etc. This lobby in the Balearics has, until recently, been fairly quiet, unlike in the Canaries, and the association for holiday rentals there held its first forum on Monday at which a video was unveiled. It is called "Holiday rental: the tourist decides" and features personal accounts by tourists as to why they opt for non-hotel accommodation. In addition, Homeaway, an online holiday rental marketplace similar to Airbnb, has teamed up with the university in Salamanca to create the first "barometer" of holiday lets activity in Spain and specifically in the Canaries, where the economic impact of the sector is said to have been worth 817 million euros over the past three years. The Canaries are, unlike the Balearics, edging towards a permissive form of regulation akin perhaps to that of Catalonia. And that region, the only part of Spain which has a tourist tax, anticipates generating 10% of revenue from the tax in 2015 from accommodation which has been regularised and which may legitimately form part of P2P sites' offers. Catalonia is looking forward to raising 44 million euros from tax next year, meaning that holiday lets will account for approximately four million. This is revenue which is used for tourism promotion purposes.
Monday, December 08, 2014
Urgent Vagueness: The tourism decree
The regional government has decreed. Urgent measures have been required. A decree has, therefore, been necessary. It is tourism which demands the urgency. There is no time for the normal parliamentary process that accompanies the passing of a law. The decree will be rubber-stamped by parliament without amendment.
Thirty months after the 2012 tourism law was approved, the government has issued its decree. So urgent have been the measures that it has taken them over two and a half years to get round to them, and now that it has, what are we all supposed to make of these measures because, not untypically for tourism minister Jaime Martínez, they come with any amount of lack of clarity?
The urgency, one fancies, has to do with the proximity of the next elections. This is not a decree to grab votes. It is one of goalpost-shifting in order to, for example, allow the government to wallow in the glow of the publicity surrounding the Rafa Nadal tennis centre. Regulations regarding the concession of licences have had to be amended, and so that is what the government - urgently - has done, and in the process has taken away Manacor town hall's rights in the matter.
De-regulation might be thought to be a good thing, and in the case of the Nadal centre it may well be, but it has plainly suited the government to act in this specific instance while it has not in other instances. This tourism de-regulation has also been applied, bizarrely, to the land on which Son Espases hospital has been built. The decree has declared that this land is in "the general interest" (the Supreme Court had itself decreed eighteen months ago that it had to be), but what this has to do with tourism is frankly anyone's guess.
Here are measures introduced to attempt to ensure that if (when) the Partido Popular loses the next election, they cannot be revoked. It is this, I would suggest, which is the true urgency of the decree. But there are other aspects of tourism which demand equal urgency, and which are covered by the decree, that do not get such regulatory clarity. Take holiday lets, for instance. On the one hand we are led to believe that a specific decree related to them has been postponed. On the other we are told that there will be no regulation. To add to the opaqueness, island councils are to "analyse" incidences of holiday lets. What is the point of analysing something if there is to be no regulation?
Because Martínez deals in obfuscation, it is just possible to believe that these analyses may eventually lead to some modification of current legislation to do with private holiday accommodation, but one can only say "may". If a specific decree has indeed been postponed, this may mean postponement until the elections. Is the government, therefore, not wanting to adopt "urgent measures" in respect of holiday lets that might contradict its own stance on the subject and the wishes of the hoteliers? It's impossible to say for sure.
Further analyses - and the decree actually refers to "each tourist area", which implies each resort rather than whole islands - are to be conducted into the "incidence" of all-inclusive. The decree is vague to the point of total silence as to what these are intended to do. But again, as with holiday lets, it is just conceivable that these analyses could lead to further measures to limit the incidence. In the absence of any clarity, however, one cannot be certain.
A headlining aspect of the decree - in "The Bulletin" at any rate - was the provision of incentives for businesses to stay open all year. It might be advantageous for the government to imply that businesses will be open all year, but this is not what is in the decree. The government does consider "seasonality" to be an urgent matter, but it has been urgent pretty much since the dawn of Mallorca's mass tourism. For the government to now try and trumpet some decisiveness it is taking on this urgent matter is eyewash, especially as incentives for businesses which open for a minimum of eight months (not all year, note) were in the original 2012 law. The wording in the decree is unaltered.
What has been added is provision for incentives to tourist businesses in tourist zones declared as being "mature" (as in having stock and infrastructure which is outdated or obsolete). So far only Playa de Palma has been defined as a mature zone (Magalluf, Santa Ponsa and Peguera are due to be). The decree has widened the scope for incentives to include pretty much any business working in the tourism sector, but as for seasonality, it has reduced the minimum opening period - it is "from six months". That is most certainly not all year.
Thirty months after the 2012 tourism law was approved, the government has issued its decree. So urgent have been the measures that it has taken them over two and a half years to get round to them, and now that it has, what are we all supposed to make of these measures because, not untypically for tourism minister Jaime Martínez, they come with any amount of lack of clarity?
The urgency, one fancies, has to do with the proximity of the next elections. This is not a decree to grab votes. It is one of goalpost-shifting in order to, for example, allow the government to wallow in the glow of the publicity surrounding the Rafa Nadal tennis centre. Regulations regarding the concession of licences have had to be amended, and so that is what the government - urgently - has done, and in the process has taken away Manacor town hall's rights in the matter.
De-regulation might be thought to be a good thing, and in the case of the Nadal centre it may well be, but it has plainly suited the government to act in this specific instance while it has not in other instances. This tourism de-regulation has also been applied, bizarrely, to the land on which Son Espases hospital has been built. The decree has declared that this land is in "the general interest" (the Supreme Court had itself decreed eighteen months ago that it had to be), but what this has to do with tourism is frankly anyone's guess.
Here are measures introduced to attempt to ensure that if (when) the Partido Popular loses the next election, they cannot be revoked. It is this, I would suggest, which is the true urgency of the decree. But there are other aspects of tourism which demand equal urgency, and which are covered by the decree, that do not get such regulatory clarity. Take holiday lets, for instance. On the one hand we are led to believe that a specific decree related to them has been postponed. On the other we are told that there will be no regulation. To add to the opaqueness, island councils are to "analyse" incidences of holiday lets. What is the point of analysing something if there is to be no regulation?
Because Martínez deals in obfuscation, it is just possible to believe that these analyses may eventually lead to some modification of current legislation to do with private holiday accommodation, but one can only say "may". If a specific decree has indeed been postponed, this may mean postponement until the elections. Is the government, therefore, not wanting to adopt "urgent measures" in respect of holiday lets that might contradict its own stance on the subject and the wishes of the hoteliers? It's impossible to say for sure.
Further analyses - and the decree actually refers to "each tourist area", which implies each resort rather than whole islands - are to be conducted into the "incidence" of all-inclusive. The decree is vague to the point of total silence as to what these are intended to do. But again, as with holiday lets, it is just conceivable that these analyses could lead to further measures to limit the incidence. In the absence of any clarity, however, one cannot be certain.
A headlining aspect of the decree - in "The Bulletin" at any rate - was the provision of incentives for businesses to stay open all year. It might be advantageous for the government to imply that businesses will be open all year, but this is not what is in the decree. The government does consider "seasonality" to be an urgent matter, but it has been urgent pretty much since the dawn of Mallorca's mass tourism. For the government to now try and trumpet some decisiveness it is taking on this urgent matter is eyewash, especially as incentives for businesses which open for a minimum of eight months (not all year, note) were in the original 2012 law. The wording in the decree is unaltered.
What has been added is provision for incentives to tourist businesses in tourist zones declared as being "mature" (as in having stock and infrastructure which is outdated or obsolete). So far only Playa de Palma has been defined as a mature zone (Magalluf, Santa Ponsa and Peguera are due to be). The decree has widened the scope for incentives to include pretty much any business working in the tourism sector, but as for seasonality, it has reduced the minimum opening period - it is "from six months". That is most certainly not all year.
Friday, December 05, 2014
Going Up-Market In The Balearics
How far can the Balearics risk pushing tourism up-market to the potential detriment of the bread-and-butter three-star tourist profile? It is a question that is being asked and one for which further information has come from the tourism ministry's yearbook. This shows that the number of beds in four and five-star hotels has risen by almost 17,000 since 2008. The drive towards quality improvement was born out of economic crisis, and so this increase should be considered a very positive one. Yet, with 57 more four and five-star hotels than there were in 2008, there remains the nagging worry about the islands potentially pricing themselves out of the market. Or should that be out of a market?
The president of the hoteliers' federation, Aurelio Vázquez, is in no doubt that the news is positive; it has been a "qualitative leap". With quality, investment and innovation in mind, Vázquez, who is also Iberostar's CEO for Europe, the Middle East and Africa, has been addressing the structure of the hotel industry in Mallorca and in Spain. He believes there is too much fragmentation, by which he means that there are too many smaller hotel chains which are not delivering and are not capable of delivering the necessary improvements to hotel stock. While this might sound like a call for large chains such as his own to gobble smaller ones up, he is almost certainly correct when he points to the negative consequence of fragmentation. Quality may suffer along with marketing and branding, all of them increasingly important in the global travel market. Vázquez concedes that Spanish chains have not necessarily been that good at branding, but larger ones have been upping their branding game notably. Be Live (Globalia), Meliá, Barceló and Iberostar itself are all examples of chains engaged in branding investment.
