So, after all the talk, the new tourism minister for the Balearics is indeed a professional. A professional politician. Regardless of whatever agreement Carlos Delgado and José Ramón Bauzá are meant to have cooked up at the time of the Partido Popular leadership election in 2010, for Delgado not to have been named as tourism minister would have raised serious questions as to unity within the PP; the unity of the party's right-wing that is.
Bauzá could not have afforded not to have appointed Delgado to tourism. But despite the politicking behind the appointment, Bauzá may well have chosen wisely, even though one suspects his hands were tied.
The good thing about Delgado is that you know what you are getting. He has been clear and honest enough about his ambitions and his attitudes. Some of his pronouncements on matters unrelated to tourism have caused disquiet, most obviously the language thing, but on tourism his instincts seem entirely appropriate and forward-thinking.
The surprise has been, therefore, why there was opposition to his appointment. This surfaced in March when he spoke about his ambition to be tourism minister, and it came from hoteliers. The fear then was that Delgado would clash with the hoteliers, though it was never made clear as to quite why, which led to a conclusion that it was largely personal.
The appointment made, the hoteliers, in the form of the Mallorcan hotel federation, have now come out and said that they look upon the appointment very positively. But the federation always says this. It had plenty of opportunity to do so while the tourism ministry door was revolving during the Antich administration; whether it believed what it was saying or not. It's known as being diplomatic.
One of Mallorca's leading hoteliers, Gabriel Escarrer, the president of Meliá Hotels International, has issued a glowing assessment of Delgado. The right noises are being made, therefore, but behind them you wonder as to the degree to which they are designed to influence Delgado. He has a reputation of being his own man, and there is one issue, barely mentioned in despatches at present, that the good free-marketer Delgado will have to contend with - that of the confusion surrounding the holiday-let industry and the hoteliers' hostility towards it.
This aside, most of what Delgado has said and is saying should be music to the ears of the hoteliers and others in the tourism industry. Creating theme parks, allowing for condohotels, reducing IVA; they are all positive. But his market liberalism has not played well with everyone. His declaration that he will make the general tourism law more flexible in order to permit concerts at hotels is a clear shot across the bows of Acotur, the tourist business association, and others that have opposed the Mallorca Rocks hotel in Magalluf, and a pop also at the association's hounding of Calvia town hall for having granted the hotel licences for the concerts.
The controversy that has surrounded Mallorca Rocks is symbolic of what Delgado represents. Market conservatism is not a concept he adheres to. Acotur has brought criticism upon itself by opposing innovation and new business; it has cast itself as being reactionary and the defender of the status quo. If Delgado can break the shackles of such conservatism and vested interests, then he could well prove to be the tourism minister that Mallorca has been crying out for.
Much is being made of the fact that Delgado, as former mayor of Calvia, is the right man for the job because he has been mayor of a municipality with such a strong tourism economy. The argument doesn't necessarily follow. When Miguel Ferrer, the then mayor of Alcúdia, became tourism minister, the same thing was said. This smacked of a rationalisation for an appointment that owed more to Buggins's turn than to credentials for the job. Delgado is different in that he has been intimately involved with Calvia's tourism in a way that Ferrer wasn't in Alcúdia, but what actually has he done? PSOE, for instance, suggests that tourism initiatives in the town have been non-existent.
And this is the worry with Delgado. For all his instincts, for all his pronouncements, for all his challenge to forces of market illiberalism and for all his new best friends among the hoteliers, does his publicity outweigh the reality? We are about to find out.
Any comments to andrew@thealcudiaguide.com please.
Showing posts with label Hotel federation. Show all posts
Showing posts with label Hotel federation. Show all posts
Saturday, June 18, 2011
Wednesday, January 12, 2011
More Stars In Their Eyes: Hotels' strategy
Mallorca's hotel federation has pronounced once more. Ahead of the local elections, it has sent out a clear message to the to-be-newly elected that "bold and strategic" measures need to be adopted to tackle the island's tourism.
Bold and strategic. Fine words. The question is whether there is anyone capable of being bold or acting strategically. Don't bank on the political classes offering such a paragon of tourism virtue. They don't have a great track record in doing so.
The federation has identified a fundamental problem with Mallorca's tourism. Or perhaps they have borrowed it. The federation says that over the period 2000 to 2008 the number of tourists increased by nearly 22% yet the level of revenue generated went up by a mere 2.3%. Where have we heard something similar? Ah yes, the other day. Dr. Ivan Murray and his findings on the diminishing returns of tourism since 2003.
