Keep Taking Us To Havana

It may be that someone did actually say "take me to Havana" in the days when airplane hijacks suddenly became popular and the Cuban capital was on the list of favoured destinations for the asylum-seeker. Closed off, to US airlines at any rate, the island nation had acquired a certain mystic, courtesy of Fidel Castro.

In the 1960s, when various individuals supposedly started to wander into cockpits in order to request a detour, Spain remained committed to the 1953 agreement with the US (and Vatican) by which the Franco regime was to legitimise itself in the view of a doubting international community. A pro-American policy wasn't, however, to prevent the regime from establishing a relationship with Castro, and this owed much to the coincidence of 1959: Castro staged his revolution, while Spain adopted the Stabilisation Plan which was to underpin the country's economic revolution.

Prior to the rise of Castro, Franco had been seeking to exert Spanish influence throughout the one-time empire of Central and South America. This was via a combination of the concept of "Hispanidad" and the stifling Catholicism that had characterised the Franco regime from the time of the Civil War. The clash of ideologies that Castro's revolution represented might well have shattered relations with Spain, with the threat to these relations initially equal on both sides. Cuba expelled the Spanish ambassador in 1960 for having interrupted Castro while he was criticising Spain. The regime, for its part, was under pressure from external forces (especially the Americans) and because of dissenting voices internally.

But through the 1960s a realpolitik emerged that was based far less (if at all) on the previous nationalist-religious philosophy and very much more on economic necessity. The dogmas of the Falange were discarded in favour of the technocracy of Opus Dei. The pragmatic technocrats, so important in having guided Spain to a more stable economic future courtesy of, for example tourism, viewed Cuba purely in economic terms. Trade with Cuba, rather than lessening, increased during the 1960s, and by the 1970s there was pretty much full-scale economic cooperation.

For the regime, Cuba held special significance. This had been one of Spain's most important colonies in the nineteenth century. The economic relationship was such that Mallorcans were among those who grew rich through trading with the island (and also Puerto Rico). When Cuba was lost during the humiliations suffered at the hands of the Americans at the end of the nineteenth century, national (and military) pride was shattered. Franco had sought to restore this. Despite what the Americans felt about Castro, events of 1898 still influenced thinking.

The ties with Cuba, strengthened by the PSOE government of Felipe González, were such that in 1990 the old relationship with Mallorca's entrepreneurs was truly revived. In that year, the Sol Palmeras hotel was opened. The following year, Castro attended the opening of the Meliá Varadero hotel, just as he had been at the inauguration of the Sol Palmeras.

The way had been opened up by a businessman from the Canaries, Enrique Martinón, who was the first to really sense the tourist possibilities in Cuba. Sol Meliá, as was, entered into a 50-50 joint venture with the Cuban state corporation. Mallorca's hoteliers were thus beginning a lucrative association with Cuba, the main problem to which was to be the 1996 Cuban Liberty and Democratic Solidarity (Libertad) Act, otherwise known as the Helms-Burton Act, under which foreign companies could be sued for "trafficking" land confiscated from Americans after the Castro revolution. At least one hotel, Las Americas, was on land that had belonged to the Dupont family.

The Helms-Burton Act was met with a unified response of opposition by the European Union, but in the same year that it was passed, José María Aznar of the Partido Popular came to power. He adopted a much tougher attitude towards Cuba, and the EU accepted a "common position" - proposed by Madrid - to pursue democratic reforms in Cuba. This political move pleased the American government, but it was also a means - so it seemed - for a deal to be struck: Spanish companies would not be pursued by Helms-Burton. Aznar, for all his hardline stance, was to go to Cuba in 1999. He stayed at the Havana Meliá, showing his support for Spanish entrepreneurs and protesting against Helms-Burton and the US embargo.

If nothing else, this all highlighted what by then were one hundred years of US-Spanish tensions where Cuba was concerned. Meliá was obliged to disinvest in the US, having set its stall out in Cuba, a loyalty that Castro recognised, but any difficulties were not to get in the way of Mallorcan hotelier expansion. Iberostar appeared in 1998, and with Meliá now forms by far the strongest presence. There are currently some 58,000 hotel places in Cuba. Roughly half of them are under the control of Balearic hotel chains.

