In February 2011 a news story that did the rounds dealt with a visit paid by inspectors from the Balearics tourism ministry to an apartment in Santa Ponsa. It was occupied by Russian tourists who had booked the apartment via a British website and had paid 4,500 euros for a fully equipped flat with various services including the use of a private pool. The inspectors went to a different apartment, one that had been advertised on the internet as a "luxurious" property, and there a British couple was renting it for 820 euros. Then they went to another apartment, this time in Illetes, where a family of five was paying 6,000 euros for two weeks rental. The inspectors didn't bother going to a house in Santa Ponsa about which German tourists had posted a review on the internet. The tourists' experience of the house couldn't have been better. They spoke about it as though it were a hotel and gave it a glowing recommendation.
The first of these inspections was the one that really drew the attention. The owners were liable to a fine of 30,000 euros. The apartment, as with the other properties, was being offered for rent illegally.
It is important to look at the date. February 2011. Almost a year and a half before the new tourism law in the Balearics was passed. It is also important to bear in mind what was explained at the time. The infractions that the inspectors had discovered, all of them in fact during 2010, contravened Article 72.3 of the general tourism law. The previous law. This stated that "the publicising, contracting or commercialisation of establishments, activities or businesses which do not have the required tourist authorisations" will be considered serious infringements of the law.
The 2012 tourism law merely reinforced what already existed in Balearics legislation. There are plenty of people who will know that this was the case, but to gauge the reactions in the wake of the reform of the national tenancy act, you might think that penalising owners of private accommodation was somehow new. It most certainly is not.
This reform strengthens the hand of the regional government but it doesn't fundamentally alter a situation that has obtained for years. But only now, or so it seems, are strong voices of opposition to the government's stance being raised by bodies other than owners themselves.
Much as I applaud the Chamber of Commerce having weighed in to the debate, I have a question: where has it been all these years? And the same question applies to the restaurant sections of the business association CAEB and of the small to medium-sized businesses organisation PIMEM. It also applies to the Balearics wing of the PSOE socialist party. Where have any of them been and why have they not raised stronger objections in the past?
And the past is worth taking into account. When was Article 72.3 set in legislative stone? The answer is 1999. The law was passed a couple of months before the elections that year; elections that saw PSOE form its first ever government in the Balearics. So, let's ask another question. Why did PSOE, if it is now against the stance on private accommodation, not seek a reform of this part of the tourism law during either its 1999-2003 or 2007-2011 administrations? Take note: the actions of the tourism inspectors were in 2010, when PSOE was in power.
There's a further question. 26 September 2006 was a not unimportant date in the history of Mallorca's rental accommodation. It was the deadline by which properties had to be registered as either tourist or residential lets. There was a category of accommodation which couldn't be registered as tourist lets. Private apartments. Why did PSOE not raise an almighty fuss about this at the time?
Political opportunism probably explains why PSOE has now jumped on the bandwagon in opposing the government's position, but this doesn't explain why business associations have seemingly been so mute in the past.
Better late than never, but business, other than the highly organised hotels, has failed until relatively recently to show its muscle in anything like a co-ordinated and assertive fashion. Where holiday rentals are concerned, the penny has finally dropped and made a loud clanging noise of the damage that can be caused to businesses that form the non-hotel complementary offer. Previous silence can probably be attributed to indifference, complacency or lack of organisation. The noise now can be attributed to an awful realisation that members' interests could be harmed. It's a welcome noise, but why has it taken so long for it to be made?
Any comments to andrew@thealcudiaguide.com please.
Showing posts with label Private apartments. Show all posts
Showing posts with label Private apartments. Show all posts
Wednesday, August 07, 2013
Tuesday, August 06, 2013
MALLORCA TODAY - PSOE adds to support for relaxation in Balearics' rules on holiday apartment rentals
The PSOE-PSIB socialist party has added its voice to those of the Chamber of Commerce and now also the business associations CAEB and PIMEM in calling on the Balearic Government to think again about its prohibition of the rental of private apartments as holiday rentals.
