There was a family photo the other evening. A sort of family. One, as can be the case with other families, which has divisions. This was the tourist family. Just a small part of it. There was a birthday party. Forty years ago, the Federación Empresarial Hotelera de Mallorca arrived kicking and screaming into this world. The Mallorca Hoteliers Federation has been screaming ever since. The newly born grew to be tall and strong. The tallest and strongest of them all. The most powerful federation of hoteliers in the nation.
In the photo, there in the second row of this frequently fractious family were Inma Benito, the federation's president, and Biel Barceló, the tourism minister. They were shoulder to shoulder, whereas typically they have been face to face in argumentation or back to back in rejection. She wore dark, he wore white but seemingly with a black tie. Was it really a birthday party?
Among those in the front row was Josep Forteza Rey. Over a year ago, he had appeared in another photo. There was a seminar to discuss tourist "saturation". Two to his right was Jaume Garau, Barceló's guru, now excommunicated by Barceló's party. He most certainly didn't attend the birthday party, though in spirit he might have done. The tourist family - the government's politicians and the hoteliers at any rate - have been setting aside their differences in making common cause over holiday rentals.
Forty years on, and the battles that the hoteliers federation has are numerous and varied. Some they go in search of, others are foist upon them. Tourist tax, false compensation claims, the rate of IVA (VAT), regulations on building work, other regulations that can impact negatively on investment, holiday rentals; here are just some. Consider the list of matters in the hoteliers' in-tray. They are to do with tax, with finance, with labour, with housing, with international law in the sense of another country's "bad legislation" (UK law re claims). At a higher level they are concerned with strategy. This is a federation that is a mini-government. Or it can seem as though it is a political party, with representatives shadowing government ministers - Barceló, Pons (housing and transport), Negueruela (employment), Cladera (finance).
Forteza Rey had led the battle forty years ago. Hoteliers in Mallorca were fed up. They needed to be set loose from the Francoist inheritance of tourism organisation. While the politicians and intellectuals drafted the new constitution, while politics and society were struggling with the incipient democracy and with the process of transition, the hoteliers (political to the core) were effecting their own transition. From a meeting in Madrid with the secretary-of-state for tourism, Ignacio Aguirre Borrel, came the means for a pioneering transition. The federation was soon born. Long live the federation.
Its first president was Miguel Codolá. He formed an alliance with the emerging powerful hotelier families - Barceló (nothing to do with the current tourism minister), Escarrer, who have been performing the contemporary transitions of resorts in the name of Meliá, which was not the name in 1977, and subsequently Fluxá, with the stellar quality of Iberostar. But Codolá was egalitarian. There had to be space for the smaller chains. The early federation therefore reflected interests in the different resorts, where less powerful families had established their local business - the likes of Luna in Playa de Muro (the Esperanza complex) or Vilaire in Alcudia, where Narciso Vilaire had founded the Hotel Bahia de Alcudia and was to be a co-founder of the Alcudiamar marina.
Codolá's deftness in drawing together the great and the less great within the framework of the hoteliers' branch of the tourist industry family was to be lost along the way. The great grew greater. By 2014, there was discontent. They were falling out. The small chains felt that the management of the federation, with Iberostar firmly at the controls, was not representing their interests sufficiently, albeit they were diplomatic enough to praise the work of the then president, Aurelio Vázquez of Iberostar. Forteza Rey took up a battle anew. "The small and medium-sized hoteliers have the right to express their opinions within the federation."
One doesn't hear much about such discontent now. Perhaps it's Inma Benito's management. Perhaps it has to do with the various battles that she is fighting on all their behalves. Perhaps it is because of another challenge, one that all the hoteliers share. The more left-wing politicians take aim at the giant hoteliers, at their presidents who appear on the Forbes rich list, at their overseas developments, at their Panama Papers. But all hoteliers are somehow caught in this web of opprobrium, which spills over into a societal condemnation of greed. Outside the broad tourist industry and to an extent within it, the federation's 40th birthday has not been met with a unanimous chorus of "cumpleaños feliz".
Showing posts with label Mallorca hoteliers federation. Show all posts
Showing posts with label Mallorca hoteliers federation. Show all posts
Friday, June 09, 2017
Saturday, March 04, 2017
Appealing Against The Tourist Tax
It may have been forgotten that the Mallorca Hoteliers Federation successfully lodged an appeal for there to be judicial review of the tourist tax; it was some months ago that this was done, after all.
It was unclear what grounds the federation felt it had for demanding a review, in particular given the fact that it had done so in 2001 in respect of the old ecotax and failed. Well, these grounds are now clearer. They include what the federation maintains is "disguised discrimination" against tourists. By these they are referring to the fact that tourists who come to the Balearics pay a tax because of the impact they have on the environment. Residents of the Balearics, who also have to pay the tax, do not pay the tax for the same reason because they are already here.
The federation adds that there is further discrimination because under two per cent of overnight stays in accommodation are those of residents. The tax is therefore directed at the travelling tourist.