From Mallorca To Panama

Panama is a Central American republic which has gifted to the world a canal and a hat. In more general terms, its global impact is limited. It doesn't possess a national football team of any note, which might spread its name further, and hasn't been responsible for any international musical genre. In the relatively recent past, global attention was paid to it on account of General Manuel Noriega, a military ruler for whom corruption and abuse of human rights weren't options but ways of life. When the US finally invaded - Operation Just Cause - Noriega was removed from power, flown to the US, put on trial and sentenced to 40 years for, among other things, drug trafficking and money laundering.

Since then, Panama has become a more stable society, one mostly ignored by the world. Until now. To its canal and its hat, it has now added its papers. The world has also become familiar with a law firm called Mossack Fonseca, a firm that everyday folk around the globe would never have heard of. Less than everyday folk, however, knew a great deal about it. Panama itself is one of the chief tax havens cited, albeit that it lags some distance behind the British Virgin Islands. The Bahamas, the Seychelles, paradises in one regard have been revealed to be paradises in another - the Spanish refer to a tax haven as a "paraíso fiscal".

While the leaks have claimed Iceland's prime minister, cited the father of Britain's PM, implicated the president of Russia and have led to Swiss police interest in the headquarters of Uefa, they have also landed rather closer to home in Mallorca. Two of the island's major hotel chains have been forced to issue statements in respect of dealings with Mossack Fonseca. The Escarrer family (Meliá Hotels International) administered from 1985 a trust through Mossack Fonseca which looked after the wealth of the hotel chain's founder and president, Gabriel Escarrer Juliá. Meliá says that in line with Spanish government measures the situation has been "regularised" for a long time, with overseas bank accounts being declared to the tax authorities.

Luis and Carmen Riu Güell of Riu Hotels & Resorts had at least two offshore companies registered in Panama, which were linked to Mossack Fonseca. Riu says, however, that the association with Mossack Fonseca ended some years ago. It has stated that it complies with tax laws in both Spain and Panama. It might be noted that Riu has two hotels in Panama. As such, there now being bank accounts and registered companies would not be unusual. These are, says Riu, legally constituted companies.

It needs stressing that there is nothing to suggest any wrongdoing on behalf of Meliá, Riu or family members. But the leaking of their Panama connection could really not have come at a worse time. Or put it another way, it couldn't have come at a better time for certain politicians. Laura Camargo of Podemos was one of the first to put her Panama hat on. The matter will be taken to parliament next week. President Armengol will be asked what measures the Balearic government will be proposing to investigate what quantity of money has "allegedly" been "stolen" from the islands. She needs to be careful what she says, one can't help feeling.

Inevitably, the affair is being linked by Podemos to what Camargo describes as "serious cases of labour exploitation" in the Balearics. It is the accusations of exploitation plus the demonising of the hoteliers, especially the large ones, that make the Panama papers such a Godsend for Podemos. As it also is for David Abril, the most vocal of anti-hotelier Més voices. The large hotel chains should now cease giving lessons and advice in respect of tourism policy, he says. While the hoteliers have been campaigning against the tourist tax, they have been "diverting millions to Panama through phantom companies in order not to pay tax here". Even the town hall in Palma is having its say. Neus Truyol, the Més deputy mayor for ecology, wants the state to investigate cases of alleged tax fraud suggested by the Panama papers.

It might be noted that there are others mentioned in the papers. One of them is King Felipe's aunt, Pilar de Borbón, the sister of the former king, Juan Carlos. And in the case of the royals, her name appearing among the leaks is also less than opportune. One aspect of the ongoing Nóos trial is that Princess Cristina's husband was involved in diverting money to tax havens via the companies that he and ex-business partner, Diego Torres, set up.

The Panama papers will continue to throw up revelations, as potentially damaging as any from Wikileaks. Spain got away relatively lightly with Wikileaks, but now, and regardless of how correct affairs were or may have been, the political atmosphere is different. There are some who will smell blood. 

