The price of Mallorcan holidays is going up. Or so it seems. You can judge only so much from social network comments, but when you learn of increases for packages that involve unremarkable accommodation which are anything from 300 to 2,000 euros more expensive in 2017, then the body of evidence begins to fill.
A reaction to this is that it's all to do with the UK's peculiar circumstances. Such a reaction is, however, conditioned by having a one-eyed view that it is the UK market which matters and no other. There are other markets. In June, the German media were pointing to higher prices for "Mallorca-Urlaub" in 2017.
So what's going on? It's pretty simple. There's a perfect storm driving prices up. Hoteliers upping prices. Tour operators falling over backwards to pay these prices in order to gobble up all available hotel space. (These tour operators do not, incidentally, include Spanish ones who are being totally outgunned and are struggling to find space.) These are the same tour operators which have taken hits this year not because of Mallorca or Spain but because of the well-publicised troubles elsewhere.
We've known about the hoteliers' price rises for several months. Depending on the chain or indeed the hotel, there are average increases of 15%. These rises, the hoteliers will and do argue, are the result of all their investment and hard work in renovation and upping the quality. Consequently, they can talk confidently of improved "price-quality" ratios for the punters. They can talk, but the punters don't automatically see it the same way. The tourist satisfaction survey by Gadeso in the summer indicated that this ratio has not improved. Punters are themselves being conditioned by quality expectations. Some have experienced them first hand in rival destinations. Quality of a similar or higher level and at a lower price. There's your price-quality ratio.
Until the bonanza of the past couple of years, served on a plate by the "troubles" of others, the hoteliers had been moaning about a decade or more of profits having barely increased. They had been running to stand still, such were the economics of the Mallorcan tourism market. Finally, a window opened, and up went the prices. And they are continuing to rise. In some instances by substantial amounts.
There are then hoteliers who insist that the elevated prices are the work of the tour operators. Maybe, but when the hoteliers have negotiated higher prices, what are the tour operators expected to do? Put the price down? It is troubling, though, to learn that major tour operators have been holding back on paying hoteliers' invoices this summer. The only reason that can be offered is the knock-on negative effect on tour operator business from cancellations to the troubled regions. Has Mallorca, therefore, been eyed up as one of the destinations where losses this year can be recouped next year?
One of the great ironies of all this, and again one can find evidence of this on social networks, is that punters, rather than abandoning Mallorca for other shores, are opting for a change. Which means private rentals. So, the hotels put their prices up and drive the client base into the hands of the enemy and into the devil's work that is Airbnb. A crunch may come, where the punter is concerned, when the enemy seeks to profiteer and ups its prices by a few hundred euros.
A further irony may just be that the hoteliers end up doing the regional government's work for them. The government sees price engineering (the tourist tax) as a means of keeping a lid on tourist numbers. The hoteliers are thus, if they're not careful, engaging in the same tactic. There will always be a further argument, one with some justification, that other destinations don't have the capacity that Mallorca has. Another argument is that the holiday is a "necessity". Price matters only so much. Capacity or price, eventually something has to give.
While the UK market does indeed have its peculiarities, so also do other markets. If one ever delves into those tourist spending stats, what one finds is the way in which spending varies significantly across markets. It's not because the Swedes, Norwegians (or even more so, the Russians) are handing out more folding notes in the island's bars and restaurants, it's because the average cost of the actual holidays is way higher than a British holiday: it can range from 25% to 50% more. And none of these other markets will be immune from the scramble for hotel places and the consequent increases.
Celesti Alomar, the tourism minister responsible for the first ecotax, said of that tax that it was a means of Mallorca not engaging in a price war with cheap destinations. Quality was all, and that meant higher prices. He seems to finally be getting his wish.
Showing posts with label Price-quality. Show all posts
Showing posts with label Price-quality. Show all posts
Wednesday, October 05, 2016
Friday, August 01, 2014
The Decline In Tourist Satisfaction
Tourism, it is an obvious thing to say, is nothing without tourists. Ah yes, tourists; all too often, it seems, the last people that certain elements of the tourism industry pay any attention to. Gadeso, the Mallorcan research organisation, has to be praised for being something of a rarity. It actually surveys tourists. Hears what tourists have to say. There should be very much more of this questioning and listening. Gadeso's is one survey. Its results can be disputed, but they are nonetheless worthy of attention. They don't make for very good reading.
The Gadeso survey of tourist satisfaction is limited, this much has to be said. The number interviewed is only 400, but the organisation is confident that the number is representative and that the margin of error from its results is no more and no less than 5%. The headlining part of the latest is that satisfaction continues its downward creep. Year after year, overall contentment with Mallorca slips. Not greatly by any means, but it slips all the same.
If you go through the survey, there are winners and losers as far as tourists are concerned. The biggest losers are the hotels and the complementary offer, i.e. the non-hotel sector. The biggest winners are agrotourism, rural hotels and residential private accommodation. The hoteliers will hate the fact that the latter of these has a higher satisfaction rating. They should also hate the fact that were it not for these three sectors of the industry, satisfaction with Mallorca would be very much lower. Agrotourism and rural hotels beat regular tourist hotels by almost two points out of ten.