The argument, one has to think, seems a bit thin; doesn't a tourist tax presuppose a travelling tourist? But the hoteliers believe that this disguised discrimination is sufficient to have the tax scrapped because it goes against European rules. The federation also takes the environmental angle in arguing that the tax discriminates against accommodation by not being applied to non-hotel tourist activities, such as restaurants. Moreover, the method of estimation for its payment places the burden not on tourists but on the accommodation, e.g. hotels.
The federation's case is, it has to be said, pretty complex, and it has provoked the scorn of Alberto Jarabo of Podemos. Earlier this week he described the hoteliers' appeal as being a "moral perversion" and one advanced by "fraudsters" without legitimacy to take a "legitimate and democratic government" to court.
While this legal row has been going on, the town halls have been following up on their displeasure at having been excluded from the distribution of tourist tax revenue. Their association, Felib, is concerned that future distributions won't be much better. It wants yet another committee to be formed in order to clarify what the town halls can expect in future. It is looking for some form of fixed percentage of revenue and has criticised the way in which priorities for spending the revenue raised last year were shifted.
Which is true, but then the government did say that it would be prioritising water projects that weren't specifically included in its list of "purposes" for the way in which the revenue would be spent. The first twelve million euros of the thirty million total revenue raised last year have been transferred to the government's water agency for seven projects.
It was unclear what grounds the federation felt it had for demanding a review, in particular given the fact that it had done so in 2001 in respect of the old ecotax and failed. Well, these grounds are now clearer. They include what the federation maintains is "disguised discrimination" against tourists. By these they are referring to the fact that tourists who come to the Balearics pay a tax because of the impact they have on the environment. Residents of the Balearics, who also have to pay the tax, do not pay the tax for the same reason because they are already here.
The federation adds that there is further discrimination because under two per cent of overnight stays in accommodation are those of residents. The tax is therefore directed at the travelling tourist.
The argument, one has to think, seems a bit thin; doesn't a tourist tax presuppose a travelling tourist? But the hoteliers believe that this disguised discrimination is sufficient to have the tax scrapped because it goes against European rules. The federation also takes the environmental angle in arguing that the tax discriminates against accommodation by not being applied to non-hotel tourist activities, such as restaurants. Moreover, the method of estimation for its payment places the burden not on tourists but on the accommodation, e.g. hotels.
The federation's case is, it has to be said, pretty complex, and it has provoked the scorn of Alberto Jarabo of Podemos. Earlier this week he described the hoteliers' appeal as being a "moral perversion" and one advanced by "fraudsters" without legitimacy to take a "legitimate and democratic government" to court.
While this legal row has been going on, the town halls have been following up on their displeasure at having been excluded from the distribution of tourist tax revenue. Their association, Felib, is concerned that future distributions won't be much better. It wants yet another committee to be formed in order to clarify what the town halls can expect in future. It is looking for some form of fixed percentage of revenue and has criticised the way in which priorities for spending the revenue raised last year were shifted.
Which is true, but then the government did say that it would be prioritising water projects that weren't specifically included in its list of "purposes" for the way in which the revenue would be spent. The first twelve million euros of the thirty million total revenue raised last year have been transferred to the government's water agency for seven projects.
Saturday, February 06, 2016
Hotelier Generosity And The Tourist Tax
So, Mallorca's hoteliers are, out of the goodness of the hearts, to bear the cost of the tourist tax this year. Pull the other one. The announcement, timed to coincide with the Balearic parliament's debate on the draft legislation for the tax, was designed to catch politicians (and others) on the hop. It is quite possible that the Partido Popular knew it was coming and also Ciudadanos, but as for the rest ... .
Once it was made, the announcement then needed some tweaking. It will be down to individual hotels or hotel chains, suggested the president of the federation, Inma de Benito, of whom it might well be asked on what authority she had made the original announcement. FEHM (Federación Empresarial Hotelera de Mallorca), i.e. the Mallorca Hoteliers Federation, is a product of its members. These are the associations in all the major tourist areas plus agrotourism and the separate association for hotel chains. Was she speaking for all of them?
Whether she was or wasn't, the fact is that these associations don't necessarily have 100% membership of local hotels or chains. The hoteliers federation does not, therefore, represent all hotel interests, while it certainly doesn't speak for Menorca, Ibiza and Formentera. How easy it can be to forget that there are three other islands, each of which is just as affected by the tourist tax as Mallorca.
This all said, was the announcement made because of concerns over lost business this summer because of the tax? No it was not. The federation and leading figures within the hotel industry had already acknowledged that the short-term impact (this year) would be negligible or non-existent. With overbooking a fear rather than loss of business, this was not the motivation. So, what was it?
