"Arrogant ostentation of the super-rich." "These people think they rule the world." "Louts, go home."
The first two of these quotes were words spoken by local people. The third was a slogan on a banner. They didn't come from Mallorca but from Sardinia. They were expressed eight years ago. I had quoted them then under a piece entitled "Careful What You Wish For".
Mallorca has and has had a reputation for being what cliché and convention require calling a millionaire's playground. However, the noughts now need amending: billionaire rather than mere millionaire. For the latter, and even for those who have failed to acquire six noughts to their names, comparatively modest displays of wealth can be found bobbing up and down on Balearic waters at any time during summer. And why not. Here is a bedrock market for the nautical industry. Here is aspiration afloat. There's nothing wrong with it. Mostly, it's all good, save perhaps for the odd sea-grass meadow that is ripped by an anchor or for the garbage that is nonchalantly tossed overboard.
This bedrock market is not in the same stratosphere as the super league. The quotes from eight years ago are echoing. Will there be a barrage of wet sand hurled in the general direction of the super league's exclusive membership? There was in Sardinia. Locals took aim at Flavio Briatore and the dinghies which were disgorging his entourage. Beach invasion Italian style. Now it's beach invasion Mallorcan style. Flavio is not among the invaders, but just as in Sardinia there are the Russians. And there are others, such as Hamdan bin Zayed bin Sultan Al Nahyan, fourth son of the founder of the United Arab Emirates. He and the up to sixty invited ones have been occupying 142 metres of sea. To put that into context, it is two-thirds the maximum length of cruise ship that Alcudia's port can accommodate. Modest it is not.
Photos of the "privatisation" of a beach in Cabrera have stirred up some outrage. Among those who have taken issue is the bio-outraged director general for biodiversity, Caterina Amengual. The agents of the environment ministry will be pressing for sanctions. Even if they can in fact be applied, they may as well save themselves the cost of administering the sanctions' process. It would probably equate to more than the slightly less than one thousand euros that could be charged. When you're hiring a superyacht for 65 grand a day, this would hardly represent a deterrent.
The usual suspects have been mobilised. GOB says that there can be no repeat of the "beach club" of Cabrera being mounted elsewhere (or even in Cabrera once more). Eco-nationalists Més are demanding that competences of the national Costas Authority are directly devolved in order to prevent similar "privatisation". And then what? Increase the fines to around two grand?
While the poor everyday tourist - and he or she is in penury compared with the superyachting fraternity - is slagged off for having the audacity for saturating the island (mainly Palma), here is this brigade of invaders who are held in thrall (both they and the floating palacetes) by an element of Mallorcan society which delights at its obscene ostentation and at its purchasing capacity; one that allows it to hoover up the contents of emporia along the Born and Jaume III and still have some spare change to hand over for a beachside luxury villa replete with helipad and Olympic-sized pool.
But should these invaders be the recipients of opprobrium? In the case of the odd Russian oligarch taking over beach space and employing goons to keep the riff-raff away (are they tooled up, do you suppose?), then most definitely yes. In general, however, they are a consequence of being careless in what is wished for. There may indeed be wealth to be distributed and all-year jobs to be had - not to be sniffed at, it should be said - but this is the extreme end of the search for the Holy Grail of quality tourism. It is a mainly anti-social class utterly divorced from mainstream Mallorca but one perhaps inadvertently coveted by the island's left-wing. The political left (and right, it should be pointed out) sees virtue only in "quality" tourists, thus excluding a common, working element that might be deemed more characteristic of socialist principles.
What about the everyday Mallorcan? Bombarded with a news diet of touristic saturation, he or she now has to contend with images of a Balinese poolside having been deposited on a beach in the protected nature park of Cabrera. He or she could be forgiven for believing that the island(s) are being irretrievably lost to foreign empires that are on the one hand all-inclusive and on the other all-exclusive. Might there be a barrage of wet sand? Bet they'd fine them more than a grand if there was.