In Search Of Brand Mallorca

Mallorca has some pretty serious brands. To Marriott and Hilton are being added Hyatt and Virgin. What do these have in common? Apart from all being in the hotel business (which will be the case with Virgin), they are all foreign. Moreover, they are global brands. Their recognition takes them around the world.

The strength of a brand doesn't happen by accident. It isn't solely an achievement of clever marketers. There has to be considerable substance for a brand to be imbued with the consumer confidence and trust that stem from this recognition. And this substance is created by doing things well and innovatively: even the comparatively small things. Take Marriott, for example. With its acquisition of Starwood, it is poised to become the world's largest hotel concern. A giant of the travel and tourism industry, I can recall how - many years ago now - Marriott was pioneering the use of what would nowadays be referred to as to the exploitation of Big Data. Its innovation in data capture was such that it created personalised attention. The collection of client preferences was stored and then shaped into what would be presented to the client on his or her next stay.

Such detail, such service is what goes towards the establishment of the attributes that mark a great brand out from others. Too often, or so it can appear, it is the visuals of the brand that are believed to suffice. They do not; it is what lies behind the hotel facades, logos and advertising messages that matter.

Virgin is a very different case. It is a peculiar organisation in that it appears to be a vast conglomerate chewing away at more or less every available sector going. And yet its style has always been essentially decentralised. It is more like a franchise system, unified under a brand name that carries with it values that inspire confidence, rather than one massive and faceless entity. 

To no small extent, the Virgin brand is an abstraction from the attributes assigned to its founder, but it would not have succeeded in the way that it has if these were all that it relied upon, and a clue to that success might be found in one word that Richard Branson has uttered in respect of ambitions for the Son Bunyola hotel: "best".

It might seem simplistic, but an aspiration for being the "best" is what impels businesses to seek and to attain brand superiority. The whole structure is designed with being the best or the best possible. And with this being-the-best come the ultimate aims of branding - customer loyalty and trust as well as profit, recognition and/or market leadership.

For all the success of Mallorca's home-grown, global hotel companies, none of them possess the same brand powers as a Marriott, a Hyatt, a Hilton or a Virgin. Up to a point, this is a question of scale. Meliá, as an example, may be big but it is dwarfed by others. But it, as with other Mallorcan hotel companies, were slow to appreciate the benefits of strong branding. This isn't just me saying so, they've all pretty much admitted as such.

As they play catch-up, and none better than Meliá, what might this mean for Mallorca? Superior brands of ever greater recognition, they should, they will have a rub-off effect on the island. But to what degree might these major hotel chains create a type of de facto brand for Mallorca? One that is cast in their collective image, this collective being a combination of the home-grown, leading hotel chains and the foreign ones, to which other names and brands - from the Middle and Far East - will follow.

Gabriel Escarrer of Meliá has spoken of the need for Mallorca and the Balearics to become an "elite" destination. This is one in which the global, "best" brands will succeed, but is it this process of re-branding that inspires so much resentment among some politicians and, so it would seem, the public at large? When Alberto Jarabo of Podemos opined that the hoteliers act against the best interests of Mallorca, a staggering 80%-plus agreed with him (according to one survey).

The politics of current tourism harbour philosophies opposed to fundamentals of strong branding. For Podemos, "sun and beach" is obsolete, when it is Mallorca's primary brand attribute. The tourist tax does nothing for loyalty developed over decades. Neither of these envisages a strategic vision of Mallorca as "best", only Mallorca as defined by specific political interests. The hoteliers, meanwhile, disconnected from this political process, follow their branding initiatives which ultimately make the island secondary: it is the brand and the loyalty to it which matters and not the destination.

Who will step up and argue for brand Mallorca? Perhaps no one, because while such tensions exist, there can never be a unified brand. Someone should talk to Branson.

Lousy Review, Less Pay

Once upon a time, employees would be assessed only by their managers. This was the traditional performance appraisal, an often worthless exercise if, as happened to me on one occasion, it was conducted over a lunch at which the boss, a couple of pre-lunch G&Ts on board followed by a whole bottle of wine to himself, forgot why we were having lunch.