The introduction of the tax, as has been noted many times, has been confusing. It is still in a state of confusion, ever more so as the legislation goes through its parliamentary process. The announcement, if anything, was designed to increase this confusion. The regional government's tourism ministry said not so long ago that it would be involving tour operators and others in an information campaign regarding the application of the tax. What will this campaign now consist of, assuming there will indeed be some hotels bearing the cost of the tax? For the poor tourist, it will be a message of the tax may be paid on your behalf or it might not be. In fact, it may well be in any event, because of reservation agreements in place.
The federation may, therefore, have been simply adopting a pragmatic approach in recognising that the burden for the tax has to be carried by its members and others. But what it really wants (other than the tax not being introduced at all) is a delay until 2017, an approach that would be wholly pragmatic, which is why the government appears determined not to adopt it. That the PP has proposed an amendment to this effect comes as no surprise at all.
The announcement wasn't a case of putting a spanner in the works but one of taking politicians by surprise. It has been interesting to note that the vocal ones have come from Podemos. Increasingly, where parliament is concerned, the tax seems to be a battle between Podemos and the PP. The actual government is almost irrelevant. It faces potential amendments that it doesn't want, such as to the discount in the low season. Podemos says there shouldn't be one. It is a party that doesn't disguise its hostility either towards the hated hoteliers or to tourists themselves. Tourist a friend? Hardly.
Common sense would dictate that the tax should be delayed for a year, while the government's general tax receipts - those for 2015 and those anticipated for this year - undermine a principal argument it has been making regarding financing. Common sense, however, seems to be in limited supply.
Once it was made, the announcement then needed some tweaking. It will be down to individual hotels or hotel chains, suggested the president of the federation, Inma de Benito, of whom it might well be asked on what authority she had made the original announcement. FEHM (Federación Empresarial Hotelera de Mallorca), i.e. the Mallorca Hoteliers Federation, is a product of its members. These are the associations in all the major tourist areas plus agrotourism and the separate association for hotel chains. Was she speaking for all of them?
Whether she was or wasn't, the fact is that these associations don't necessarily have 100% membership of local hotels or chains. The hoteliers federation does not, therefore, represent all hotel interests, while it certainly doesn't speak for Menorca, Ibiza and Formentera. How easy it can be to forget that there are three other islands, each of which is just as affected by the tourist tax as Mallorca.
This all said, was the announcement made because of concerns over lost business this summer because of the tax? No it was not. The federation and leading figures within the hotel industry had already acknowledged that the short-term impact (this year) would be negligible or non-existent. With overbooking a fear rather than loss of business, this was not the motivation. So, what was it?
The introduction of the tax, as has been noted many times, has been confusing. It is still in a state of confusion, ever more so as the legislation goes through its parliamentary process. The announcement, if anything, was designed to increase this confusion. The regional government's tourism ministry said not so long ago that it would be involving tour operators and others in an information campaign regarding the application of the tax. What will this campaign now consist of, assuming there will indeed be some hotels bearing the cost of the tax? For the poor tourist, it will be a message of the tax may be paid on your behalf or it might not be. In fact, it may well be in any event, because of reservation agreements in place.
The federation may, therefore, have been simply adopting a pragmatic approach in recognising that the burden for the tax has to be carried by its members and others. But what it really wants (other than the tax not being introduced at all) is a delay until 2017, an approach that would be wholly pragmatic, which is why the government appears determined not to adopt it. That the PP has proposed an amendment to this effect comes as no surprise at all.
The announcement wasn't a case of putting a spanner in the works but one of taking politicians by surprise. It has been interesting to note that the vocal ones have come from Podemos. Increasingly, where parliament is concerned, the tax seems to be a battle between Podemos and the PP. The actual government is almost irrelevant. It faces potential amendments that it doesn't want, such as to the discount in the low season. Podemos says there shouldn't be one. It is a party that doesn't disguise its hostility either towards the hated hoteliers or to tourists themselves. Tourist a friend? Hardly.
Common sense would dictate that the tax should be delayed for a year, while the government's general tax receipts - those for 2015 and those anticipated for this year - undermine a principal argument it has been making regarding financing. Common sense, however, seems to be in limited supply.
Friday, May 08, 2015
The Politics Of Mallorca's Tourism
As the regional election draws closer, the Mallorcan Hoteliers Federation, which can often give the impression of being a party in its own right, has jumped the gun in having a new president. The appointment of Inmaculada de Benito was finally confirmed on Monday, and she becomes the first president of the federation who is not a hotelier: she is a career administrator-cum-hotel politician.
In the presence of various politicians as well as business leaders and of course hoteliers, de Benito sounded as though she really was a politician. "We must all work with a unity of action if we want to advance as a country," she said. As the national Minister for Employment was on the stage with her, this line might well end up in a Mariano Rajoy speech some time in the not too distant future.