The solution, says the federation, is for there to be ever more tourists, the trouble with this being that at the current rates of growth it makes little sense. If revenue goes up only slightly, but the number of tourists increases dramatically, then how can there be a benefit? In order for there to be so, the federation believes in the replacement of obsolete accommodation by superior-grade hotels which would result in greater revenues. As an indication of what it is referring to, you need look no further than the situation in Calvia. Seven out of ten hotels in the municipality are 35 years or older, and three-quarters of the places in the hotels are between one and three-star.
Grand plans for the regeneration of Mallorca's hotels and tourism are nothing new. If you go back to the 80s and then into the 90s, plans were popping up from drawing-boards on an almost annual basis. One of the first was the "decreto Cladera" of 1984 that determined the square meterage per one tourism bed. Later there was the "plan for tourism resort embellishment" (making resorts looks prettier in other words). Then there was Ecomost, which sought to establish the limit as to the number of tourists; the "D" Plan of 1997 to address seasonality; the hotel accommodation modernisation plan of the 90s under which hotels could have been closed down if they did not comply with upgrades (and many managed to somehow slip through the net); the modernisation of complementary supply (bars and restaurants) of 1996.
What all these had in common was that they were drawn up in a period before the onset of the new competition from the eastern Mediterranean. Then the new century began and brought in what we now discover, that, for all those plans, the number of tourists has increased but the money they bring in has barely increased at all.
And of these plans, notably the hotel modernisation plan and that for tackling seasonality, were particularly unsuccesful. Furthermore, they both prove that there is nothing new under the sun, as they are but two issues that plague Mallorca's ability to operate in the far more competitive tourism market of today.
Nevertheless, the hotels seem determined to modernise, which is fine, but then what? If this results in higher-grade all-inclusives, then not a great deal. It may lead to an increase in revenue, but revenue for whom? As we know from the idiotic tourism spend statistics, the gearing is towards revenue generated by aspects of the tourism offer which filter only indirectly into the wider economy; it is that on accommodation, the holiday package itself and transport.
More fundamentally though, the desire, the need to increase the number of tourists raises enormous questions as to the capacity-carrying ability of the island (whether it has the resources to support increases), as to possible further building developments (for the most part restricted by planning laws) and as to where the tourists will come from. The new markets, Russia and so on, are going to have to be pursued with considerable vigour.
Getting more tourists cannot be just about adding more during the summer. There has to be a limit to the number of tourists which can be catered for during the summer months. Moreover, creating plusher hotels adds to the current absurdity of so many of them being unproductive for such lengthy periods. Which brings in the question of seasonality. And it is here, more than anything, that an ability to deliver on a strategy, let alone develop one, is exposed.
You can go back further than that "D" Plan of 1997. In the 1980s they were planning the development of "winter products". Guess what they were. You're right: cycling, golf, culture.
The point is that when it comes to being bold and strategic, we've been here before. Several times. And it amounted to very little, even in the days before Turkey, Croatia and Egypt became the threats they now are. You wouldn't count on it being any better this time round.
Any comments to andrew@thealcudiaguide.com please.
Bold and strategic. Fine words. The question is whether there is anyone capable of being bold or acting strategically. Don't bank on the political classes offering such a paragon of tourism virtue. They don't have a great track record in doing so.
The federation has identified a fundamental problem with Mallorca's tourism. Or perhaps they have borrowed it. The federation says that over the period 2000 to 2008 the number of tourists increased by nearly 22% yet the level of revenue generated went up by a mere 2.3%. Where have we heard something similar? Ah yes, the other day. Dr. Ivan Murray and his findings on the diminishing returns of tourism since 2003.
The solution, says the federation, is for there to be ever more tourists, the trouble with this being that at the current rates of growth it makes little sense. If revenue goes up only slightly, but the number of tourists increases dramatically, then how can there be a benefit? In order for there to be so, the federation believes in the replacement of obsolete accommodation by superior-grade hotels which would result in greater revenues. As an indication of what it is referring to, you need look no further than the situation in Calvia. Seven out of ten hotels in the municipality are 35 years or older, and three-quarters of the places in the hotels are between one and three-star.
Grand plans for the regeneration of Mallorca's hotels and tourism are nothing new. If you go back to the 80s and then into the 90s, plans were popping up from drawing-boards on an almost annual basis. One of the first was the "decreto Cladera" of 1984 that determined the square meterage per one tourism bed. Later there was the "plan for tourism resort embellishment" (making resorts looks prettier in other words). Then there was Ecomost, which sought to establish the limit as to the number of tourists; the "D" Plan of 1997 to address seasonality; the hotel accommodation modernisation plan of the 90s under which hotels could have been closed down if they did not comply with upgrades (and many managed to somehow slip through the net); the modernisation of complementary supply (bars and restaurants) of 1996.
What all these had in common was that they were drawn up in a period before the onset of the new competition from the eastern Mediterranean. Then the new century began and brought in what we now discover, that, for all those plans, the number of tourists has increased but the money they bring in has barely increased at all.