Other systems of appraisal were introduced. There was the upward feedback. Staff could assess the manager, a process which had inherent risks. If Employee A didn't like Manager B, then Manager B could well get a bum assessment. But the purveyors of appraisal systems would insist that these systems would filter out such subjectivity without ever truly convincing everyone that they did, and this was also the case when so-called 360-degree feedback became popular. Anyone could have his or her say. Customers, suppliers, colleagues: they could all have a pop.

These systems weren't of course a free-for-all. Bias was ironed out as much as possible. They wouldn't have been effective or have become as widespread as they did had they just been means of expressing dislike. But they were something of a culture shock for employees or managers who were to discover that there were a number of "stakeholders" whose assessment of performance fell some way short of how the employee or manager would have assessed his or her own performance.

These broader systems of appraisal were all part of a wider culture shock, that of changes to organisations' culture and their ways of doing things. By subjecting personnel to closer scrutiny by these different stakeholders, performance would improve and do so in line with new cultures that were more open to the needs of customers and others.

Into this appraisal mix came technology, and now there is the technology of social media. Customers can have their say like never before, and certain businesses are embracing this customer voice in their assessment of individuals' performance. Comments on Trip Advisor and similar websites are now being used to determine just how much people get paid.

Since the explosion of social media and review and comments' sites in particular, a whole industry of online reputation management has grown up. ReviewPro is one of the leading examples of this monitoring, and its Spanish division works with a whole host of hotel chains. Look at its clients and very familiar names appear: Meliá, Iberostar, Viva and so on.

Meliá is said to be one of the pioneers of using customer comments as part of a quality system through which performance can be measured and remuneration adjusted. Variable pay is partially determined on the basis of these comments; variable pay meaning performance pay, i.e. meeting and exceeding personal and company performance targets. At Meliá, this pay can apparently equate to as much as 20% of overall remuneration, so there is a strong incentive for management to ensure that customer satisfaction is high and also to respond in a thoughtful fashion to any negative comments.

The underlying philosophy is or should be obvious. Customers are at the heart of everything Meliá does, as is the case with any hotel chain. But how well this philosophy is understood by other chains or within Mallorca's tourism industry as a whole is open to some debate. Even among the clients that ReviewPro has, there are individual hotels which are part of certain chains that receive numerous negative comments and little or no response from management.

From surveys that Trip Advisor has done, it has been shown that responding to comments, both negative and positive, is as powerful as the comment itself. Yet, too often there are no responses and when there are they are standard ones issued not by, say, the hotel's director but by someone with a vague public relations job title. 

As with any system of appraisal, using online comments is probably not foolproof. There is greater scope through social media for biased or malicious assessments than there ever was with more traditional appraisal methods. There is also the potential, once it becomes widely known that pay is directly being influenced, for online blackmail, something which does already occur. But then this is something for devisers of systems to take account of.  

In principle, using customer comments is a very good tool for chains to not just monitor management and hotel performance but also to improve it as part of ongoing quality management systems. It should, therefore, be far more widely adopted by the Mallorcan tourism industry which, despite criticisms of standards, is using other methods to improve quality, the SICTED system of quality being one of them.

But there are limits to how useful such a tool is. Many negative comments stem not from poor management at specific hotels but from a lack of investment by chains which leave hotels open to such negativity.

Into The Biosphere: Sustainable/responsible tourism

This has been a week during which it was revealed that Catalonia wishes to become the first tourism region in the world to obtain a Biosphere certification. Which seemed a little odd as Menorca has been a Biosphere for over twenty years: it was declared to be one by UNESCO in 1993. Whatever. Perhaps Menorca isn't a region as such. Anyway, UNESCO has a regional Biosphere which is certified by its Global Sustainable Tourism Council, a body with lofty aims to ensure, inter alia, that "tourism meets its potential as a tool for conservation and poverty alleviation". A Biosphere refers to, among other things, the encouragement of the "social and cultural authenticity of each (tourist) destination and community".