The hotel and tourism industries being as they are - rather important - inevitably attract a great deal of political interest, and as I alluded to in this column last week, there is a growing momentum in the tourism industry behind the Ciudadanos (C's) party. A week may be a long time in politics but it has proved to be a short time in giving the C's even more momentum. In parts of Spain dominated by coastal tourism where the Partido Popular vote is forecast as "collapsing" in the regional elections, the C's are the next best or even preferred option. The presidents of two unnamed tourist business associations have said that they will back Albert Rivera's party, while in the Balearics, it would appear that there are any number of directors and other management of hotel chains who are willing to vote for the C's and to advise friends and members of their families to do likewise. The hotel industry, as I say, is a powerful political force, and not just in Mallorca.
Part of the political debate does centre on what the hoteliers perceive as potentially dangerous policies that parties on the left might unleash, such as a tourist tax. The C's would probably not entertain such a policy, although it is a mark of the desperation within the PP that the party has been branded leftist when it is generally considered not to be. The C's would, nevertheless, be a safer option for the industry if the PP vote does indeed collapse.
Cranking up the case against a tourist tax is Thomas Cook. Its director of contracting, Hans Müller, came out at the weekend with an attack on such a tax. "Every few years mistakes are repeated, and we are now faced with the danger that this idea (a tourist tax in the Balearics) could suddenly cost us everything that has been gained over the past four years (a reference to the Bauzá PP government)." He went on to say that he didn't think a tax was either "fair" or "smart" and that it would have the same effect as the old eco-tax: a loss of tourists.
In the presence of various politicians as well as business leaders and of course hoteliers, de Benito sounded as though she really was a politician. "We must all work with a unity of action if we want to advance as a country," she said. As the national Minister for Employment was on the stage with her, this line might well end up in a Mariano Rajoy speech some time in the not too distant future.
The hotel and tourism industries being as they are - rather important - inevitably attract a great deal of political interest, and as I alluded to in this column last week, there is a growing momentum in the tourism industry behind the Ciudadanos (C's) party. A week may be a long time in politics but it has proved to be a short time in giving the C's even more momentum. In parts of Spain dominated by coastal tourism where the Partido Popular vote is forecast as "collapsing" in the regional elections, the C's are the next best or even preferred option. The presidents of two unnamed tourist business associations have said that they will back Albert Rivera's party, while in the Balearics, it would appear that there are any number of directors and other management of hotel chains who are willing to vote for the C's and to advise friends and members of their families to do likewise. The hotel industry, as I say, is a powerful political force, and not just in Mallorca.
Part of the political debate does centre on what the hoteliers perceive as potentially dangerous policies that parties on the left might unleash, such as a tourist tax. The C's would probably not entertain such a policy, although it is a mark of the desperation within the PP that the party has been branded leftist when it is generally considered not to be. The C's would, nevertheless, be a safer option for the industry if the PP vote does indeed collapse.
Cranking up the case against a tourist tax is Thomas Cook. Its director of contracting, Hans Müller, came out at the weekend with an attack on such a tax. "Every few years mistakes are repeated, and we are now faced with the danger that this idea (a tourist tax in the Balearics) could suddenly cost us everything that has been gained over the past four years (a reference to the Bauzá PP government)." He went on to say that he didn't think a tax was either "fair" or "smart" and that it would have the same effect as the old eco-tax: a loss of tourists.
Monday, June 02, 2014
Falling Out At The Hoteliers Federation
All is not well, it would seem, in Mallorca's hotel world. For once, this isn't because of occupancy, seasonality or the usual hotel-related subjects. It is to do with the Mallorcan hoteliers federation and what it is up to.
It isn't clear exactly what the problem is, but three former presidents of the federation have come out and said, more or less, that they consider that the federation is only concerned with the interests of the big hotel chains. They have intimated this but haven't enunciated the reasons why they think this.
But, if one takes a look at the federation's history, one might start to get an idea. It was created in 1976 and has had, over the 38 years of its existence, seven presidents. It is the background of these presidents that lends support to the complaints about the big chains.
The first president was Miguel Codolà. His hotel group - he died in 2012 - was Valentin, never more than a middle-ranking hotel chain in Mallorca. Following him came José Forteza Rey, Ferràn Porto, Pedro Cañellas, Antonio Horrach and Marilen Pol. What these all had in common was that they were involved, through ownership, with relatively small hotel concerns. Horrach's family hotel chain, for example, is HM. It has five hotels in Mallorca and one in Mexico. It isn't very big, therefore.
When Marilen Pol died in January last year, there was the possibility that Inmaculada de Benito, then the director of the federation, would succeed her. This, though, was ruled out on the grounds that she wasn't involved in hotel ownership. She wasn't, as was said at the time, a "hotelier". It had been the case, since the federation started, that a president had to be a hotelier in the sense of being an owner.
The federation, in seeking to find a successor to Pol, wanted someone for whom there would be a consensus of support. It had to adapt its statutes. Inma de Benito stayed in her post (before recently being promoted to vice-president), but Aurelio Vázquez, who is not an owner, was made president and he is CEO for Spain and the Mediterranean with Iberostar, having previously been with Riu. He has experience, therefore, of two of the "big four".