See more: Diario de Mallorca
See more: Diario de Mallorca
Saturday, August 03, 2013
The Chamber Of Common Sense: Holiday rentals
The Chamber of Commerce in Mallorca and the Balearics is a body which deserves to have greater prominence and which deserves to be listened to rather more closely than it perhaps is. This is an organisation which in the past has produced one of the most informative and insightful reports into tourism (which it did in 2003) and an organisation which drew into serious question government estimates for passenger use on the eastern-coast Manacor to Artà railway. While it wasn't against the railway, it addressed the pure business case and found it wanting. Amid all the arguments over finance having been withdrawn for the railway and over its abandonment, nowhere have these arguments ever referred to what was an independent report which, had it been given proper attention, would have questioned the wisdom of ever proceeding with it.
The Chamber cannot be totally independent in that it does have business interests to consider, but it is a very much more independent body than the government or some of the business associations which represent specific sectors. It also tends to ally itself with a group known as the Economy Circle, one comprising leading businesspeople and which boasts as its various member companies banks, consultants, retailers, wine traders and even the odd hotel chain.
The Chamber of Commerce and the Economy Circle are unusual in Mallorcan business in being voices of sense, and the latest example of this sense has come from the Chamber of Commerce. It has to do with the rental of private apartments as tourist accommodation. Its president has written to tourism minister Carlos Delgado and outlined the serious harm that the demonising of private apartment rental will have and is already beginning to have. He sees the impact that the witch-hunt against holiday rentals will have. It is an impact that should be transparently obvious, but it appears not to be, to the government at any rate.
The Chamber's president points out that tourists may opt to go elsewhere, such as to Catalonia. Why Catalonia? Isn't there a crackdown on private apartments there as well? If you believe some media reporting, then there is, but this is a misunderstanding. Catalonia has a tourist tax, and the government there wants to properly register accommodation in order that it can apply the tax. Far from cracking down, Catalonia is in fact opening up. It is a region where there is an appreciation as to revenues that can be derived, which is the opposite to the Balearics, where a toothless government, controlled by the hotel industry, acts in a vindictive and myopic fashion.
What is interesting about the Chamber of Commerce's intervention is that it establishes that, other than disgruntled property owners, there is in fact a whole range of business interests opposed to the rules on holiday rentals. These include the powerful supermarket lobby, already at loggerheads with the government over its green taxes. For the first time, one senses that a genuine opposition is being mounted to the government over tourist apartments, an opposition which isn't that of what might be perceived as tax-fiddling owners but of those who are capable of impressing upon the government an economic and business case for adopting a different posture.
To the Chamber of Commerce can be added certain mayors who are only too aware of the potential damage that might be caused to their own local economies were there to be a withdrawal from the market of much accommodation or a decision made by tourists to head to alternative destinations within Spain that take a different view to that of the Balearic Government. There is, one feels, a groundswell of opposition that the government will find hard to fob off.
One can probably expect, as a result of the Chamber's intervention, that the hoteliers will go into propaganda mode, lamenting occupancy figures (which will not be anything like as bad as they make out) and decrying the lack of standards, the unfair competition and the tax fraud that the private accommodation sector, in their view, represents. They will do so, because this is what they habitually do. But even if they do not, for the government to ignore what powerful sectors of Mallorca's business are saying and to so ignore the Chamber of Commerce will only serve to emphasise what is widely understood to be the case - that the government acts firstly and almost exclusively in favour of the hoteliers. The government will, therefore, be exposed as not having the full interests of the tourism industry or of the Mallorcan economy at heart.
Any comments to andrew@thealcudiaguide.com please.
The Chamber cannot be totally independent in that it does have business interests to consider, but it is a very much more independent body than the government or some of the business associations which represent specific sectors. It also tends to ally itself with a group known as the Economy Circle, one comprising leading businesspeople and which boasts as its various member companies banks, consultants, retailers, wine traders and even the odd hotel chain.
The Chamber of Commerce and the Economy Circle are unusual in Mallorcan business in being voices of sense, and the latest example of this sense has come from the Chamber of Commerce. It has to do with the rental of private apartments as tourist accommodation. Its president has written to tourism minister Carlos Delgado and outlined the serious harm that the demonising of private apartment rental will have and is already beginning to have. He sees the impact that the witch-hunt against holiday rentals will have. It is an impact that should be transparently obvious, but it appears not to be, to the government at any rate.