Vázquez, meanwhile, has been back on his holiday-lets hobby-horse. He has warned that Spain is "in danger of mortgaging its tourism" because of the growth in holiday rental accommodation. He accepts that standalone and semi-detached properties can be included in a regulated accommodation market but not apartments. But if he accepts that some types of property can form part of a "tourism model Spain wants for the next ten to twenty years", why can apartments not also be a part, so long as standards are set and adhered to? The logic is not always easy to follow.
The president of the hoteliers' federation, Aurelio Vázquez, is in no doubt that the news is positive; it has been a "qualitative leap". With quality, investment and innovation in mind, Vázquez, who is also Iberostar's CEO for Europe, the Middle East and Africa, has been addressing the structure of the hotel industry in Mallorca and in Spain. He believes there is too much fragmentation, by which he means that there are too many smaller hotel chains which are not delivering and are not capable of delivering the necessary improvements to hotel stock. While this might sound like a call for large chains such as his own to gobble smaller ones up, he is almost certainly correct when he points to the negative consequence of fragmentation. Quality may suffer along with marketing and branding, all of them increasingly important in the global travel market. Vázquez concedes that Spanish chains have not necessarily been that good at branding, but larger ones have been upping their branding game notably. Be Live (Globalia), Meliá, Barceló and Iberostar itself are all examples of chains engaged in branding investment.
Vázquez, meanwhile, has been back on his holiday-lets hobby-horse. He has warned that Spain is "in danger of mortgaging its tourism" because of the growth in holiday rental accommodation. He accepts that standalone and semi-detached properties can be included in a regulated accommodation market but not apartments. But if he accepts that some types of property can form part of a "tourism model Spain wants for the next ten to twenty years", why can apartments not also be a part, so long as standards are set and adhered to? The logic is not always easy to follow.
Friday, November 28, 2014
Isabel In Quality Land
Isabel Borrego, the Mallorcan who is the national secretary-of-state for tourism, has been suspiciously visible over the past few days. After three years of relative anonymity or of, when becoming visible, a tendency to put her foot in it, she has suddenly taken tourism centre-stage. Something's afoot, or perhaps she's just taking the heat off her boss, Soria, as the flak flies in the Canaries over oil prospecting and is about to fly in the Balearics for the same reason. Whatever the reason for this unexpected activity, Isabel has followed up her grand idea for Shopping Tourism 2015 with the Strategic Plan for Quality, something which has in mind giving Spain the most advanced tourism quality system in the world.
As ever with announcements of such plans, there were precious few details to explain what she meant, other than vague references to perfecting cultures of hospitality and attention to tourists and to attracting tourists with increased purchasing power (the same principle underpins her shopping plan). Asian tourists would appear to be important to all this. Their number has risen by 20% so far this year, and as they spend more than other tourists, Isabel is clearly keen to cash in. Not that Asian tourists are going to mean a great deal for Mallorca at present, save for a few Chinese knocking around on golf courses. Without direct flights, getting a piece of the Asian action will be hard.
Meanwhile, Isabel didn't have good news for hoteliers who have been imploring national government to give them some form of fiscal preference, as in reducing IVA. She didn't believe that this was likely, noting that sectors of the tourism industry (not all but certainly the hotels) do already have preferential treatment in that IVA is charged at a lower rate of 10%.
She has also been speaking about holiday lets, and what she had to say was very little. This is a matter for regional governments, she pointed out, which is something we already knew, the national government having abrogated responsibility (for fear of upsetting the hoteliers) and dressed this up as decentralisation of decision-making, something which has led to the lack of harmony of regulations across Spain.
Figures issued by the Balearics Statistics Institute for October's tourism should be noted by Isabel, by Martínez and by the Mallorcan hoteliers. Though healthy - over one million tourists, which is in fact very healthy for October - the figures point to the importance of non-hotel accommodation in attracting tourists. It can be misleading to refer to a lengthening of the season in respect of October, given that October is part of the summer season, but a lengthening was how these figures were being interpreted in some quarters. The fact that holiday lets were playing a significant role in this lengthening contradicts the frankly stupid comments that have come from Martínez and the hoteliers' federation. They have claimed that holiday lets only intensify seasonality, when it should be obvious that they can play a role in making it less intense and so lengthening the season even further. (When there are so few hotels open, this should be clear.)
As ever with announcements of such plans, there were precious few details to explain what she meant, other than vague references to perfecting cultures of hospitality and attention to tourists and to attracting tourists with increased purchasing power (the same principle underpins her shopping plan). Asian tourists would appear to be important to all this. Their number has risen by 20% so far this year, and as they spend more than other tourists, Isabel is clearly keen to cash in. Not that Asian tourists are going to mean a great deal for Mallorca at present, save for a few Chinese knocking around on golf courses. Without direct flights, getting a piece of the Asian action will be hard.
Meanwhile, Isabel didn't have good news for hoteliers who have been imploring national government to give them some form of fiscal preference, as in reducing IVA. She didn't believe that this was likely, noting that sectors of the tourism industry (not all but certainly the hotels) do already have preferential treatment in that IVA is charged at a lower rate of 10%.
She has also been speaking about holiday lets, and what she had to say was very little. This is a matter for regional governments, she pointed out, which is something we already knew, the national government having abrogated responsibility (for fear of upsetting the hoteliers) and dressed this up as decentralisation of decision-making, something which has led to the lack of harmony of regulations across Spain.
Figures issued by the Balearics Statistics Institute for October's tourism should be noted by Isabel, by Martínez and by the Mallorcan hoteliers. Though healthy - over one million tourists, which is in fact very healthy for October - the figures point to the importance of non-hotel accommodation in attracting tourists. It can be misleading to refer to a lengthening of the season in respect of October, given that October is part of the summer season, but a lengthening was how these figures were being interpreted in some quarters. The fact that holiday lets were playing a significant role in this lengthening contradicts the frankly stupid comments that have come from Martínez and the hoteliers' federation. They have claimed that holiday lets only intensify seasonality, when it should be obvious that they can play a role in making it less intense and so lengthening the season even further. (When there are so few hotels open, this should be clear.)
Friday, October 24, 2014
Martínez Clarifies ... Or Does He?
Balearics tourism minister, Jaime Martínez, who has succeeded in elevating obfuscation to new heights in tourism legislation - a significant feat, it should be said, given the opacity with which this legislation has traditionally been drafted - was answering questions earlier this week which were supposedly going to clarify some of the less clear aspects of the latest round of Jaime tourism legislation. Specifically, there was the issue of holiday lets, about which Jaime admitted that there might just be a little lack of clarity, though it might be noted that he had been told in pretty much no uncertain terms by the sensible people at the Chamber of Commerce that he needed to make things clearer, while, or so I understand, there are those within his own ministry who are far from impressed by his leadership and who have also urged him to create greater transparency.
So, what did we get? Jaime said that there wouldn't be any of this business about properties having been built before 1960 or getting permission from neighbours, which was something we already knew, as Madrid had told him he couldn't make such legal provisions. He then went on to explain that there will be a softening of the law, accepting that there are concerns with how holiday apartments can be marketed through websites and other media. He was making reference to the prohibition on the use of terms such as "holiday" or "vacation", and appeared to suggest that such terms will now be allowed. But was he only referring to properties rented out under the Tenancy Act or was he referring to a broader scope for allowing owners to rent out without running the risk of being fined? It was probably the former, but as Jaime Land is one of confusion, we are still unsure. One thing he did suggest would happen would be that future regulation would include a list of "channels" which would be prohibited in order to remove any doubts. Which meant? Hard to say for the moment, but you never know, there may come a time when the legislation is all crystal clear, though you wouldn't bet on it.
So, what did we get? Jaime said that there wouldn't be any of this business about properties having been built before 1960 or getting permission from neighbours, which was something we already knew, as Madrid had told him he couldn't make such legal provisions. He then went on to explain that there will be a softening of the law, accepting that there are concerns with how holiday apartments can be marketed through websites and other media. He was making reference to the prohibition on the use of terms such as "holiday" or "vacation", and appeared to suggest that such terms will now be allowed. But was he only referring to properties rented out under the Tenancy Act or was he referring to a broader scope for allowing owners to rent out without running the risk of being fined? It was probably the former, but as Jaime Land is one of confusion, we are still unsure. One thing he did suggest would happen would be that future regulation would include a list of "channels" which would be prohibited in order to remove any doubts. Which meant? Hard to say for the moment, but you never know, there may come a time when the legislation is all crystal clear, though you wouldn't bet on it.
Friday, September 12, 2014
Holiday Lets Confusion And Challenges
When Balearics' tourism minister Jaime Martínez said that there was consensus regarding holiday let legislation envisaged in the new tourism decree, we knew that he was talking nonsense. Confirmation of this has come from the non-hotel complementary offer of tourist attractions, restaurants, clubs and retailers which met at the Chamber of Commerce on Tuesday and which today will present its challenges to the decree. These will include a demand that owners of private apartments be allowed to commercialise these apartments as tourist accommodation and advertise them as such through promotional channels such as websites.