Vázquez and de Benito were recently in Madrid, where they set out fifty measures that they want the national government to adopt and which would create a special "regime" for the hotel industry. Among these measures are those to do with tax advantages, limitations on strike action and incentives for modernisation. Concerns expressed by the three former presidents - Forteza Rey, Porto and Cañellas - appear to have come in the wake of the Madrid announcement. Yet, and one would have thought, they would be measures which would be beneficial for all hoteliers.
The three ex-presidents have all said that they think Vázquez and de Benito are doing a good job. There again, for diplomacy's sake, they probably would say this. But they obviously have some disagreement, Forteza Rey having said that proposals should not be allowed to generate any controversy, without stating what this controversy might be.
The Madrid announcement has taken the tourism industry by surprise. Vázquez was asked why the Mallorcan federation had opted to go it alone in calling for the measures, when they are essentially the same as those called for by the Spanish federation. He replied that the means are not important but the end (i.e. it doesn't matter who makes the proposals), adding that previous proposals had not been of the "calibre" of those made by the Mallorcan federation.
One detects in all this a feeling that the Mallorcan federation is getting above its station and so therefore may indeed be pressing the case of its big hotel chains. Mallorca does have, relative to other parts of Spain, a concentration of the country's largest hotel companies, but this still doesn't explain why former presidents of the federation might take issue.
Is it, therefore, all linked to the traditions of the federation, one that had been presided over by those from smaller family concerns? Vázquez is a hotel career professional, while de Benito is the closest one could get to what could be dubbed a tourism industry politician, having spent most of her career knocking around hotel associations. And the politics of the hotel industry, specifically the attitude of the federation towards wage negotiations, may be what is worrying the old guard. Of a previous round of negotiations, Antonio Horrach, by then no longer president, took issue with de Benito, saying that wage increases should be accepted. Does this give a clue as to why the ex-presidents have expressed their concerns? Whatever the reason, the hoped-for consensus in the appointment of Vázquez seems to have been shortlived.
It isn't clear exactly what the problem is, but three former presidents of the federation have come out and said, more or less, that they consider that the federation is only concerned with the interests of the big hotel chains. They have intimated this but haven't enunciated the reasons why they think this.
But, if one takes a look at the federation's history, one might start to get an idea. It was created in 1976 and has had, over the 38 years of its existence, seven presidents. It is the background of these presidents that lends support to the complaints about the big chains.
The first president was Miguel Codolà. His hotel group - he died in 2012 - was Valentin, never more than a middle-ranking hotel chain in Mallorca. Following him came José Forteza Rey, Ferràn Porto, Pedro Cañellas, Antonio Horrach and Marilen Pol. What these all had in common was that they were involved, through ownership, with relatively small hotel concerns. Horrach's family hotel chain, for example, is HM. It has five hotels in Mallorca and one in Mexico. It isn't very big, therefore.
When Marilen Pol died in January last year, there was the possibility that Inmaculada de Benito, then the director of the federation, would succeed her. This, though, was ruled out on the grounds that she wasn't involved in hotel ownership. She wasn't, as was said at the time, a "hotelier". It had been the case, since the federation started, that a president had to be a hotelier in the sense of being an owner.
The federation, in seeking to find a successor to Pol, wanted someone for whom there would be a consensus of support. It had to adapt its statutes. Inma de Benito stayed in her post (before recently being promoted to vice-president), but Aurelio Vázquez, who is not an owner, was made president and he is CEO for Spain and the Mediterranean with Iberostar, having previously been with Riu. He has experience, therefore, of two of the "big four".
Vázquez and de Benito were recently in Madrid, where they set out fifty measures that they want the national government to adopt and which would create a special "regime" for the hotel industry. Among these measures are those to do with tax advantages, limitations on strike action and incentives for modernisation. Concerns expressed by the three former presidents - Forteza Rey, Porto and Cañellas - appear to have come in the wake of the Madrid announcement. Yet, and one would have thought, they would be measures which would be beneficial for all hoteliers.
The three ex-presidents have all said that they think Vázquez and de Benito are doing a good job. There again, for diplomacy's sake, they probably would say this. But they obviously have some disagreement, Forteza Rey having said that proposals should not be allowed to generate any controversy, without stating what this controversy might be.
The Madrid announcement has taken the tourism industry by surprise. Vázquez was asked why the Mallorcan federation had opted to go it alone in calling for the measures, when they are essentially the same as those called for by the Spanish federation. He replied that the means are not important but the end (i.e. it doesn't matter who makes the proposals), adding that previous proposals had not been of the "calibre" of those made by the Mallorcan federation.
One detects in all this a feeling that the Mallorcan federation is getting above its station and so therefore may indeed be pressing the case of its big hotel chains. Mallorca does have, relative to other parts of Spain, a concentration of the country's largest hotel companies, but this still doesn't explain why former presidents of the federation might take issue.