And of these plans, notably the hotel modernisation plan and that for tackling seasonality, were particularly unsuccesful. Furthermore, they both prove that there is nothing new under the sun, as they are but two issues that plague Mallorca's ability to operate in the far more competitive tourism market of today.
Nevertheless, the hotels seem determined to modernise, which is fine, but then what? If this results in higher-grade all-inclusives, then not a great deal. It may lead to an increase in revenue, but revenue for whom? As we know from the idiotic tourism spend statistics, the gearing is towards revenue generated by aspects of the tourism offer which filter only indirectly into the wider economy; it is that on accommodation, the holiday package itself and transport.
More fundamentally though, the desire, the need to increase the number of tourists raises enormous questions as to the capacity-carrying ability of the island (whether it has the resources to support increases), as to possible further building developments (for the most part restricted by planning laws) and as to where the tourists will come from. The new markets, Russia and so on, are going to have to be pursued with considerable vigour.
Getting more tourists cannot be just about adding more during the summer. There has to be a limit to the number of tourists which can be catered for during the summer months. Moreover, creating plusher hotels adds to the current absurdity of so many of them being unproductive for such lengthy periods. Which brings in the question of seasonality. And it is here, more than anything, that an ability to deliver on a strategy, let alone develop one, is exposed.
You can go back further than that "D" Plan of 1997. In the 1980s they were planning the development of "winter products". Guess what they were. You're right: cycling, golf, culture.
The point is that when it comes to being bold and strategic, we've been here before. Several times. And it amounted to very little, even in the days before Turkey, Croatia and Egypt became the threats they now are. You wouldn't count on it being any better this time round.
Any comments to andrew@thealcudiaguide.com please.
Thursday, December 16, 2010
Cutting Down To Size: Tourism strategy
The rarity with which anyone in the tourism industry utters some common sense demands that, when it is uttered, attention should be paid. The president of the Mallorcan Hoteliers Federation, as reported in "The Bulletin" (15 December), has called for the elimination of obsolete tourism accommodation and for the avoidance of duplication in tourism promotion. The federation is drawing up a strategic plan in which both these aspects feature. Praise be that someone, anyone, might apply some strategic thinking to Mallorca's tourism.
Without spelling it out in so many words, the logic of the federation's wish to eliminate outdated hotels and to regenerate tourism areas is that there would be a reduction in the number of hotels. This might sound like turkeys proposing and then voting firmly in favour of Christmas, but the hotels are suffering from a lack of stuffing and from what there is, which is all onion and no sage. The wisdom of chasing numbers at the expense of profitability has been exposed as being as pointless as filling the Christmas plate with Brussels sprouts no one wants; the trimmings need to be cut and made more edible.
The words of the federation's president deserve to be slowly chewed over and digested. "The problem with the approach to the tourist industry ... is that hoteliers, backed by the regional government, (have) been too keen on getting large numbers to the islands without creating a proper pricing structure". There are too many hotels, there is too much supply and there are relatively too high a number of tourists that generate insufficient revenue.
It's a drum that I seem to have been banging for an age. Perhaps the penny is dropping along with the profitability that goes with a percentage of tourism which is worth very little or nothing at all. The case for a strategy based on lower numbers, on improved quality of hotel and on a higher-worth tourist seems overwhelming.
What this doesn't mean is an end to mass tourism. It would be folly were it to. What it does mean is an altogether sharper focus on tourism which is less like a social service and more one of excellent service for a more demanding tourist.
It is a strategy that is not without its problems. Eliminating obsolete hotel stock and not replacing it requires a means of compensation, which is why the hoteliers have previously called for legal means by which hotels can be pulled. Upgrading stock means more than just the limited provisions of the "decreto Nadal"; it means fewer bureaucratic hoops through which hotels have to jump in order to re-develop and also means integrated approaches to resort development of the sort that has collapsed in Playa de Palma.
It is a strategy that also requires the government to rid itself of its obsession with numbers. Who cares if Mallorca slips down the tourism numbers league table. The goal difference in terms of tourism value is far more important than what's shown in the points column, that of tourism volume. Inevitably though, fewer tourists mean fewer employees; that is a political obstacle.
Another is fewer passengers passing through the airport. Central government may have inadvertently hit upon a solution. By proposing the privatisation of airports, the central government has shifted the goalposts of co-management of Palma airport by the regional government which is now up in arms at the suggestion, so long has it sought its share of the management and of the revenue that would go with it. One of the determinants of this co-management was that defined levels of passenger traffic should be achieved. Privatisation would put an end to this need, as co-management would be kicked into touch. What it wouldn't do necessarily is put an end to the need for numbers passing through the airport; landing, handling charges and so on would remain paramount for private operators.