The Chamber's president points out that tourists may opt to go elsewhere, such as to Catalonia. Why Catalonia? Isn't there a crackdown on private apartments there as well? If you believe some media reporting, then there is, but this is a misunderstanding. Catalonia has a tourist tax, and the government there wants to properly register accommodation in order that it can apply the tax. Far from cracking down, Catalonia is in fact opening up. It is a region where there is an appreciation as to revenues that can be derived, which is the opposite to the Balearics, where a toothless government, controlled by the hotel industry, acts in a vindictive and myopic fashion.
What is interesting about the Chamber of Commerce's intervention is that it establishes that, other than disgruntled property owners, there is in fact a whole range of business interests opposed to the rules on holiday rentals. These include the powerful supermarket lobby, already at loggerheads with the government over its green taxes. For the first time, one senses that a genuine opposition is being mounted to the government over tourist apartments, an opposition which isn't that of what might be perceived as tax-fiddling owners but of those who are capable of impressing upon the government an economic and business case for adopting a different posture.
To the Chamber of Commerce can be added certain mayors who are only too aware of the potential damage that might be caused to their own local economies were there to be a withdrawal from the market of much accommodation or a decision made by tourists to head to alternative destinations within Spain that take a different view to that of the Balearic Government. There is, one feels, a groundswell of opposition that the government will find hard to fob off.
One can probably expect, as a result of the Chamber's intervention, that the hoteliers will go into propaganda mode, lamenting occupancy figures (which will not be anything like as bad as they make out) and decrying the lack of standards, the unfair competition and the tax fraud that the private accommodation sector, in their view, represents. They will do so, because this is what they habitually do. But even if they do not, for the government to ignore what powerful sectors of Mallorca's business are saying and to so ignore the Chamber of Commerce will only serve to emphasise what is widely understood to be the case - that the government acts firstly and almost exclusively in favour of the hoteliers. The government will, therefore, be exposed as not having the full interests of the tourism industry or of the Mallorcan economy at heart.
Any comments to andrew@thealcudiaguide.com please.
Friday, August 02, 2013
MALLORCA TODAY - Chamber of Commerce calls for government to relax rules prohibiting holiday apartment rental
The president of the local Chamber of Commerce has written to Balearics tourism minister Carlos Delgado to express concern about the impact of regional government legislation that does not permit the commericalising of private apartments for holiday rental. He points to the value of this type of accommodation to the general economy and fears that prohibition will lead to a flight of tourists to other regions of Spain, such as Catalonia, where there are far less prohibitive measures.
See more: Diario de Mallorca
See more: Diario de Mallorca
Thursday, May 09, 2013
No Let Up: Revised tenancy act
Regulations regarding the letting of private accommodation for tourist purposes are far from straightforward. Those which relate to the rental of apartments in the Balearics are subject to both regional and national law, while there is a further dimension - a European one - which has helped to make the situation ever more confusing and unclear.
A way of justifying the legality of private rental of apartments in the Balearics has been to invoke the national tenancy law. This law, as it related to tourist accommodation, was, though, brought into question by the European services directive; the status of such accommodation has, as such, been one of limbo for a good three years.
Balearics law on tourist accommodation, that enshrined in the 2012 tourism law, is, or appears to be, pretty unequivocal. It states that under no circumstances can an apartment in an "edificio plurifamiliar" (an apartment block therefore) be commercialised as a property for rent to tourists. A loophole, however, has come from the tenancy act whereby an owner could argue that a property was being rented in accordance with this act. As such, so the argument has gone, local authorities in the Balearics would have been exceeding their powers had they prevented this rental or issued a fine for having done so.
The problem with this legal interpretation is that the law in the Balearics and Spain does not always follow a clear path. Regardless of what the tenancy act might or might not say (albeit that it was in limbo), an owner would have taken a risk. The tourism ministry, as one representative of the Balearics local authorities, might well (and in all likelihood would) cite Balearics law, even if a national law might contradict it. The chances then would be that the owner would have to go to considerable lengths (and expense) to challenge the Balearics law. It has been far too simplistic to argue that the tenancy act could be held up as defence, because this is not how the process tends to work when there are different authorities involved.