Is it, therefore, all linked to the traditions of the federation, one that had been presided over by those from smaller family concerns? Vázquez is a hotel career professional, while de Benito is the closest one could get to what could be dubbed a tourism industry politician, having spent most of her career knocking around hotel associations. And the politics of the hotel industry, specifically the attitude of the federation towards wage negotiations, may be what is worrying the old guard. Of a previous round of negotiations, Antonio Horrach, by then no longer president, took issue with de Benito, saying that wage increases should be accepted. Does this give a clue as to why the ex-presidents have expressed their concerns? Whatever the reason, the hoped-for consensus in the appointment of Vázquez seems to have been shortlived.
Thursday, May 01, 2014
A New (Hoteliers') Tourism Policy
The Cercle d'Economia is a body of wise men and women (in fact, almost exclusively men) which from time to time dispenses the sort of wisdom aimed at Mallorca's tourism industry that is not always associated with the industry. It staged a conference earlier this week entitled "reflections on tourism policy". The star attraction was the director of the Mallorcan hoteliers federation, Inmaculada de Benito, someone who hasn't always appeared to be totally wise. It was she who in 2012 infamously referred to the economy of the Balearics being broken because there was not 100% hotel occupancy in high summer, an observation which ignored the fact that there never is 100% occupancy - not in Mallorca as a whole. This was an observation with the holiday-let market firmly in its sight. This market was helping to cause the broken economy. In July 2012, Mallorca registered its highest hotel occupancy rate for a July this century. So much for things having been broken.
Sra. de Benito produced one of those presentations of the type loved by consultants. You know the sort of thing - masses of charts and diagrams which are all terribly impressive but not always terribly meaningful. One diagram, however, was intended to be particularly meaningful. It was a funnel with a wide brim admitting tourist arrivals with a very much narrower stem from which tourist revenues were dripping. It was a diagram of which the federation's president, Aurelio Vázquez, would have only partially approved. In March he came out with the statement that between 2004 and 2012 there needed to have been a million and a half more tourists in order to merely maintain revenues. The funnel's brim needed to have been substantially wider and the tourist arrivals substantially greater.
Nevertheless, the diagram was making the same point as Vázquez had, and it has to be considered within the context of the hoteliers' current propaganda regarding wage negotiations. The narrative, for some years now, has been consistent. Revenues have stagnated and profitability has declined, while costs (labour being one of them) are too high. The hoteliers' offer on wages is a zero percentage rise.
Having reflected on tourism policy, Sra. de Benito has come to the conclusion that two key aspects of public tourism policy are not sufficient for guaranteeing long-term competitiveness in the industry. These aspects are what she refers to as offer policies (regulation, planning and taxation) and demand policies, such as overseas promotion. There has to be, she says, better co-ordination between these policies. Meaning what exactly?
Of the demand policies, there is precious little promotion as it is, so it is difficult to see how there can be better co-ordination when one part of the equation is all but non-existent. Of the offer policies, Sra. de Benito would like, it would seem, lower taxes, less regulation and less planning bureaucracy, to which we can probably all say amen and not just on the hoteliers' behalf.
In fact, these offer policies have already been introduced. The 2012 tourism law did so, while the decree on mature tourist zones (the first one of which was applied to Playa de Palma last year) is intended to relax planning regulations. But as ever, this is regulation which is not evenly distributed and does not serve the tourism industry as a whole. To take the current flavour of the moment (when hasn't it been?), that of all-inclusive, Sra. de Benito presumably would not support regulation. It would be pretty odd if she did, having intimated that she wants less of it in general.
The thrust of her reflection was that there should be integration of different economic sectors in order to add value to tourism and to build a "socially sustainable" model. These sectors would include health, the environment, technology, agriculture, education and transport. Which all sounds very laudable, but when she then goes on to talk about generating more and better employment and greater well-being among the citizenship, how does she square this with a de-regulated environment in which the all-inclusive is increasingly coming to dominate, thus creating a negative consequence for general economic well-being? Indeed, how does she square better employment with hoteliers' wishes to be able to engage in more contracting-out of services, more flexible employment contracts and zero wage increases?
Essentially, and cutting away the consultancy-style gobbledegook, what Sra. de Benito wants is for the private sector to have greater say if not the majority say in tourism policy. Which might not be such a bad thing, were it not for the fact that the private sector would almost inevitably mean the hotel sector assuming priority. She alludes to the political correctness of a "socially sustainable" model, but on whose terms would this model be based?
The wise men of the Cercle will have listened and reflected. Fortunately perhaps, only some of them are hoteliers.
Sra. de Benito produced one of those presentations of the type loved by consultants. You know the sort of thing - masses of charts and diagrams which are all terribly impressive but not always terribly meaningful. One diagram, however, was intended to be particularly meaningful. It was a funnel with a wide brim admitting tourist arrivals with a very much narrower stem from which tourist revenues were dripping. It was a diagram of which the federation's president, Aurelio Vázquez, would have only partially approved. In March he came out with the statement that between 2004 and 2012 there needed to have been a million and a half more tourists in order to merely maintain revenues. The funnel's brim needed to have been substantially wider and the tourist arrivals substantially greater.