The complementary offer also wants movement in two other areas - all-inclusive and hotels' secondary activities. On the first it is calling for minimum quality standards and a minimum period during which all-inclusive can be offered. This latter provision would tackle what does happen in some hotels whereby daily all-inclusive can be obtained. As far as minimum standards are concerned, Martínez has alluded to their introduction without as yet specifying what they might be. On secondary activities, such as having a club or restaurant that is open to the general public, the complementary offer wants a ban placed on keeping these activities going when hotels are otherwise closed, and so is insisting that there be a specific licence which allows them to keep going.
There has been a good deal of other news about the holiday-let situation over the past few days. A detailed study of the situation across Spain by Barcelona-based lawyers Iuristax suggested that the differences in regulation in the various regions of the country could be harmful to the Spanish economy. Their reasoning is quite simple: the different regulations lead to a lack of clarity and to a rise in confusion. Without a harmonised approach there are bound to be discrepancies in control and quality, and these could do a great deal of harm, leading to tourists choosing to opt for alternative destinations having had less than satisfactory experiences.
This lack of harmony was going to be evident from the moment that the national government handed responsibility for regulation to regional governments. It was a strange thing to have done, given, as I have pointed out previously, that residential tourism was identified as a strength of Spanish tourism in the national tourism plan drawn up by the current Spanish Government. The consequence of this is the chaos of different regulatory systems.
From the national confederation for hotels and tourist accommodation (CEHAT) has come a finding that demand for holiday lets is greater among Spanish tourists than foreign visitors. While hoteliers might view this finding with concern, it should also be taken as an indication that the domestic tourist market, which has been in the doldrums for a few years, is genuinely recovering. It was up by around 10% in August.
And coming back to the chaos of different systems, in the Community of Madrid, the association of tourist apartment businesses is taking the regional government to court over its regulations. Moreover, the national competition commission has now got involved. It is studying the text of the Madrid regulations and is seeking detailed explanations from the government. This in itself could be an interesting move. The competition commission has, thus far, stayed out of the holiday-lets arguments. If it becomes more closely involved, it might just make certain regions act rather differently.
The complementary offer also wants movement in two other areas - all-inclusive and hotels' secondary activities. On the first it is calling for minimum quality standards and a minimum period during which all-inclusive can be offered. This latter provision would tackle what does happen in some hotels whereby daily all-inclusive can be obtained. As far as minimum standards are concerned, Martínez has alluded to their introduction without as yet specifying what they might be. On secondary activities, such as having a club or restaurant that is open to the general public, the complementary offer wants a ban placed on keeping these activities going when hotels are otherwise closed, and so is insisting that there be a specific licence which allows them to keep going.
There has been a good deal of other news about the holiday-let situation over the past few days. A detailed study of the situation across Spain by Barcelona-based lawyers Iuristax suggested that the differences in regulation in the various regions of the country could be harmful to the Spanish economy. Their reasoning is quite simple: the different regulations lead to a lack of clarity and to a rise in confusion. Without a harmonised approach there are bound to be discrepancies in control and quality, and these could do a great deal of harm, leading to tourists choosing to opt for alternative destinations having had less than satisfactory experiences.
This lack of harmony was going to be evident from the moment that the national government handed responsibility for regulation to regional governments. It was a strange thing to have done, given, as I have pointed out previously, that residential tourism was identified as a strength of Spanish tourism in the national tourism plan drawn up by the current Spanish Government. The consequence of this is the chaos of different regulatory systems.
From the national confederation for hotels and tourist accommodation (CEHAT) has come a finding that demand for holiday lets is greater among Spanish tourists than foreign visitors. While hoteliers might view this finding with concern, it should also be taken as an indication that the domestic tourist market, which has been in the doldrums for a few years, is genuinely recovering. It was up by around 10% in August.
And coming back to the chaos of different systems, in the Community of Madrid, the association of tourist apartment businesses is taking the regional government to court over its regulations. Moreover, the national competition commission has now got involved. It is studying the text of the Madrid regulations and is seeking detailed explanations from the government. This in itself could be an interesting move. The competition commission has, thus far, stayed out of the holiday-lets arguments. If it becomes more closely involved, it might just make certain regions act rather differently.
Friday, August 08, 2014
Balearics Out Of Step On Holiday Lets
Something significant has happened in the Canary Islands. The regional government headed by Paulino Rivero has announced that it will regulate private holiday accommodation in the islands. The draft legislation will be ready before the end of the year, Rivero's government having given a commitment to this effect to the Canaries association of holiday rentals.
Rivero had signalled his willingness to consider such regulation some time ago. That his administration is now going to turn this willingness into firm legislation does mark a very significant moment for Canaries' tourism. Those islands have typically been as antagonistic towards the private accommodation sector as the Balearics. But even more significant is the fact that the Canaries will join Catalonia, Valencia and Andalusia in either having a system of regulation or being on the point of introducing one. Of the five main sun-and-beach tourism regions of Spain, the Balearics will be the exception to the rule. Other regions of Spain, among them the less sun-and-beach-dependent Basque Country and the not sun-and-beach-dependent-at-all Madrid are also in the process of regulating.
As ever, it is important to point out what regulation means or might mean. It doesn't mean stamping out (this is a commonly made mistake by some commentators who confuse the term regulation with prohibition). It means putting in place specific rules governing the rental of private accommodation for holiday purposes, Catalonia's regulation being the model that other regions are inclined to follow.
With the Balearics out of step with other regions, might there be a change of heart here? Not while the current government is in power. But what might happen following the next regional elections? It's anyone guess at present to try and figure out what sort of hybrid shambles of an administration might emerge, assuming the PP doesn't win (and it looks unlikely that it will, or be in a position to carry on in coalition). But PSOE, at the heart of this probable unholy alliance of Podemos and the left collective of other parties, would be inclined to go down the regulation route. Put it this way, it voiced its support for a relaxation in rules when all the tenancy act furore arose last year.
It's some time off, but the holiday-lets issue could yet prove to be a major political matter come next spring. The hoteliers, for one, will be doing all they can to try and ensure the PP stay in power. But if doesn't, then there's going to be one hell of a fight between the hoteliers and a PSOE-led pact.
Rivero had signalled his willingness to consider such regulation some time ago. That his administration is now going to turn this willingness into firm legislation does mark a very significant moment for Canaries' tourism. Those islands have typically been as antagonistic towards the private accommodation sector as the Balearics. But even more significant is the fact that the Canaries will join Catalonia, Valencia and Andalusia in either having a system of regulation or being on the point of introducing one. Of the five main sun-and-beach tourism regions of Spain, the Balearics will be the exception to the rule. Other regions of Spain, among them the less sun-and-beach-dependent Basque Country and the not sun-and-beach-dependent-at-all Madrid are also in the process of regulating.
As ever, it is important to point out what regulation means or might mean. It doesn't mean stamping out (this is a commonly made mistake by some commentators who confuse the term regulation with prohibition). It means putting in place specific rules governing the rental of private accommodation for holiday purposes, Catalonia's regulation being the model that other regions are inclined to follow.
With the Balearics out of step with other regions, might there be a change of heart here? Not while the current government is in power. But what might happen following the next regional elections? It's anyone guess at present to try and figure out what sort of hybrid shambles of an administration might emerge, assuming the PP doesn't win (and it looks unlikely that it will, or be in a position to carry on in coalition). But PSOE, at the heart of this probable unholy alliance of Podemos and the left collective of other parties, would be inclined to go down the regulation route. Put it this way, it voiced its support for a relaxation in rules when all the tenancy act furore arose last year.
It's some time off, but the holiday-lets issue could yet prove to be a major political matter come next spring. The hoteliers, for one, will be doing all they can to try and ensure the PP stay in power. But if doesn't, then there's going to be one hell of a fight between the hoteliers and a PSOE-led pact.
Thursday, July 24, 2014
The Illogic Of Mallorca's Tourism
There are two organisations in Mallorca which above all others deserve being listened to when it comes to tourism issues. Neither may be totally independent - (which organisation can be?) - but each does its best in being objective. The organisations are the Chamber of Commerce and the Universitat de les Illes Balears. They strive for objectivity, and one reason why they generally succeed in doing so is because they both undertake their own research.
Antoni Riera, professor of applied economics at the university, has been making some observations about the nature of Mallorca's tourism, drawing on a study that was undertaken last summer. The findings will come as no surprise, but they will be findings which, in certain respects, will be ignored. A key one has to do with private accommodation tourism, aka holiday lets. Tourists who rent accommodation spend on average 30% more than tourists who stay in hotels. This is spend which is necessary. It is what keeps a great number of the almost 50,000 tourist-related businesses (the complementary sector and tourism services) going.
Who will be doing the ignoring? Those who are not objective; the regional government being among them. The hoteliers will also want to ignore the findings except to point out that this rental market is partly illegal and unfair competition. It is unfair in different ways, one being that the accommodation is generally cheaper. And so it may well be. But that is the reason why those doing the renting can spend 30% more than the hotel-based tourist.