Despite the obstacles, the hoteliers federation is right, but whether its strategy can resolve the apparent incompatibility between the numbers and the right sort of tourism (which is the incompatibility as things stand), who can tell.
The federation is also right when it comes to duplication of tourism promotion. Why are both the government and the Council of Mallorca involved in this? The Council now has more responsibilities for administering tourism, so why not just hand it the whole tourism responsibility? There again, why was this administration responsibility transferred from regional government? What really is the point of the Council of Mallorca when it comes to tourism promotion or indeed anything?
That it takes the private sector in the form of the hoteliers to try and drive strategy is telling. The government has failed to do so. A succession of tourism ministers have failed. One of them, Ferrer, did at least speak of the need for "boldness" when he assumed office, but he had no opportunity to demonstrate what this meant, as he was out of office in under two months. Otherwise, the words of the tourism ministry have too often trotted out the mantra of "alternative" tourism (gastronomy, culture, blah, blah) to the point at which you despair of it ever getting to grips with the fundamentals of summer tourism. A strategy? Yep, it would be nice.
Any comments to andrew@thealcudiaguide.com please.
Without spelling it out in so many words, the logic of the federation's wish to eliminate outdated hotels and to regenerate tourism areas is that there would be a reduction in the number of hotels. This might sound like turkeys proposing and then voting firmly in favour of Christmas, but the hotels are suffering from a lack of stuffing and from what there is, which is all onion and no sage. The wisdom of chasing numbers at the expense of profitability has been exposed as being as pointless as filling the Christmas plate with Brussels sprouts no one wants; the trimmings need to be cut and made more edible.
The words of the federation's president deserve to be slowly chewed over and digested. "The problem with the approach to the tourist industry ... is that hoteliers, backed by the regional government, (have) been too keen on getting large numbers to the islands without creating a proper pricing structure". There are too many hotels, there is too much supply and there are relatively too high a number of tourists that generate insufficient revenue.
It's a drum that I seem to have been banging for an age. Perhaps the penny is dropping along with the profitability that goes with a percentage of tourism which is worth very little or nothing at all. The case for a strategy based on lower numbers, on improved quality of hotel and on a higher-worth tourist seems overwhelming.
What this doesn't mean is an end to mass tourism. It would be folly were it to. What it does mean is an altogether sharper focus on tourism which is less like a social service and more one of excellent service for a more demanding tourist.
It is a strategy that is not without its problems. Eliminating obsolete hotel stock and not replacing it requires a means of compensation, which is why the hoteliers have previously called for legal means by which hotels can be pulled. Upgrading stock means more than just the limited provisions of the "decreto Nadal"; it means fewer bureaucratic hoops through which hotels have to jump in order to re-develop and also means integrated approaches to resort development of the sort that has collapsed in Playa de Palma.
It is a strategy that also requires the government to rid itself of its obsession with numbers. Who cares if Mallorca slips down the tourism numbers league table. The goal difference in terms of tourism value is far more important than what's shown in the points column, that of tourism volume. Inevitably though, fewer tourists mean fewer employees; that is a political obstacle.
Another is fewer passengers passing through the airport. Central government may have inadvertently hit upon a solution. By proposing the privatisation of airports, the central government has shifted the goalposts of co-management of Palma airport by the regional government which is now up in arms at the suggestion, so long has it sought its share of the management and of the revenue that would go with it. One of the determinants of this co-management was that defined levels of passenger traffic should be achieved. Privatisation would put an end to this need, as co-management would be kicked into touch. What it wouldn't do necessarily is put an end to the need for numbers passing through the airport; landing, handling charges and so on would remain paramount for private operators.
Despite the obstacles, the hoteliers federation is right, but whether its strategy can resolve the apparent incompatibility between the numbers and the right sort of tourism (which is the incompatibility as things stand), who can tell.
The federation is also right when it comes to duplication of tourism promotion. Why are both the government and the Council of Mallorca involved in this? The Council now has more responsibilities for administering tourism, so why not just hand it the whole tourism responsibility? There again, why was this administration responsibility transferred from regional government? What really is the point of the Council of Mallorca when it comes to tourism promotion or indeed anything?
That it takes the private sector in the form of the hoteliers to try and drive strategy is telling. The government has failed to do so. A succession of tourism ministers have failed. One of them, Ferrer, did at least speak of the need for "boldness" when he assumed office, but he had no opportunity to demonstrate what this meant, as he was out of office in under two months. Otherwise, the words of the tourism ministry have too often trotted out the mantra of "alternative" tourism (gastronomy, culture, blah, blah) to the point at which you despair of it ever getting to grips with the fundamentals of summer tourism. A strategy? Yep, it would be nice.
Any comments to andrew@thealcudiaguide.com please.
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