The Spanish Senate has now approved what is called the law on measures for the flexibility and development of the property rental market. This, for property owners, sounds quite good, but its title is misleading. Included in this, is an amendment which will limit the private rental of holiday homes and tourist apartments. In fact, what this revised law is proposing - and it has to go to Congress to get final approval before going onto the statute book - is that, while private accommodation for tourism will not be "impeded", such accommodation will be excluded from the tenancy act. Instead, regulation will be left to law as it affects tourism property in specific autonomous communities, such as the Balearics.
What will happen, therefore, is that previous resort to using the tenancy act as a defence for private rental of apartments in the Balearics will no longer be possible. The unequivocal nature of Balearics law will make the situation that much clearer. it won't make it any better for property owners, but at least some of the confusion should ebb away. One says "should", but one can never be entirely sure.
As ever with regulations regarding holiday lets, there is a great divide between the influential hotel lobby and those with property to rent. A body does exist to defend property owners. It is called Asotur, the Asociación de Viviendas de Uso Turístico. It has tried to persuade the tourism secretary of state that pressures from the hotel lobby have been unfair. The tourism secretary of state is Isabel Borrego, and she is from? The Balearics.
Data which is used by the hoteliers to justify their posture suggest that average hotel occupancy is slightly under 50% whereas occupancy of apartments is some way above 50% (at almost 57%). This, so the hoteliers argue, is evidence of unfair competition from an unregulated market. But these average figures bear little or no relation to the Balearics or to specific parts of Mallorca (Pollensa would be one). They are evidence of very little, other than, as Asotur has been at pains to point out, there being distinct markets - those for tourists who wish to stay in hotels and those who don't.
Even if Congress approves the new tenancy provisions and so therefore gives the Balearic Government virtual carte blanche to implement its own regulations, the matter probably won't end there. Asotur, which points out the degree of market liberalism which permits private rental elsewhere in Europe, is likely to go to Brussels, and it may have a strong case. The Balearics tourism law, it could well be argued, contravenes the principle of a free market for goods and services. Getting any definitive view on this, though, would take years.
Any comments to andrew@thealcudiaguide.com please.
A way of justifying the legality of private rental of apartments in the Balearics has been to invoke the national tenancy law. This law, as it related to tourist accommodation, was, though, brought into question by the European services directive; the status of such accommodation has, as such, been one of limbo for a good three years.
Balearics law on tourist accommodation, that enshrined in the 2012 tourism law, is, or appears to be, pretty unequivocal. It states that under no circumstances can an apartment in an "edificio plurifamiliar" (an apartment block therefore) be commercialised as a property for rent to tourists. A loophole, however, has come from the tenancy act whereby an owner could argue that a property was being rented in accordance with this act. As such, so the argument has gone, local authorities in the Balearics would have been exceeding their powers had they prevented this rental or issued a fine for having done so.
The problem with this legal interpretation is that the law in the Balearics and Spain does not always follow a clear path. Regardless of what the tenancy act might or might not say (albeit that it was in limbo), an owner would have taken a risk. The tourism ministry, as one representative of the Balearics local authorities, might well (and in all likelihood would) cite Balearics law, even if a national law might contradict it. The chances then would be that the owner would have to go to considerable lengths (and expense) to challenge the Balearics law. It has been far too simplistic to argue that the tenancy act could be held up as defence, because this is not how the process tends to work when there are different authorities involved.
The Spanish Senate has now approved what is called the law on measures for the flexibility and development of the property rental market. This, for property owners, sounds quite good, but its title is misleading. Included in this, is an amendment which will limit the private rental of holiday homes and tourist apartments. In fact, what this revised law is proposing - and it has to go to Congress to get final approval before going onto the statute book - is that, while private accommodation for tourism will not be "impeded", such accommodation will be excluded from the tenancy act. Instead, regulation will be left to law as it affects tourism property in specific autonomous communities, such as the Balearics.