This 30% figure is striking not just in that it shows a much higher level of spending. It is also very similar to the figure for the total spend by tourists in Mallorca that ends up with the complementary sector. That figure is 29%. Where does the rest go? On hotel accommodation and price of the holiday package.
It needs to be noted that the hotel part of the equation includes all type of board and so not only all-inclusive, but all-inclusive has exacerbated the situation and quite dramatically so. Economic crisis brought about a significant increase in the level of AI. The consequence has been that, although Mallorca has registered record numbers of tourists in the past couple of years and has in fact registered record levels of turnover, the level of spend has declined and is continuing to decline. All-inclusives have seen to this and will continue to see to this.
As I say, none of this will come as a surprise. Indeed, none of it is new. But it sometimes needs organisations with real credibility to try and get the message across. The trouble is that they are consistently ignored, as was the Chamber of Commerce when it issued a report in 2006. This looked at the level of private accommodation holiday rental. One of the report's conclusions was that spending behaviour between hotel and rental tourists represented two distinct profiles. The former spent less than the latter. Another conclusion was that rental tourism lengthened the tourism season (the hoteliers have consistently said that it doesn't). A further conclusion was that a "more stable" tourist resort required a capacity for rental tourism.
We were given grand figures this week for the economic contribution of all-inclusives. 2.5 billion euros. At least there was an admission that the lion's share of this comprised the cost of hotel accommodation and the package. I've been seemingly banging my head against a brick wall for years trying to explain that spend statistics primarily consist of these costs. Just as others, like the Chamber of Commerce and the university, have been trying to explain that there is a vast tourism population which contributes negligible amounts to the local economy and that there is a significant tourism population which stays in rental accommodation which contributes a great deal to the local, non-hotel economy. If there was any logic to Mallorca's tourism, you would think that someone in government might reflect on the model of the island's tourism and conclude that the all-eggs-in-the-hotel-basket model is not necessarily the best model.
But then, when did logic have anything to do with anything? If it did, then the government would accept that there are distinct profiles of tourist, as the Chamber of Commerce noted in 2006, and as Professor Riera has reiterated this past week. One profile being that which makes a telling contribution to the general economy and another one which doesn't.
Antoni Riera, professor of applied economics at the university, has been making some observations about the nature of Mallorca's tourism, drawing on a study that was undertaken last summer. The findings will come as no surprise, but they will be findings which, in certain respects, will be ignored. A key one has to do with private accommodation tourism, aka holiday lets. Tourists who rent accommodation spend on average 30% more than tourists who stay in hotels. This is spend which is necessary. It is what keeps a great number of the almost 50,000 tourist-related businesses (the complementary sector and tourism services) going.
Who will be doing the ignoring? Those who are not objective; the regional government being among them. The hoteliers will also want to ignore the findings except to point out that this rental market is partly illegal and unfair competition. It is unfair in different ways, one being that the accommodation is generally cheaper. And so it may well be. But that is the reason why those doing the renting can spend 30% more than the hotel-based tourist.
This 30% figure is striking not just in that it shows a much higher level of spending. It is also very similar to the figure for the total spend by tourists in Mallorca that ends up with the complementary sector. That figure is 29%. Where does the rest go? On hotel accommodation and price of the holiday package.
It needs to be noted that the hotel part of the equation includes all type of board and so not only all-inclusive, but all-inclusive has exacerbated the situation and quite dramatically so. Economic crisis brought about a significant increase in the level of AI. The consequence has been that, although Mallorca has registered record numbers of tourists in the past couple of years and has in fact registered record levels of turnover, the level of spend has declined and is continuing to decline. All-inclusives have seen to this and will continue to see to this.
As I say, none of this will come as a surprise. Indeed, none of it is new. But it sometimes needs organisations with real credibility to try and get the message across. The trouble is that they are consistently ignored, as was the Chamber of Commerce when it issued a report in 2006. This looked at the level of private accommodation holiday rental. One of the report's conclusions was that spending behaviour between hotel and rental tourists represented two distinct profiles. The former spent less than the latter. Another conclusion was that rental tourism lengthened the tourism season (the hoteliers have consistently said that it doesn't). A further conclusion was that a "more stable" tourist resort required a capacity for rental tourism.
We were given grand figures this week for the economic contribution of all-inclusives. 2.5 billion euros. At least there was an admission that the lion's share of this comprised the cost of hotel accommodation and the package. I've been seemingly banging my head against a brick wall for years trying to explain that spend statistics primarily consist of these costs. Just as others, like the Chamber of Commerce and the university, have been trying to explain that there is a vast tourism population which contributes negligible amounts to the local economy and that there is a significant tourism population which stays in rental accommodation which contributes a great deal to the local, non-hotel economy. If there was any logic to Mallorca's tourism, you would think that someone in government might reflect on the model of the island's tourism and conclude that the all-eggs-in-the-hotel-basket model is not necessarily the best model.
But then, when did logic have anything to do with anything? If it did, then the government would accept that there are distinct profiles of tourist, as the Chamber of Commerce noted in 2006, and as Professor Riera has reiterated this past week. One profile being that which makes a telling contribution to the general economy and another one which doesn't.
Friday, July 04, 2014
The Holiday Let Takeover In Mallorca
One headline this week has announced that "for the first time the majority of tourists in Mallorca are staying in non-hotel accommodation". The news that Son Sant Joan has been beating records in terms of passenger numbers since May and is likely to continue beating them during the summer has led to the conclusion that these passenger numbers are the result of tourists staying in non-hotel accommodation. The numbers don't tally with hotel occupancy numbers.
Well, whoever would have thought it? Why has Son Sant Joan been getting the passenger numbers it has until now? Not just because of hotels, that's for sure. If there is indeed now a majority of tourists staying in non-hotel accommodation, then this should come as absolutely no surprise. Mallorca cannot possibly have the number of tourists it gets and put them all in hotels because, despite the high number of hotel places (some 280,000), it is impossible for hotels to get anywhere near meeting tourist demand. It's been said time and time again that this is the case.
Nevertheless, in the quieter months of the summer season such as May, visitors could, in theory, all be accommodated in hotels. That they are not should not be a reason for government and hoteliers to attack the non-hotel accommodation sector (included in which is the so-called illegal offer). It should be a reason for asking why this is so. And there are several reasons. Choice, price, quality in some instances, and of course supply, both legal and illegal.
The passenger numbers will, as ever, be used by the Mallorcan hoteliers federation to ratchet up its attack on the non-hotel sector. They will be used by the government to justify more inspections of properties. It says there have been 3,000 such inspections since January. Aware of the need of the political support of the hoteliers, it will do whatever it can to try and demonstrate that it is acting tough.
But the government, and it knows it, cannot and will not eliminate illegal supply. As the level of non-hotel accommodation is as high as it apparently is, then the pragmatic route - one which the government steadfastly rejects - should be the one it adopts. Permissive regulation, therefore.
Catalonia, with its permissive regime, still faces a sizable problem with illegal accommodation. But having taken the decision to permit registration of the hundreds, thousands of properties that it has, it has also taken a very strict approach on accommodation which contravenes its regulation. So, it is permissive but also restrictive in an appropriate way. It has opened up the market to private property owners but it isn't about to tolerate the ingratitude of those owners who do not play by its perfectly reasonable rules. Unlike the Balearics, where tourism minister Martinez talks tough but where he presents little evidence as to what the consequence of the 3,000 inspections has been, in Catalonia it has processed under a half of the 284 actions it has so far taken against illegal properties. Till now it has realised a total of over half a million euros in fines.
Well, whoever would have thought it? Why has Son Sant Joan been getting the passenger numbers it has until now? Not just because of hotels, that's for sure. If there is indeed now a majority of tourists staying in non-hotel accommodation, then this should come as absolutely no surprise. Mallorca cannot possibly have the number of tourists it gets and put them all in hotels because, despite the high number of hotel places (some 280,000), it is impossible for hotels to get anywhere near meeting tourist demand. It's been said time and time again that this is the case.
Nevertheless, in the quieter months of the summer season such as May, visitors could, in theory, all be accommodated in hotels. That they are not should not be a reason for government and hoteliers to attack the non-hotel accommodation sector (included in which is the so-called illegal offer). It should be a reason for asking why this is so. And there are several reasons. Choice, price, quality in some instances, and of course supply, both legal and illegal.
The passenger numbers will, as ever, be used by the Mallorcan hoteliers federation to ratchet up its attack on the non-hotel sector. They will be used by the government to justify more inspections of properties. It says there have been 3,000 such inspections since January. Aware of the need of the political support of the hoteliers, it will do whatever it can to try and demonstrate that it is acting tough.
But the government, and it knows it, cannot and will not eliminate illegal supply. As the level of non-hotel accommodation is as high as it apparently is, then the pragmatic route - one which the government steadfastly rejects - should be the one it adopts. Permissive regulation, therefore.
