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.
Showing posts with label Incentives. Show all posts
Showing posts with label Incentives. Show all posts
Monday, December 08, 2014
Saturday, December 07, 2013
Tax Incentives For Hotels Opening All Year?
The Spanish Confederation of Hotels and Tourist Accommodation (CEHAT) held its last meeting of the year this week in Madrid. One of the main topics for discussion was the old - very old - chestnut of seasonality. Solutions that the meeting raised included those which are as old as the problems posed by seasonality, ones that are of a financial (tax) nature.
The headlining suggestion from the meeting was that the super-reduced rate of IVA (VAT) should be applied to those hotels which stay open all year, meaning that it would only be 4%. It is believed that this reduction would have a direct effect in increasing revenues.
Playing around with tax has been spoken about for so long and the debilitating effect of seasonality has existed for so long that it seems astonishing that there haven't been measures adopted which might give tax breaks and so incentivise hotel openings. In fact, certain local authorities have brought in tax breaks for those taxes which they have responsibility for. In Marbella, hotels will be credited with 50% of their business tax if they stay open. In Almeria, both business and property tax will be reduced.
Marbella and Almeria are in Andalusia, a region of Spain which attracts greater numbers of off-season tourists than most others. As an example, it receives seven times the number of golf tourists who visit the Balearics. Despite this greater number, Andalusia is and has been mightily concerned about the impact of seasonality. In October, the region's tourism minister met with business and unions in arriving at an agreement for incentives for hotels to stay open. The incentives have yet to be fully worked out, but the very fact that various parties have got together in order to come to an agreement in principle contrasts greatly with the situation in the Balearics. In Andalusia, where the problem of seasonality is less acute, they nevertheless are looking to do something about the problem. There's a lesson here for the Balearics.
Represented at the meeting this week was HOSBEC, the hotel association for Benidorm and the Costa Blanca. Benidorm, widely believed to be a destination that has something approximating to a genuine winter season, has witnessed a decline in this seasonal tourism over the past few years, but this November hotel occupancy in Benidorm was 79%, up by 8.5% over the same month in 2012. In the second half of November, overnight stays by Spanish guests rose by a staggering 42%.
Benidorm does benefit from national tourism in the off-season and most of what it was receiving in November was from the "seniors" market, but the figures for November indicate what can be achievable. HOSBEC, looking to develop on this success, has added to the call for incentives. It wants social security payments to be deferred for hotels which keep open.
Both the Costa Blanca and Andalusia have advantages which Mallorca and the Balearics do not. They are easier to get to for both national and international travellers. There are, for example, that many more international flights, partly a reflection of the existence of much larger populations of foreign nationals (British for instance). But both are looking to be proactive in bringing more off-season tourists and in introducing or pressing for incentives. The Mallorcan hoteliers have spoken about incentives as well, but a key difference is that, where there is talk in Mallorca, in other parts of Spain, they get on and actually do something.
And there is a way in which HOSBEC differs to Mallorca. It, and CEHAT appears to side with it on this one, wants to establish a uniform system of private tourist accommodation, drawing on the experiences in Catalonia and work done there by, yes, the Barcelona Hotel Association. Totally unlike the Balearics, the hoteliers have worked with the private owners to arrive at a system which has now been launched that categorises private accommodation (including and especially apartments) according to a key system. HOSBEC and CEHAT refer to the need to eradicate illegal accommodation, but both appear to accept the sense of there being a properly regulated and marketed private accommodation sector. Again, there should be a lesson here for the Balearics, but of course there almost certainly won't be.
The Catalonian categorisation, were it to be more widely adopted, would in fact fall in line with what the national government had foreseen in its national tourism plan, namely more standardisation of accommodation types and classification. It might, therefore, become a national standard, except that it wouldn't be national, not while the obstinacy of the regional government and hoteliers in the Balearics remains as it is.
The headlining suggestion from the meeting was that the super-reduced rate of IVA (VAT) should be applied to those hotels which stay open all year, meaning that it would only be 4%. It is believed that this reduction would have a direct effect in increasing revenues.
Playing around with tax has been spoken about for so long and the debilitating effect of seasonality has existed for so long that it seems astonishing that there haven't been measures adopted which might give tax breaks and so incentivise hotel openings. In fact, certain local authorities have brought in tax breaks for those taxes which they have responsibility for. In Marbella, hotels will be credited with 50% of their business tax if they stay open. In Almeria, both business and property tax will be reduced.
Marbella and Almeria are in Andalusia, a region of Spain which attracts greater numbers of off-season tourists than most others. As an example, it receives seven times the number of golf tourists who visit the Balearics. Despite this greater number, Andalusia is and has been mightily concerned about the impact of seasonality. In October, the region's tourism minister met with business and unions in arriving at an agreement for incentives for hotels to stay open. The incentives have yet to be fully worked out, but the very fact that various parties have got together in order to come to an agreement in principle contrasts greatly with the situation in the Balearics. In Andalusia, where the problem of seasonality is less acute, they nevertheless are looking to do something about the problem. There's a lesson here for the Balearics.
Represented at the meeting this week was HOSBEC, the hotel association for Benidorm and the Costa Blanca. Benidorm, widely believed to be a destination that has something approximating to a genuine winter season, has witnessed a decline in this seasonal tourism over the past few years, but this November hotel occupancy in Benidorm was 79%, up by 8.5% over the same month in 2012. In the second half of November, overnight stays by Spanish guests rose by a staggering 42%.
Benidorm does benefit from national tourism in the off-season and most of what it was receiving in November was from the "seniors" market, but the figures for November indicate what can be achievable. HOSBEC, looking to develop on this success, has added to the call for incentives. It wants social security payments to be deferred for hotels which keep open.
Both the Costa Blanca and Andalusia have advantages which Mallorca and the Balearics do not. They are easier to get to for both national and international travellers. There are, for example, that many more international flights, partly a reflection of the existence of much larger populations of foreign nationals (British for instance). But both are looking to be proactive in bringing more off-season tourists and in introducing or pressing for incentives. The Mallorcan hoteliers have spoken about incentives as well, but a key difference is that, where there is talk in Mallorca, in other parts of Spain, they get on and actually do something.
And there is a way in which HOSBEC differs to Mallorca. It, and CEHAT appears to side with it on this one, wants to establish a uniform system of private tourist accommodation, drawing on the experiences in Catalonia and work done there by, yes, the Barcelona Hotel Association. Totally unlike the Balearics, the hoteliers have worked with the private owners to arrive at a system which has now been launched that categorises private accommodation (including and especially apartments) according to a key system. HOSBEC and CEHAT refer to the need to eradicate illegal accommodation, but both appear to accept the sense of there being a properly regulated and marketed private accommodation sector. Again, there should be a lesson here for the Balearics, but of course there almost certainly won't be.
The Catalonian categorisation, were it to be more widely adopted, would in fact fall in line with what the national government had foreseen in its national tourism plan, namely more standardisation of accommodation types and classification. It might, therefore, become a national standard, except that it wouldn't be national, not while the obstinacy of the regional government and hoteliers in the Balearics remains as it is.
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