What will happen, therefore, is that previous resort to using the tenancy act as a defence for private rental of apartments in the Balearics will no longer be possible. The unequivocal nature of Balearics law will make the situation that much clearer. it won't make it any better for property owners, but at least some of the confusion should ebb away. One says "should", but one can never be entirely sure.
As ever with regulations regarding holiday lets, there is a great divide between the influential hotel lobby and those with property to rent. A body does exist to defend property owners. It is called Asotur, the Asociación de Viviendas de Uso Turístico. It has tried to persuade the tourism secretary of state that pressures from the hotel lobby have been unfair. The tourism secretary of state is Isabel Borrego, and she is from? The Balearics.
Data which is used by the hoteliers to justify their posture suggest that average hotel occupancy is slightly under 50% whereas occupancy of apartments is some way above 50% (at almost 57%). This, so the hoteliers argue, is evidence of unfair competition from an unregulated market. But these average figures bear little or no relation to the Balearics or to specific parts of Mallorca (Pollensa would be one). They are evidence of very little, other than, as Asotur has been at pains to point out, there being distinct markets - those for tourists who wish to stay in hotels and those who don't.
Even if Congress approves the new tenancy provisions and so therefore gives the Balearic Government virtual carte blanche to implement its own regulations, the matter probably won't end there. Asotur, which points out the degree of market liberalism which permits private rental elsewhere in Europe, is likely to go to Brussels, and it may have a strong case. The Balearics tourism law, it could well be argued, contravenes the principle of a free market for goods and services. Getting any definitive view on this, though, would take years.
Any comments to andrew@thealcudiaguide.com please.
Wednesday, June 13, 2012
Finally Speaking Out: Holiday lets
The Menorcan federation of small to medium-sized businesses has asked that the Council of Menorca incorporates into the new Balearics tourism law the possibility that any property on the island that has a certificate of occupancy be made available for tourism rental.
This request comes at a time when the tourism law is going through its parliamentary process. It is a bit late in the day to now be making the request, but perhaps it is a case of better late than never. How, though, the Council of Menorca can incorporate such a measure is a good question. The period of consultation for the new law has finished, though amendments are still being made. The Council of Menorca would nevertheless have to exert an enormous amount of pressure on the Balearic Government for an amendment of this sort to be either considered, let alone adopted. The chances of it being so are virtually zero, you would have thought. Perhaps the federation is hoping that the island council might unilaterally declare such accommodation legal, which it wouldn't unless it wanted a legal battle royal with the government.
The Menorcan business federation's executive committee met earlier this month and agreed to send a letter to the president of the Council stressing that permission for the rental of private accommodation was urgently needed and essential. Its arguments in favour of holiday lets will strike you as being very familiar, as they have been made ad nauseam, so I don't intend repeating them.
Why is the Menorcan federation only now though making its request to the Council of Menorca? I'm guessing, but it may well have been stung by the not untypical and traditional early-season moans and anxieties. Businesses find there is less business and so hit out at whatever they can, usually the all-inclusives, and demand that something be done. Whatever the reason for the federation's belated request, at least it has raised its voice. Which is more than can be said for pretty much any other organisation you care to think of, including the small to medium-sized business federation in Mallorca.
The timidity, fear even you feel, shown when it comes to the holiday-let issue serves to emphasise how cowed various sectors of Balearics business, professions as well as government are by the hotel sector. This is the impression they give, at any rate. No one dares to speak up for private accommodation and no one seems willing to ask the obvious question.
I have made this point before, but I will make it again, as I would dearly love to know, as I am sure would many others, what answer tourism minister Delgado (or any other member of the government or hotel industry representative) would have to it.
On 10 August last year, the Balearics registered the highest number of people on the islands at one time: 1,890,426. The total, regular population of the islands is 1,113,114. The total number of hotel places in the Balearics (and this is a liberal estimate) is in the region of 370,000. Even allowing for temporary workers, cruise passengers and others, this meant that at the height of summer, there was a population of some 400,000 people who were not staying in hotels. So - and this is the obvious question - where were they staying? They couldn't all have been with friends.