Catalonia, with its permissive regime, still faces a sizable problem with illegal accommodation. But having taken the decision to permit registration of the hundreds, thousands of properties that it has, it has also taken a very strict approach on accommodation which contravenes its regulation. So, it is permissive but also restrictive in an appropriate way. It has opened up the market to private property owners but it isn't about to tolerate the ingratitude of those owners who do not play by its perfectly reasonable rules. Unlike the Balearics, where tourism minister Martinez talks tough but where he presents little evidence as to what the consequence of the 3,000 inspections has been, in Catalonia it has processed under a half of the 284 actions it has so far taken against illegal properties. Till now it has realised a total of over half a million euros in fines.
Thursday, May 08, 2014
Stemming The Tide: P2P tourism
"We are not pretending that we can hold back this unstoppable tendency. It would be like trying to stem the tide. But we ask that there is regulation because it is big business."
These are words from a statement by Spain's national hotel federation (CEHAT). They are a coincidence. I used the tide analogy myself the other day. It was in the context of holiday lets and of the rise of P2P tourism, a phenomenon that, if you believe some commentators, threatens to overwhelm traditions in the tourism industry.
P2P, in its original internet incarnation, meant peer-to-peer and the sharing of computer files. In its tourism guise, it still means this, but it also means people-to-people. The internet is fundamental to its being. P2P websites act as intermediaries for putting customer in contact with supplier, tourist in touch with property owner. And the property could be anywhere and of any description. From a room in a flat to a villa, P2P can provide it.
The websites work on the basis of commissions on transactions. There are now many of them, but the first of them, and the best known, is Airbnb. On its site for Mallorca, there are more than 1,000 properties of various types. The growth in the number has been staggering. It could only have been a couple of years ago when I wrote about Airbnb and found that there were fewer than 50 properties.
P2P has helped to grow the number of foreigners renting tourist properties in Spain by an equally staggering amount: 44% in the past six years. While economic crisis has been cited as a reason for the rise in the number of properties being rented out, P2P, especially in the past two to three years, has been just as important. The size of the P2P market is growing so fast and is now so large that it is impossible to keep tabs on.
It is instructive to read the words of the national hoteliers. They are at least realistic in understanding the scale of P2P. They want regulation, but regulation is going to be extremely difficult. The very term "P2P" should offer a clue as to this difficulty. P2P has been with us for several years and it has been at the heart of illegal downloading and file sharing of music and films. Regulating this illegal activity has been and remains complex. Not all P2P rentals are illegal insofar as many properties will be registered with a local authority, but an awful lot are illegal. The Balearic government, which talks boldly about monitoring websites, hasn't a hope of stemming the tide. It may as well wise up, regulate apartments with its own legislation, and at least try and ensure some control.
Though authorities have had some success in curbing illegal downloading and in either banning, blocking or limiting the scope of websites, the P2P tourism sites aren't necessarily engaged in anything illegal. While the offer of a property may be illegal in one jurisdiction, it won't be in another. P2P is nigh on impossible to curb.
Nevertheless, efforts are being made, and Catalonia is to the fore in making them. This region, which has been pioneering in the way that it has regulated and permitted so many private apartments for tourism rental (there are some 200,000 different types of property now registered in Catalonia), is fully aware that, despite its permissiveness, there are still many property owners who want to flout the law. It is also aware of the problem posed by P2P. It has opened proceedings against 55 websites and works with the national government and the European Union in seeking some control of websites.
Those sites which argue that they are mere intermediaries and bear no responsibilities are, as far as Catalonia is concerned, contravening consumer and information laws in that they have to ensure that information is accurate and truthful, and an element of this is the provision of a property registration code issued by the Catalonian government. These codes are, by the way, also used in the Balearics, though not of course for apartments. If there isn't a code, then the property is deemed illegal.
P2P is seen within the tourism industry as being representative of a new generation of travellers who aren't interested in packaged tourism. The values system of the so-called Millenials has been much discussed, but is it really any different to previous generations? I have my doubts. But P2P does pose threats to traditional parts of the tourism industry. Travel agencies are clearly threatened, but then they need to embrace P2P, not fight it. By the same token, governments, such as the one in the Balearics, need to appreciate what P2P entails. This means control through local regulation, not bans. You can't hold back the tide.
These are words from a statement by Spain's national hotel federation (CEHAT). They are a coincidence. I used the tide analogy myself the other day. It was in the context of holiday lets and of the rise of P2P tourism, a phenomenon that, if you believe some commentators, threatens to overwhelm traditions in the tourism industry.
P2P, in its original internet incarnation, meant peer-to-peer and the sharing of computer files. In its tourism guise, it still means this, but it also means people-to-people. The internet is fundamental to its being. P2P websites act as intermediaries for putting customer in contact with supplier, tourist in touch with property owner. And the property could be anywhere and of any description. From a room in a flat to a villa, P2P can provide it.
The websites work on the basis of commissions on transactions. There are now many of them, but the first of them, and the best known, is Airbnb. On its site for Mallorca, there are more than 1,000 properties of various types. The growth in the number has been staggering. It could only have been a couple of years ago when I wrote about Airbnb and found that there were fewer than 50 properties.
P2P has helped to grow the number of foreigners renting tourist properties in Spain by an equally staggering amount: 44% in the past six years. While economic crisis has been cited as a reason for the rise in the number of properties being rented out, P2P, especially in the past two to three years, has been just as important. The size of the P2P market is growing so fast and is now so large that it is impossible to keep tabs on.
It is instructive to read the words of the national hoteliers. They are at least realistic in understanding the scale of P2P. They want regulation, but regulation is going to be extremely difficult. The very term "P2P" should offer a clue as to this difficulty. P2P has been with us for several years and it has been at the heart of illegal downloading and file sharing of music and films. Regulating this illegal activity has been and remains complex. Not all P2P rentals are illegal insofar as many properties will be registered with a local authority, but an awful lot are illegal. The Balearic government, which talks boldly about monitoring websites, hasn't a hope of stemming the tide. It may as well wise up, regulate apartments with its own legislation, and at least try and ensure some control.
Though authorities have had some success in curbing illegal downloading and in either banning, blocking or limiting the scope of websites, the P2P tourism sites aren't necessarily engaged in anything illegal. While the offer of a property may be illegal in one jurisdiction, it won't be in another. P2P is nigh on impossible to curb.
Nevertheless, efforts are being made, and Catalonia is to the fore in making them. This region, which has been pioneering in the way that it has regulated and permitted so many private apartments for tourism rental (there are some 200,000 different types of property now registered in Catalonia), is fully aware that, despite its permissiveness, there are still many property owners who want to flout the law. It is also aware of the problem posed by P2P. It has opened proceedings against 55 websites and works with the national government and the European Union in seeking some control of websites.
Those sites which argue that they are mere intermediaries and bear no responsibilities are, as far as Catalonia is concerned, contravening consumer and information laws in that they have to ensure that information is accurate and truthful, and an element of this is the provision of a property registration code issued by the Catalonian government. These codes are, by the way, also used in the Balearics, though not of course for apartments. If there isn't a code, then the property is deemed illegal.
P2P is seen within the tourism industry as being representative of a new generation of travellers who aren't interested in packaged tourism. The values system of the so-called Millenials has been much discussed, but is it really any different to previous generations? I have my doubts. But P2P does pose threats to traditional parts of the tourism industry. Travel agencies are clearly threatened, but then they need to embrace P2P, not fight it. By the same token, governments, such as the one in the Balearics, need to appreciate what P2P entails. This means control through local regulation, not bans. You can't hold back the tide.
Monday, May 05, 2014
Divorced From Reality: Holiday lets
I have the power of prophesy. A couple of weeks or so ago I wrote that "around this time of the year the Mallorca hoteliers federation leaps into propaganda action by issuing dire warnings about the consequences of the so-called illegal offer". And what do you know? They have leapt. I shouldn't be immodest. I don't have the power of prophesy. It is predictable and pathetically so.
Predictability has not been occurring in the Canary Islands which, those of you who are observant will have noticed, share certain things in common with the Balearics. Yes, they are islands. They are also remote and they also have a track record of taking a hard line against holiday lets. Their greater remoteness does place them on the European periphery, but nevertheless, I have been surprised at the almost total lack of attention that has been paid to the approval from the European Commission for there to be subsidies of landing fees for new routes to the islands. The Balearics aren't on the periphery in quite the same way, but their isolation causes the same issue of connectivity. Has anyone here been taking note of the Canaries' subsidies? Perhaps they have, but as these are paid by the regional government there, the one here would probably rather not know.
I have also been surprised at the fact that news that the regional government in the Canaries is edging towards legalising holiday lets has been given a similar lack of attention. There is a way to go, but the president of the Canaries, Paulino Rivero, is to meet representatives of something called the Plataforma para la Regulación del Alquiler Vacacional next week. The platform is encouraged, and the stance against holiday lets in the Canaries does appear to be softening in the face of a petition with more than 16,000 signatures and what has been a co-ordinated effort by the platform to publicise its cause.
If the Canaries were to go down the path of regulating holiday lets, the region would join three of the other four main "sun-and-beach" tourism regions in having some form of permissive regulation. Catalonia, Valencia and Andalusia all have systems of regulation. (Andalusia will actually approve its "decreto de viviendas de uso turístico" after the summer, but this is a formality.) The one other region, the Balearics, would therefore be on its own in having legislation which prohibits apartment holiday lets. It would be isolated. Remote.