Catalonia's ambition comes at a time when, according to global trends in tourism, "a new traveller" is seeking "creative and sustainable destinations". The argument goes that by promoting sustainability (this Biosphere stuff), a destination can establish greater loyalty from a tourist who, impressed by the efforts to maintain the environment, the local culture, the local heritage, alleviate poverty, etc. etc., will become a repeat tourist. There is a further argument that this approach will enable a destination to in fact increase its tourism in the first place.

Sustainable tourism, responsible tourism and other terms do have specific meanings and grand intentions. But they have also become part of the tourism marketing lexicon for destinations for which they weren't originally intended. Sustainable tourism was derived from sustainable development, initially a UN programme with contemporary origins in the 1980s. Primarily, it was concerned (as was sustainable tourism when it was first conceived) with protection of less-developed parts of the world. Subsequently, the tourism industry latched on to the idea that all this sustainability offered product and marketing possibilities for developed tourist destinations.

This isn't to say that genuine efforts have not been made - as they have - but to come to Catalonia or indeed to Mallorca, how applicable are principles of sustainable (or responsible) tourism? Let's consider a couple. Involve local people in decisions that affect their lives and life chances. Provide more enjoyable experiences for tourists through meaningful connections with local people and a greater understanding of local cultural, social and environmental issues.

While it is undeniable that there are tourists who value the second of these, and do so in Catalonia or Mallorca, there is a vast number who really, let's be perfectly honest, aren't that bothered. And when they are in all-inclusives, their chances of being bothered are significantly lessened. What do advocates suggest? Bussing in loads of locals for the inmates of an all-inclusive to goggle at?

For less-developed parts of the tourism world, there are clear benefits from increasing the volume of tourism so long as this increase stays in harmony with the environment and the needs of the local people. For developed parts, increasing volume runs counter to principles of sustainability/responsbility. The creative or smart tourist destination in the developed world should not be aiming to add more tourists willy-nilly. Instead, it should seek tourists who will maximise economic benefits while keeping social and environmental costs to a minimum.

The argument goes that destinations such as Mallorca have devoted too much attention to constantly increasing numbers of tourists without truly assessing economic benefits, and in the past few days there has been an admission that this is the case. Sort of. It has come from the president of the Balearics, José Ramón Bauzá. In parliament on Tuesday, Bauzá said that there was "no direct relationship between an increase in the number of tourists and variance in Balearics GDP". "The key", he said, was competitiveness profit or loss. Through inference, Bauzá was saying what many have said before. More tourists do not mean greater economic benefits when a proportion of tourist volume contributes little or nothing to the economy or indeed can cause a loss. This is something that has been known about for years but it is not something that politicians and others have chosen to do anything about. The increase in numbers has all they have been worried about.

What Bauzá was saying comes back to a governmental desire for more "quality" tourists, but this does not mean more tourists in total. It means the opposite, and former tourism minister Carlos Delgado, in not so many words, once said as much. But while Bauzá and the PP have sought this course, we now have, repeated this week, the desire of the Mallorcan left-wing for a tourism that will permit "shared prosperity" for the people of the Balearics. From both right and left and so from different political starting-points, a common view appears to be emerging - that the islands' tourism model has to change, and it is a change that may well entail fewer tourists and not more.

Into all of this came an intervention from Gabriel Escarrer of Melià. He said that "the Balearics have to become the elite destination in the Mediterranean": not an elite destination, the elite destination. Meliá is committing itself to ever greater quality, as is the case with the Calvia Beach Resort. This commitment, says Sr. Escarrer, is one that emphasises differentiation from other destinations and - that word again - sustainability. But if Meliá's vision were to be embraced wholeheartedly and were, therefore, Mallorca to be propelled towards tourist elitism, the consequence is clear. It would result in fewer tourists. The current mass could not be converted into the type of tourist that Meliá (and the government) has in mind. And it most certainly could not be converted in this way while lousy and outdated all-inclusives remain.

By the coincidence of Catalonia and its Biosphere and of what Bauzá and Escarrer have said, this past week has encapsulated where Mallorca might be heading. While it is Catalonia that is seeking the Biosphere certificate, it can be certain that a close eye will be kept on that. And if Catalonia were to conclude that entering the Biosphere means sustainability and responsibility through fewer tourists, then others may well draw the same conclusion.