Nevertheless, the diagram was making the same point as Vázquez had, and it has to be considered within the context of the hoteliers' current propaganda regarding wage negotiations. The narrative, for some years now, has been consistent. Revenues have stagnated and profitability has declined, while costs (labour being one of them) are too high. The hoteliers' offer on wages is a zero percentage rise.
Having reflected on tourism policy, Sra. de Benito has come to the conclusion that two key aspects of public tourism policy are not sufficient for guaranteeing long-term competitiveness in the industry. These aspects are what she refers to as offer policies (regulation, planning and taxation) and demand policies, such as overseas promotion. There has to be, she says, better co-ordination between these policies. Meaning what exactly?
Of the demand policies, there is precious little promotion as it is, so it is difficult to see how there can be better co-ordination when one part of the equation is all but non-existent. Of the offer policies, Sra. de Benito would like, it would seem, lower taxes, less regulation and less planning bureaucracy, to which we can probably all say amen and not just on the hoteliers' behalf.
In fact, these offer policies have already been introduced. The 2012 tourism law did so, while the decree on mature tourist zones (the first one of which was applied to Playa de Palma last year) is intended to relax planning regulations. But as ever, this is regulation which is not evenly distributed and does not serve the tourism industry as a whole. To take the current flavour of the moment (when hasn't it been?), that of all-inclusive, Sra. de Benito presumably would not support regulation. It would be pretty odd if she did, having intimated that she wants less of it in general.
The thrust of her reflection was that there should be integration of different economic sectors in order to add value to tourism and to build a "socially sustainable" model. These sectors would include health, the environment, technology, agriculture, education and transport. Which all sounds very laudable, but when she then goes on to talk about generating more and better employment and greater well-being among the citizenship, how does she square this with a de-regulated environment in which the all-inclusive is increasingly coming to dominate, thus creating a negative consequence for general economic well-being? Indeed, how does she square better employment with hoteliers' wishes to be able to engage in more contracting-out of services, more flexible employment contracts and zero wage increases?
Essentially, and cutting away the consultancy-style gobbledegook, what Sra. de Benito wants is for the private sector to have greater say if not the majority say in tourism policy. Which might not be such a bad thing, were it not for the fact that the private sector would almost inevitably mean the hotel sector assuming priority. She alludes to the political correctness of a "socially sustainable" model, but on whose terms would this model be based?
The wise men of the Cercle will have listened and reflected. Fortunately perhaps, only some of them are hoteliers.
Monday, August 27, 2012
When Broken Isn't Broken: Hotel occupancy
I have lost patience with the Mallorcan Hoteliers Federation. Lost patience with its propaganda, its dissembling, its hyperbole. Lost patience as well with the apparent complicity of much of the media which accepts the federation's announcements without question, does not challenge them and draws inaccurate conclusions, which is what the federation's announcements are presumably intended to achieve.
The other day, the president of the federation stated that "we're talking about a broken economy" if hotel occupancy in August is not 100%. This is the hyperbole for you, a dissembling without reference to historical fact, and propaganda to support the special pleading that constantly comes out of the federation. To talk of 100% occupancy is total garbage. Way back when, in the days of less competition, 100% occupancy may have occurred (though I doubt it), but since the turn of the century it hasn't. If we are indeed talking about a broken economy, then it has been broken for an awfully long time. The dissembling is made worse because the hoteliers are fully aware as to historical information; they provide it.
It is easy to find this information. The problem is, or appears to me to be a problem, that no one bothers to look for it and to use it as a means of challenging the federation's conclusions. Except me, it would seem. The information is contained in the regional government's "tourism observatory" that is openly available on its website. Information for Mallorca's occupancy is part of the metadata gathered by the Spanish National Statistics Office (INE), also openly available via the internet.
For the peak months of July and August from 2001 to 2011, 22 separate months therefore, on only six occasions has hotel occupancy in Mallorca been 90% or higher (the six occasions were all in August - 2001, 2003, 2004, 2006, 2007 and 2011). In 2009, August occupancy wasn't 90%, it wasn't even 80%; it was 79.3%. Why? Simple. Crisis had taken hold big time. Last year's August occupancy was the highest this century: 93.2%. Why? Simple. The Arab spring effect.
The federation's so-called broken economy is a conclusion derived from what is anticipated will be an August occupancy figure of around 90%. The information for August won't be definitively known until later, but if we accept 90%, then, yes, it is a fall compared with last year, but last year was an exception; it was 4.1% higher than the August average of 89.1% since 2001. If "around 90%" happens to end up being the occupancy for this August, then it will have been a normal August; possibly better than the average in fact.