When national government washed its hands of the whole holiday-rental issue and handed over responsibilities to the regions, it created even more confusion than had existed regarding a subject that was already crowded by confusion. In abrogating any responsibility, it acted in a manner totally contrary to its own tourism plan, one through which legislative harmony and standardisation was to be pursued. Pity the poor old tourist (as well property owner) who has to understand not one but several legislative systems in order to do something as simple as go on holiday.
Confusion, I think it fair to say, is a state that satisfies the tourism political class. It certainly appears to in the Balearics. Where the rental of apartments is concerned, the confusion has been made that much greater since the head of the Balearics estate agents association said recently that he understood that the tourism ministry would not be going around fining anyone for illegally renting out property this summer. Now, inevitably, we have the hoteliers engaging in their ritualistic, annual utterances of illegal-offer high dudgeon.
Confusion is one thing. Divorced from reality is another. In the Balearics, tourism politicians have long since given the impression of existing in an unreal other world (think PSOE's Celesti Alomar, for example), but now there are other realities that they flatly refuse to accept or, more likely, understand. The market for accommodation rental, and not just for holiday apartments, is being turned totally on its head because of the so-called P2P market, e.g. the likes of Airbnb. To insist on maintaining the outlawing of private apartment rental (in a transparent, regulated and properly commercialised fashion) is an attempt at holding back the waves, when instead the tide should be allowed to come in in an orderly and regulated fashion.
In other regions, they seem to understand this. They have sought to reduce the confusion, not add to it, and if the Canaries were to go the way of Andalusia and the others, then the Balearics would be shown up for what its tourism politicians have made it: out of step with reality and wholly subservient to the commands of the hoteliers. Possible changes in the Canaries are going unnoticed, because in the Balearics, they don't want attention being drawn to them. Well, I have. And for my next prophesy ...
Predictability has not been occurring in the Canary Islands which, those of you who are observant will have noticed, share certain things in common with the Balearics. Yes, they are islands. They are also remote and they also have a track record of taking a hard line against holiday lets. Their greater remoteness does place them on the European periphery, but nevertheless, I have been surprised at the almost total lack of attention that has been paid to the approval from the European Commission for there to be subsidies of landing fees for new routes to the islands. The Balearics aren't on the periphery in quite the same way, but their isolation causes the same issue of connectivity. Has anyone here been taking note of the Canaries' subsidies? Perhaps they have, but as these are paid by the regional government there, the one here would probably rather not know.
I have also been surprised at the fact that news that the regional government in the Canaries is edging towards legalising holiday lets has been given a similar lack of attention. There is a way to go, but the president of the Canaries, Paulino Rivero, is to meet representatives of something called the Plataforma para la Regulación del Alquiler Vacacional next week. The platform is encouraged, and the stance against holiday lets in the Canaries does appear to be softening in the face of a petition with more than 16,000 signatures and what has been a co-ordinated effort by the platform to publicise its cause.
If the Canaries were to go down the path of regulating holiday lets, the region would join three of the other four main "sun-and-beach" tourism regions in having some form of permissive regulation. Catalonia, Valencia and Andalusia all have systems of regulation. (Andalusia will actually approve its "decreto de viviendas de uso turístico" after the summer, but this is a formality.) The one other region, the Balearics, would therefore be on its own in having legislation which prohibits apartment holiday lets. It would be isolated. Remote.
When national government washed its hands of the whole holiday-rental issue and handed over responsibilities to the regions, it created even more confusion than had existed regarding a subject that was already crowded by confusion. In abrogating any responsibility, it acted in a manner totally contrary to its own tourism plan, one through which legislative harmony and standardisation was to be pursued. Pity the poor old tourist (as well property owner) who has to understand not one but several legislative systems in order to do something as simple as go on holiday.
Confusion, I think it fair to say, is a state that satisfies the tourism political class. It certainly appears to in the Balearics. Where the rental of apartments is concerned, the confusion has been made that much greater since the head of the Balearics estate agents association said recently that he understood that the tourism ministry would not be going around fining anyone for illegally renting out property this summer. Now, inevitably, we have the hoteliers engaging in their ritualistic, annual utterances of illegal-offer high dudgeon.
Confusion is one thing. Divorced from reality is another. In the Balearics, tourism politicians have long since given the impression of existing in an unreal other world (think PSOE's Celesti Alomar, for example), but now there are other realities that they flatly refuse to accept or, more likely, understand. The market for accommodation rental, and not just for holiday apartments, is being turned totally on its head because of the so-called P2P market, e.g. the likes of Airbnb. To insist on maintaining the outlawing of private apartment rental (in a transparent, regulated and properly commercialised fashion) is an attempt at holding back the waves, when instead the tide should be allowed to come in in an orderly and regulated fashion.
In other regions, they seem to understand this. They have sought to reduce the confusion, not add to it, and if the Canaries were to go the way of Andalusia and the others, then the Balearics would be shown up for what its tourism politicians have made it: out of step with reality and wholly subservient to the commands of the hoteliers. Possible changes in the Canaries are going unnoticed, because in the Balearics, they don't want attention being drawn to them. Well, I have. And for my next prophesy ...
Wednesday, October 30, 2013
Aragon's Solution For Tourist Apartments
This was a land that once upon a time had its own kingdom and more importantly crown. It was the Crown of Aragon under which Catalan-speaking regions - Catalonia, Valencia, the Balearics - were joined. It was a crown that was dismantled as a consequence of the War of the Spanish Succession and of the formation of a centralised and Castellano-speaking Spain.
Mallorca has a strong association with Aragon. It was Jaume I of Aragon who liberated Mallorca and the Balearics from their Islamic occupiers and Jaume who introduced Catalan to the islands. Yet despite its history, Aragon lacks things that Catalonia and the Balearics have. Politically and socially, there is not a strong Catalanism. Indeed there is only the one official language - Castellano - though there is a growing awareness of the Aragonese dialect. Economically, there is not a reliance on tourism. Aragon isn't terribly well known and it doesn't have a coastline.
Aragon is the fourth largest region of Spain but its population isn't vastly greater than that of the Balearics. It is a region dominated in its north and south by mountains. In its centre there is a semi-desert area. It was here that the Gran Scala, a tourism complex of hotels, casinos, theme parks and golf courses, was due to have been built. It won't be. In truth, it was probably never viable.
Gran Scala would, though, have placed Aragon on a tourism map in a way that it otherwise isn't. In its absence, the regional government set about initiating a plan for tourism earlier this year, one with the goal of forging a distinct identity and brand and with the intention of putting in place regulations for accommodation. Hotels, many of them in ski resorts, are one main aspect of this. The other is tourist apartments, otherwise known as holiday lets.
From a tourism point of view, Aragon is in no way comparable to Mallorca and the Balearics, but it shares one thing in common - a requirement to regulate the use of private accommodation for tourist use.
The legal reform by national government by which responsibility for regulation was farmed out to the regions was peculiar in one particular way. Nationally, residential tourism is considered to be a strength (it says so in the government's tourism plan). But Madrid was in an awkward position. It could not pass a law applicable nationwide because it knew full well that the strength it spoke of under the national plan drawn up a year before would have been compromised had it simply complied with the demands of the strongest hotel lobby groups, most obviously the one in the Balearics.
Instead, it placed regulatory onus on the regions, no doubt aware that some regions would institute legislation which did indeed compromise this "strength". The Balearics had already done so. Other regions, without similar laws to the Balearics, are now catching up, and one of them is Aragon.
The mere mention of "regulation" may be taken as implying a tightening-up and a restriction. But it doesn't have to. Tightening-up has occurred, as in Catalonia, in respect of standards, but regulation has meant permission not prohibition. Aragon's own law that regulates tourist apartments was passed on 22 October. It is a comprehensive piece of legislation but it is not overly proscriptive. Indeed, what it does is to establish four categories of apartment with specific requirements that have to be registered with the regional tourism ministry. And importantly, the Aragon law outlines minimum services that these apartments must have. This is important because, by comparison with the Balearics, as soon as services are offered here a private tourist apartment becomes in effect illegal.
It has been noted in a report by La Caixa bank that the level of tourist stays in unregulated apartments in Aragon is almost three times as great as those in regulated accommodation. The importance of these tourist apartments is therefore undeniable. And the Aragon government has recognised this importance.
Aragon is very different to Mallorca and so it has adopted regulation very different to Mallorca's. But it is regulation which goes to reinforce the incoherence and confusion that national government has brought about. Residential tourism is a strength but only if a particular region agrees that it is.
Wednesday, May 15, 2013
Now Customer Satisfaction Gets Illegal
I despair. Some of you may also despair. After you've read the following. Are you sitting uncomfortably? Then he shall begin, he being Ramón Estalella, the secretary-general of the Spanish Confederation of Hotels and Tourist Accommodation.
"We are not against people being free to rent out their properties. The thing we ask, though, is that, as with the tourist offer, these owners comply with the rules of the game as they apply to legislation and taxation, etc. in order that the greatest transparency and guarantees are given." This rental of property should be "a legal, transparent and controlled economic activity that contributes to the public purse".