Of course, there are plenty of legal holiday lets (the villas and other houses), but these can't explain all of the shortfall. There isn't, as far as I am aware, an accurate answer, but there is a hint of an answer in the monthly figures issued by national government. Extrapolating from these and on the basis of an average length of stay of 6.8 days (a figure from the ImagineTourism consultancy), there were, on 10 August last year, at least 100,000 people staying in rented or "other" type of accommodation (excluding their own or family properties or with friends); significantly more in fact, as this extrapolation has its own shortfall.
I would challenge the government to refute this number and challenge it also to explain where it believes all the islands' tourists should be staying. I would also challenge the hotel industry to explain how this can be unfair competition (one of its usual arguments) when it isn't in a position to meet total demand. And one further challenge to government. Try stop talking about "illegal accommodation", try stop implying criminality when few owners wish to act illegally, and try instead talking about making the illegal legal.
Menorca's business federation may have been late in speaking out, but at least it has had the courage to do so. It's about time others did as well.
Any comments to andrew@thealcudiaguide.com please.
This request comes at a time when the tourism law is going through its parliamentary process. It is a bit late in the day to now be making the request, but perhaps it is a case of better late than never. How, though, the Council of Menorca can incorporate such a measure is a good question. The period of consultation for the new law has finished, though amendments are still being made. The Council of Menorca would nevertheless have to exert an enormous amount of pressure on the Balearic Government for an amendment of this sort to be either considered, let alone adopted. The chances of it being so are virtually zero, you would have thought. Perhaps the federation is hoping that the island council might unilaterally declare such accommodation legal, which it wouldn't unless it wanted a legal battle royal with the government.
The Menorcan business federation's executive committee met earlier this month and agreed to send a letter to the president of the Council stressing that permission for the rental of private accommodation was urgently needed and essential. Its arguments in favour of holiday lets will strike you as being very familiar, as they have been made ad nauseam, so I don't intend repeating them.
Why is the Menorcan federation only now though making its request to the Council of Menorca? I'm guessing, but it may well have been stung by the not untypical and traditional early-season moans and anxieties. Businesses find there is less business and so hit out at whatever they can, usually the all-inclusives, and demand that something be done. Whatever the reason for the federation's belated request, at least it has raised its voice. Which is more than can be said for pretty much any other organisation you care to think of, including the small to medium-sized business federation in Mallorca.
The timidity, fear even you feel, shown when it comes to the holiday-let issue serves to emphasise how cowed various sectors of Balearics business, professions as well as government are by the hotel sector. This is the impression they give, at any rate. No one dares to speak up for private accommodation and no one seems willing to ask the obvious question.
I have made this point before, but I will make it again, as I would dearly love to know, as I am sure would many others, what answer tourism minister Delgado (or any other member of the government or hotel industry representative) would have to it.
On 10 August last year, the Balearics registered the highest number of people on the islands at one time: 1,890,426. The total, regular population of the islands is 1,113,114. The total number of hotel places in the Balearics (and this is a liberal estimate) is in the region of 370,000. Even allowing for temporary workers, cruise passengers and others, this meant that at the height of summer, there was a population of some 400,000 people who were not staying in hotels. So - and this is the obvious question - where were they staying? They couldn't all have been with friends.
Of course, there are plenty of legal holiday lets (the villas and other houses), but these can't explain all of the shortfall. There isn't, as far as I am aware, an accurate answer, but there is a hint of an answer in the monthly figures issued by national government. Extrapolating from these and on the basis of an average length of stay of 6.8 days (a figure from the ImagineTourism consultancy), there were, on 10 August last year, at least 100,000 people staying in rented or "other" type of accommodation (excluding their own or family properties or with friends); significantly more in fact, as this extrapolation has its own shortfall.
I would challenge the government to refute this number and challenge it also to explain where it believes all the islands' tourists should be staying. I would also challenge the hotel industry to explain how this can be unfair competition (one of its usual arguments) when it isn't in a position to meet total demand. And one further challenge to government. Try stop talking about "illegal accommodation", try stop implying criminality when few owners wish to act illegally, and try instead talking about making the illegal legal.
Menorca's business federation may have been late in speaking out, but at least it has had the courage to do so. It's about time others did as well.
Any comments to andrew@thealcudiaguide.com please.
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