August's occupancy figures are one thing. What of July's? Last year, thanks to the Arab spring, occupancy was 89.9%, the highest since 2001 and way above the average of 84.1% between 2001 and 2011. But what happened this July? INE's data tells us that not only did the Balearics have the highest occupancy in Spain, it was also at a level of 90.4%. For Mallorca, the figure was higher still - 91.7%. This July, therefore, hotel occupancy exceeded 90% for the first time this century.
The federation's broken economy soundbite cannot be substantiated. Occupancy is either better (in July) than usual or at a similar level (in August) to the average. 100% is, in any event, a virtual impossibility. Some resorts may get close but this is all they do. It would be nice if there were 100% occupancy in both July and August, but it would never happen and could never happen. The pattern of occupancy across the island varies according to resort popularity, tour operator activity and levels of hotel supply. 100% for the island as a whole, therefore, is unrealistic.
The hoteliers, however, play a game of propaganda. They set the situation up (40% of tourists in illegal accommodation, for example) and follow up with figures they know are more or less representative yet which can imply under-occupancy, the cause of which is market imbalance, e.g. the illegal accommodation. Which is further garbage. Tourists who want to stay in a hotel will stay in a hotel. Tourists who don't want to stay in a hotel won't stay in a hotel. End of.
I have lost patience but I do have some sympathy because of the lack of a winter season. The statistics since 2001 don't make good reading. In 2001, the best year, January and February occupancy was, respectively, 52.8% and 71%. This year, it was 40% and 52.7%. The sympathy evaporates, though, thanks to the special pleading and the misleading information, both of which are compounded by a media which, for whatever reason, does not appear to question.
Any comments to andrew@thealcudiaguide.com please.
The other day, the president of the federation stated that "we're talking about a broken economy" if hotel occupancy in August is not 100%. This is the hyperbole for you, a dissembling without reference to historical fact, and propaganda to support the special pleading that constantly comes out of the federation. To talk of 100% occupancy is total garbage. Way back when, in the days of less competition, 100% occupancy may have occurred (though I doubt it), but since the turn of the century it hasn't. If we are indeed talking about a broken economy, then it has been broken for an awfully long time. The dissembling is made worse because the hoteliers are fully aware as to historical information; they provide it.
It is easy to find this information. The problem is, or appears to me to be a problem, that no one bothers to look for it and to use it as a means of challenging the federation's conclusions. Except me, it would seem. The information is contained in the regional government's "tourism observatory" that is openly available on its website. Information for Mallorca's occupancy is part of the metadata gathered by the Spanish National Statistics Office (INE), also openly available via the internet.
For the peak months of July and August from 2001 to 2011, 22 separate months therefore, on only six occasions has hotel occupancy in Mallorca been 90% or higher (the six occasions were all in August - 2001, 2003, 2004, 2006, 2007 and 2011). In 2009, August occupancy wasn't 90%, it wasn't even 80%; it was 79.3%. Why? Simple. Crisis had taken hold big time. Last year's August occupancy was the highest this century: 93.2%. Why? Simple. The Arab spring effect.
The federation's so-called broken economy is a conclusion derived from what is anticipated will be an August occupancy figure of around 90%. The information for August won't be definitively known until later, but if we accept 90%, then, yes, it is a fall compared with last year, but last year was an exception; it was 4.1% higher than the August average of 89.1% since 2001. If "around 90%" happens to end up being the occupancy for this August, then it will have been a normal August; possibly better than the average in fact.
August's occupancy figures are one thing. What of July's? Last year, thanks to the Arab spring, occupancy was 89.9%, the highest since 2001 and way above the average of 84.1% between 2001 and 2011. But what happened this July? INE's data tells us that not only did the Balearics have the highest occupancy in Spain, it was also at a level of 90.4%. For Mallorca, the figure was higher still - 91.7%. This July, therefore, hotel occupancy exceeded 90% for the first time this century.
The federation's broken economy soundbite cannot be substantiated. Occupancy is either better (in July) than usual or at a similar level (in August) to the average. 100% is, in any event, a virtual impossibility. Some resorts may get close but this is all they do. It would be nice if there were 100% occupancy in both July and August, but it would never happen and could never happen. The pattern of occupancy across the island varies according to resort popularity, tour operator activity and levels of hotel supply. 100% for the island as a whole, therefore, is unrealistic.
The hoteliers, however, play a game of propaganda. They set the situation up (40% of tourists in illegal accommodation, for example) and follow up with figures they know are more or less representative yet which can imply under-occupancy, the cause of which is market imbalance, e.g. the illegal accommodation. Which is further garbage. Tourists who want to stay in a hotel will stay in a hotel. Tourists who don't want to stay in a hotel won't stay in a hotel. End of.
I have lost patience but I do have some sympathy because of the lack of a winter season. The statistics since 2001 don't make good reading. In 2001, the best year, January and February occupancy was, respectively, 52.8% and 71%. This year, it was 40% and 52.7%. The sympathy evaporates, though, thanks to the special pleading and the misleading information, both of which are compounded by a media which, for whatever reason, does not appear to question.
Any comments to andrew@thealcudiaguide.com please.
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