"One of the problems created by this unregulated provision is customer dissatisfaction. As the rental arrangement is between private individuals, if any problem arises, no form of protest can be made. The image of Spanish tourist accommodation, number one in Europe in terms of its quality-to-price ratio, can therefore be seen to be damaged. This lack of transparency creates problems for everyone."
Sr. Estalella has gone on to say that the majority of owners who rent out private accommodation form part of the black economy because they do not declare income and commit social security fraud. He has added that the lower prices of these owners' properties represent enormous competition to the legal offer; not because of customer satisfaction but because of price.
So, here we are yet again. The slight difference this time round is that it is a Spanish hoteliers representative who is getting the retaliation in early against the so-called illegal offer and not a Mallorcan hoteliers representative. Never fear, the Mallorcan hoteliers won't have their lost their voice and won't be short of the spade-loads of hyperbole that were being chucked around last summer. The economy was "broken", they said, because hotel occupancy in high summer was going to be so dismal, and this was all down to those nasty inhabitants of the black economy. It turned out to be rubbish; July's occupancy had never been so good (this century at any rate).
I suppose one can argue that Sr. Estalella has moved the now-so-predictable arguments on a touch by bringing in the customer satisfaction thing. He would appear to know that there is a great deal of dissatisfaction, despite the fact, as he points out, that it is difficult for dissatisfied guests to make their complaints known. Perhaps he stops tourists on the streets of resorts and interrogates them.
In his defence, it is of course far easier for a hotel guest to complain and to go onto Trip Advisor and slag off a hotel. If all illegal accommodation is lousy, then it would definitely do harm. But what percentage of it are we talking about? Would the complaints outweigh complaints about hotels? Can it be said, in all instances, that hotel guest complaints are acted upon satisfactorily and that guests' experiences of hotels don't also do harm?
The latest round of let's-all-have-a-go-at-the-illegal-offer game is being played out against a background of reform to the tenancy act. This reform, so the unthinkingly pro-hotelier media in Mallorca has been telling us, will be the thing to make the rotten non-tax-paying owners finally get their just desserts. Perhaps it will also mean that tax-paying owners who have, remarkably enough, been declaring and paying tax, despite having allegedly illegal accommodation, will get what's coming to them as well.
I despair of all this not just because of the same old, damn points being made by the hoteliers but also because of the total confusion that surrounds the issue of the so-called illegal accommodation. And now, because of reform to the tenancy act, the Balearics may well have to pass another bloody law. I thought they'd already done this, but Will Besga, lawyer of this Mallorcan parish, who is far better positioned to know about law than I am, suggests that this will indeed be needed. And once it's passed, if it's passed, everything will be clear. Or probably not.
Though it has been generally assumed that the illegal offer is more of an issue in the Balearics (and the Canaries) than in other parts of Spain, the fact that a Spanish hotelier group is pronouncing on the subject shows that it isn't. And a reason for it having become more of a whole-Spain issue is that anything that smacks of not being legal is fair game in these times of crisis and austerity. Fair enough. Now then, how many hotels do you reckon pay at least some of their employees' wages in black?
Any comments to andrew@thealcudiaguide.com please.
"We are not against people being free to rent out their properties. The thing we ask, though, is that, as with the tourist offer, these owners comply with the rules of the game as they apply to legislation and taxation, etc. in order that the greatest transparency and guarantees are given." This rental of property should be "a legal, transparent and controlled economic activity that contributes to the public purse".
"One of the problems created by this unregulated provision is customer dissatisfaction. As the rental arrangement is between private individuals, if any problem arises, no form of protest can be made. The image of Spanish tourist accommodation, number one in Europe in terms of its quality-to-price ratio, can therefore be seen to be damaged. This lack of transparency creates problems for everyone."
Sr. Estalella has gone on to say that the majority of owners who rent out private accommodation form part of the black economy because they do not declare income and commit social security fraud. He has added that the lower prices of these owners' properties represent enormous competition to the legal offer; not because of customer satisfaction but because of price.
So, here we are yet again. The slight difference this time round is that it is a Spanish hoteliers representative who is getting the retaliation in early against the so-called illegal offer and not a Mallorcan hoteliers representative. Never fear, the Mallorcan hoteliers won't have their lost their voice and won't be short of the spade-loads of hyperbole that were being chucked around last summer. The economy was "broken", they said, because hotel occupancy in high summer was going to be so dismal, and this was all down to those nasty inhabitants of the black economy. It turned out to be rubbish; July's occupancy had never been so good (this century at any rate).
I suppose one can argue that Sr. Estalella has moved the now-so-predictable arguments on a touch by bringing in the customer satisfaction thing. He would appear to know that there is a great deal of dissatisfaction, despite the fact, as he points out, that it is difficult for dissatisfied guests to make their complaints known. Perhaps he stops tourists on the streets of resorts and interrogates them.
In his defence, it is of course far easier for a hotel guest to complain and to go onto Trip Advisor and slag off a hotel. If all illegal accommodation is lousy, then it would definitely do harm. But what percentage of it are we talking about? Would the complaints outweigh complaints about hotels? Can it be said, in all instances, that hotel guest complaints are acted upon satisfactorily and that guests' experiences of hotels don't also do harm?
The latest round of let's-all-have-a-go-at-the-illegal-offer game is being played out against a background of reform to the tenancy act. This reform, so the unthinkingly pro-hotelier media in Mallorca has been telling us, will be the thing to make the rotten non-tax-paying owners finally get their just desserts. Perhaps it will also mean that tax-paying owners who have, remarkably enough, been declaring and paying tax, despite having allegedly illegal accommodation, will get what's coming to them as well.
I despair of all this not just because of the same old, damn points being made by the hoteliers but also because of the total confusion that surrounds the issue of the so-called illegal accommodation. And now, because of reform to the tenancy act, the Balearics may well have to pass another bloody law. I thought they'd already done this, but Will Besga, lawyer of this Mallorcan parish, who is far better positioned to know about law than I am, suggests that this will indeed be needed. And once it's passed, if it's passed, everything will be clear. Or probably not.
Though it has been generally assumed that the illegal offer is more of an issue in the Balearics (and the Canaries) than in other parts of Spain, the fact that a Spanish hotelier group is pronouncing on the subject shows that it isn't. And a reason for it having become more of a whole-Spain issue is that anything that smacks of not being legal is fair game in these times of crisis and austerity. Fair enough. Now then, how many hotels do you reckon pay at least some of their employees' wages in black?
Any comments to andrew@thealcudiaguide.com please.
Saturday, September 08, 2012
Holiday Let Hysteria
(This article was asked for by "The Bulletin". It comes, as you will see, on the back of previous articles I have written on the holiday-let issue and following a meeting with some press by the hoteliers federation at which, so I am led to believe, some fairly odd things were said.)
The Majorcan hoteliers federation is hysterical. Not hysterical funny (though one could argue this to be the case) but hysterical uncontrolled. This uncontrolled hysteria stems from the lack of control of private accommodation for holiday rental and from the federation's propaganda war against the "oferta ilegal".
Let me be clear, I have no axe to grind with the federation, with any hotel chain or any hotel. I am full of admiration for the generally high standards of Majorca's hotel industry, for its innovation, for its contributions to the local economy and to employment, for the enhancement of Majorca's image through these standards and innovation and for the enhancement of Majorca's reputation overseas through the exporting of hotel know-how and ingenuity. I understand fully the investment that hotels need to make, the hoops they have to go through in terms of inspection and bureaucracy, the taxes they have to pay, the liabilities they have to assume.
I can accept that hotels are not the real villains of the piece when it comes to all-inclusive. Not all want to be all-inclusive but have had to bow to pressures that came initially from tour operators and now from a market that has grown used to requiring all-inclusive. I can accept that hotels are faced with an intolerable situation whereby their valuable real estate stands empty for much of the year, that their overall productivity is therefore diminished because of seasonality and that they have to maximise their returns in the summer season.
I have, therefore, sympathy as well as admiration and gratitude. Which is what makes my exasperation at the hoteliers' hysteria and crusade against the "oferta ilegal" that much greater, as it undoes all the goodwill that the hotels deserve and undermines all the good work that they undertake.
The week before last, I wrote a series of articles in which I took the hoteliers federation to task for what I consider to be misleading information and also took the local media to task for not querying the federation's information. On Friday this week, there was a further example of both, and the mere fact that the federation was once more ripping into the "oferta ilegal" led me to consider that it was becoming hysterical.
In "Ultima Hora" (sister newspaper of "The Bulletin"), a page was devoted to the federation's argument that economic crisis was fuelling further the supply of illegal accommodation because owners of second (holiday) homes were preferring to rent them out (illegally) rather than to stay in them. This conclusion, derived apparently from estate-agency sources and as a logical extension of increased passenger numbers passing through Palma airport, was used as further evidence of the unfair competition to the hotels and of owners avoiding paying tax. The report also stated, and I quote: "hotel occupancy has not benefited from this increase in the number of passengers in the airports".