The complementary offer, split into five components for the purpose of the survey, fares just as badly as the hotels. The greatest satisfaction is reserved for services on beaches and for recreational activities, though both of these show a downward trend. It is gastronomy, used here in a general way to refer to bars and restaurants, that shows one of the largest falls in satisfaction. Put alongside an overall rating of only three out of ten for the price-to-quality ratio for the complementary sector, you begin to get an appreciation of why satisfaction with bars and restaurants is in decline. It's all about price.
Indeed, it is price which is probably the most significant finding. The hotels, despite dissatisfaction in other ways, rate pretty well when it comes to the price-quality ratio, but Gadeso concludes that this is largely because of all-inclusive. Price is the prime motivation for coming to Mallorca. It rates almost 16 percentage points above sun and beach in second place. Yet, this seems curious when there appears to be dissatisfaction with prices in bars and restaurants. It isn't curious when you throw all-inclusives into the mix, and of those in the survey who had booked all-inclusive in Mallorca, almost 60% had done so for the first time this summer. Price, price, price.
This doesn't necessarily mean that these tourists will be returning. All-inclusive package holidaymakers say that it would depend both on the resort and the characteristics of the hotel, and what is meant by these characteristics is that some hotels simply don't seem to have made adequate preparation for offering all-inclusive. There is also the question as to where they are located. The intention among tourists to be repeat visitors to Mallorca has fallen by four percentage points over the past two years. The intention to be repeat visitors to the same tourism zone is as low as 16.4%. Why? The nature of many resorts, i.e. their maturity and/or obsolescence. It might seem perverse that all-inclusive holidaymakers should care that much about the state of the resorts, given the assumption that many don't go out of the hotel grounds, but they do.
There are other findings which should make the island's tourism industry take note. Levels of cleanliness are considered to be deficient. Levels of acoustic contamination - noise, in other words - are too great. And, cutting to the bone of the notion that Mallorca is a destination for cultural tourism, cultural facilities are found to also be deficient. As Gadeso says at the start of its report that there is "the necessity to improve our product". It's hard to argue with the statement.
The Gadeso survey of tourist satisfaction is limited, this much has to be said. The number interviewed is only 400, but the organisation is confident that the number is representative and that the margin of error from its results is no more and no less than 5%. The headlining part of the latest is that satisfaction continues its downward creep. Year after year, overall contentment with Mallorca slips. Not greatly by any means, but it slips all the same.
If you go through the survey, there are winners and losers as far as tourists are concerned. The biggest losers are the hotels and the complementary offer, i.e. the non-hotel sector. The biggest winners are agrotourism, rural hotels and residential private accommodation. The hoteliers will hate the fact that the latter of these has a higher satisfaction rating. They should also hate the fact that were it not for these three sectors of the industry, satisfaction with Mallorca would be very much lower. Agrotourism and rural hotels beat regular tourist hotels by almost two points out of ten.
The complementary offer, split into five components for the purpose of the survey, fares just as badly as the hotels. The greatest satisfaction is reserved for services on beaches and for recreational activities, though both of these show a downward trend. It is gastronomy, used here in a general way to refer to bars and restaurants, that shows one of the largest falls in satisfaction. Put alongside an overall rating of only three out of ten for the price-to-quality ratio for the complementary sector, you begin to get an appreciation of why satisfaction with bars and restaurants is in decline. It's all about price.
Indeed, it is price which is probably the most significant finding. The hotels, despite dissatisfaction in other ways, rate pretty well when it comes to the price-quality ratio, but Gadeso concludes that this is largely because of all-inclusive. Price is the prime motivation for coming to Mallorca. It rates almost 16 percentage points above sun and beach in second place. Yet, this seems curious when there appears to be dissatisfaction with prices in bars and restaurants. It isn't curious when you throw all-inclusives into the mix, and of those in the survey who had booked all-inclusive in Mallorca, almost 60% had done so for the first time this summer. Price, price, price.
This doesn't necessarily mean that these tourists will be returning. All-inclusive package holidaymakers say that it would depend both on the resort and the characteristics of the hotel, and what is meant by these characteristics is that some hotels simply don't seem to have made adequate preparation for offering all-inclusive. There is also the question as to where they are located. The intention among tourists to be repeat visitors to Mallorca has fallen by four percentage points over the past two years. The intention to be repeat visitors to the same tourism zone is as low as 16.4%. Why? The nature of many resorts, i.e. their maturity and/or obsolescence. It might seem perverse that all-inclusive holidaymakers should care that much about the state of the resorts, given the assumption that many don't go out of the hotel grounds, but they do.
There are other findings which should make the island's tourism industry take note. Levels of cleanliness are considered to be deficient. Levels of acoustic contamination - noise, in other words - are too great. And, cutting to the bone of the notion that Mallorca is a destination for cultural tourism, cultural facilities are found to also be deficient. As Gadeso says at the start of its report that there is "the necessity to improve our product". It's hard to argue with the statement.
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