However, and as I pointed out in those articles, July's occupancy was at a record level while August's was, at worst, about average. But occupancy figures are only part of the story; the full story is that tourists opt to stay in different types of accommodation and not only hotels.
What this report highlighted, yet again, was the fact that the level of tourism is such that it is way beyond the capabilities of the hotels to cater for it. And yet again, the obvious question was not being addressed. If Majorca (and the Balearics) want the number of tourists that the islands attract, where are they all meant to stay? They can't all stay in hotels because there are too few hotel places. This is a question I have asked on numerous occasions and one that writers of letters to this newspaper have also rightly asked.
The report also highlighted the narrative that surrounds the issue of the "oferta ilegal". A photo caption said: "Alcudia and Pollensa, the most affected zones". There is no loss in translation; affected implies a negative. The narrative, and one compounded by the local press, is that illegal is automatically wrong. Normally, I would agree, but illegal, in the case of holiday lets, is taken as a means of demonising not just of pointing out illegality. Moreover, its very use impedes querying. Illegal equals wrong equals must not question the hoteliers' point of view.
Key to tackling this illegality, so the report added, is a law on urban leases and key to its implementation in eradicating the "fraud" that is being committed is the collaboration of town halls. In fact, mayors have been brought on board by the regional government. The creation of a "mesa" (table) of mayors is intended, in part, to facilitate information gathering in the pursuit of illegal accommodation.
I wonder, however, what a mayor such as Pollensa's Tomeu Cifre makes of this. His town is the most affected zone; most affected by the crusade against private accommodation as holiday rental. And he tried unsuccessfully to get the government to shift on the issue when drafting the new tourism law. Cifre will know, as will mayors of other zones that are "most affected" (Alcúdia and Calvià), that businesses other than hotels have a great dependence upon tourism which is not hotel-based. When the overall level of all-inclusive occupancy on the island is around 30% or so (but much higher in certain resorts), this tourism is fundamental to local economies.
I understand that last week the president of the hoteliers federation met with members of the press and that the issue of the "oferta ilegal" came up. But why is it that the press insists, or seems to insist, on meeting only with the hoteliers? To take another of the "most affected" zones, Alcúdia, it was here that Acotur, the tourist businesses association, launched its campaign a few weeks ago against all-inclusives. Why not talk to Acotur and ask it what it thinks about the persecution of property owners who permit tourism that can compensate for loss of business as a consequence of all-inclusive? Why not talk to the association for holiday homes? Why not even talk to Jaime Martínez, the Balearics director-general of tourism? It was he who mainly drafted the new tourism law. Political figure he may be, but at least he should be able to give accurate information regarding the situation on holiday lets, unlike the hoteliers federation, as I understand that at that press meeting the federation was giving wrong information.
The hoteliers do have a case in opposing holiday lets. Not all private accommodation is of a high standard and some owners will, under any circumstance, try and avoid paying tax. But it's a Catch 22. Because the accommodation is deemed illegal and cannot be licensed, it cannot be inspected and it cannot be subject to tax, albeit there exists the truly absurd situation by which there are owners who declare and pay tax on property which is illegal. But the opposition takes no account of the reality, which is that to accommodate Majorca's tourists there has to be a substantial stock of property other than hotels. It is this key issue which is left up in the air, it is the key question which is never answered. Instead, there is the supply of wrong information, either deliberate or inadvertent, and the selectivity and manipulation of information. And this supply of information has now become hysterical.
Any comments to andrew@thealcudiaguide.com please.
The Majorcan hoteliers federation is hysterical. Not hysterical funny (though one could argue this to be the case) but hysterical uncontrolled. This uncontrolled hysteria stems from the lack of control of private accommodation for holiday rental and from the federation's propaganda war against the "oferta ilegal".
Let me be clear, I have no axe to grind with the federation, with any hotel chain or any hotel. I am full of admiration for the generally high standards of Majorca's hotel industry, for its innovation, for its contributions to the local economy and to employment, for the enhancement of Majorca's image through these standards and innovation and for the enhancement of Majorca's reputation overseas through the exporting of hotel know-how and ingenuity. I understand fully the investment that hotels need to make, the hoops they have to go through in terms of inspection and bureaucracy, the taxes they have to pay, the liabilities they have to assume.
I can accept that hotels are not the real villains of the piece when it comes to all-inclusive. Not all want to be all-inclusive but have had to bow to pressures that came initially from tour operators and now from a market that has grown used to requiring all-inclusive. I can accept that hotels are faced with an intolerable situation whereby their valuable real estate stands empty for much of the year, that their overall productivity is therefore diminished because of seasonality and that they have to maximise their returns in the summer season.
I have, therefore, sympathy as well as admiration and gratitude. Which is what makes my exasperation at the hoteliers' hysteria and crusade against the "oferta ilegal" that much greater, as it undoes all the goodwill that the hotels deserve and undermines all the good work that they undertake.
The week before last, I wrote a series of articles in which I took the hoteliers federation to task for what I consider to be misleading information and also took the local media to task for not querying the federation's information. On Friday this week, there was a further example of both, and the mere fact that the federation was once more ripping into the "oferta ilegal" led me to consider that it was becoming hysterical.
In "Ultima Hora" (sister newspaper of "The Bulletin"), a page was devoted to the federation's argument that economic crisis was fuelling further the supply of illegal accommodation because owners of second (holiday) homes were preferring to rent them out (illegally) rather than to stay in them. This conclusion, derived apparently from estate-agency sources and as a logical extension of increased passenger numbers passing through Palma airport, was used as further evidence of the unfair competition to the hotels and of owners avoiding paying tax. The report also stated, and I quote: "hotel occupancy has not benefited from this increase in the number of passengers in the airports".
However, and as I pointed out in those articles, July's occupancy was at a record level while August's was, at worst, about average. But occupancy figures are only part of the story; the full story is that tourists opt to stay in different types of accommodation and not only hotels.
What this report highlighted, yet again, was the fact that the level of tourism is such that it is way beyond the capabilities of the hotels to cater for it. And yet again, the obvious question was not being addressed. If Majorca (and the Balearics) want the number of tourists that the islands attract, where are they all meant to stay? They can't all stay in hotels because there are too few hotel places. This is a question I have asked on numerous occasions and one that writers of letters to this newspaper have also rightly asked.
The report also highlighted the narrative that surrounds the issue of the "oferta ilegal". A photo caption said: "Alcudia and Pollensa, the most affected zones". There is no loss in translation; affected implies a negative. The narrative, and one compounded by the local press, is that illegal is automatically wrong. Normally, I would agree, but illegal, in the case of holiday lets, is taken as a means of demonising not just of pointing out illegality. Moreover, its very use impedes querying. Illegal equals wrong equals must not question the hoteliers' point of view.
Key to tackling this illegality, so the report added, is a law on urban leases and key to its implementation in eradicating the "fraud" that is being committed is the collaboration of town halls. In fact, mayors have been brought on board by the regional government. The creation of a "mesa" (table) of mayors is intended, in part, to facilitate information gathering in the pursuit of illegal accommodation.
I wonder, however, what a mayor such as Pollensa's Tomeu Cifre makes of this. His town is the most affected zone; most affected by the crusade against private accommodation as holiday rental. And he tried unsuccessfully to get the government to shift on the issue when drafting the new tourism law. Cifre will know, as will mayors of other zones that are "most affected" (Alcúdia and Calvià), that businesses other than hotels have a great dependence upon tourism which is not hotel-based. When the overall level of all-inclusive occupancy on the island is around 30% or so (but much higher in certain resorts), this tourism is fundamental to local economies.
I understand that last week the president of the hoteliers federation met with members of the press and that the issue of the "oferta ilegal" came up. But why is it that the press insists, or seems to insist, on meeting only with the hoteliers? To take another of the "most affected" zones, Alcúdia, it was here that Acotur, the tourist businesses association, launched its campaign a few weeks ago against all-inclusives. Why not talk to Acotur and ask it what it thinks about the persecution of property owners who permit tourism that can compensate for loss of business as a consequence of all-inclusive? Why not talk to the association for holiday homes? Why not even talk to Jaime Martínez, the Balearics director-general of tourism? It was he who mainly drafted the new tourism law. Political figure he may be, but at least he should be able to give accurate information regarding the situation on holiday lets, unlike the hoteliers federation, as I understand that at that press meeting the federation was giving wrong information.
The hoteliers do have a case in opposing holiday lets. Not all private accommodation is of a high standard and some owners will, under any circumstance, try and avoid paying tax. But it's a Catch 22. Because the accommodation is deemed illegal and cannot be licensed, it cannot be inspected and it cannot be subject to tax, albeit there exists the truly absurd situation by which there are owners who declare and pay tax on property which is illegal. But the opposition takes no account of the reality, which is that to accommodate Majorca's tourists there has to be a substantial stock of property other than hotels. It is this key issue which is left up in the air, it is the key question which is never answered. Instead, there is the supply of wrong information, either deliberate or inadvertent, and the selectivity and manipulation of information. And this supply of information has now become hysterical.
Any comments to andrew@thealcudiaguide.com please.
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