Index for August 2016
Cala San Vicente - 21 August 2016
Education failings in Mallorca - 10 August 2016
Holi colour festivals - 19 August 2016
Holiday compensation claims - 24 August 2016
Holiday rentals' legislation - 13 August 2016
Innovation and technology in Mallorca - 26 August 2016
José Hila in Palma - 5 August 2016
Low Cost Travel Group - 6 August 2016
Low-quality tourism and accommodation - 2 August 2016, 12 August 2016
Mallorca nationalism - 18 August 2016
Mallorca plain and Lloret - 7 August 2016
Mariano Rajoy and government - 22 August 2016, 30 August 2016
Més, Emaya and Palma - 14 August 2016
Moors and Christians, Pollensa - 1 August 2016
Partido Popular and language - 16 August 2016
Plaça Espanya - 9 August 2016
Police corruption and politicians - 25 August 2016, 29 August 2016
Royal family in Mallorca - 8 August 2016
Sant Joan and the seven sins demons - 28 August 2016
Sant Roc - 15 August 2016
Shopping centres - 4 August 2016
Sineu's Much fiesta - 11 August 2016
Superyachts and use of beaches - 31 August 2016
Sustainable tourism awards - 23 August 2016
Tourism sustainability - 27 August 2016
Tourist satisfaction - 3 August 2016
Tourist saturation / overcrowding - 17 August 2016, 20 August 2016
Showing posts with label Privatisation. Show all posts
Showing posts with label Privatisation. Show all posts
Wednesday, August 31, 2016
Wednesday, March 11, 2015
Limits To Exploiting The Beaches?
Old photos. There are several social media blogs which dedicate themselves to old photos of Mallorca. They spark off nostalgia for times past. They show people, buildings, streets, vehicles, landscapes. All of them are of interest, but arguably the greatest interest - certainly for tourists to Mallorca - is reserved for the photographic histories of the resorts: the changes to the front lines, the hotels which have gone or have remained, the beaches as they were. The tourist, by the very nature of Mallorca's dominant sun and beach tourism, invests emotion most heavily in the resorts: they are the tourist's domain, the tourist's memories, the tourist's past, present and future.
Of some of these photos, there are those which show how beaches were in the days just prior to the tourism explosion and once the explosion had occurred. The contrasts are predominantly those of bodies and of what bordered the beaches. There is a particular one for Palmanova. It is not certain when it was taken, but probably in the 1950s. Absent is the development, absent is a crowded beach. But on the beach, or rather off it - as in the sea - is what might seem to be an oddity. It is a pedalo.
While it is reckoned that Leonardo da Vinci may have "invented" the pedalo, its mechanics were, much later, adapted from those of the paddle steamer. That there was, therefore, a pedalo in the fifties' photo should not be odd, but somehow it does seem odd. I mean, beaches were just beaches then. Weren't they? Beachgoers made their own fun without the aid of the beach attraction.
The pedalo can probably lay claim to having been the pioneer of such attractions and its iconic status was such that, when the first "WIsh You Were Here" was broadcast (1974), what else would Judith Chalmers be sitting on, drinking champagne at Magalluf beach than a pedalo.
But by the time of that broadcast another attraction was making itself known. It was altogether more powerful and noisier. The jet ski had arrived. It shared its name with a brand of tourist divorced from the mass hoi polloi, the jet set, and as such became de rigueur for the TV and cinema of spies and socialites who headed for the Riviera and were normally always played by Roger Moore and Sophia Loren.
Pioneer that the pedalo was, it was not responsible for introducing artificiality to beaches. There was plastic in ever increasing abundance, a perversely natural consequence of the ever increasing levels of humanity that invaded the beaches. But it was essentially benign. A pedalo doesn't make any noise. A jet ski, on the other hand, does. A pedalo requires only human leg power. A jet ski does not.
Coming up to the present day, there is a growing debate regarding the use of beaches and sea that centres on ever more plastic and ever more noise. And Colonia Sant Jordi is where this debate is currently at its most fierce. Last Sunday, around a hundred residents of the resort staged a protest against the plan to install a floating waterpark and to permit two platforms for jet skis. Their objection does have an element of antagonism towards a Spanish (and so not Mallorcan) operator and a French one, but there is also concern about environmental harm, noise pollution and the sight of the waterpark.
Such waterparks have emerged recently in different resorts and they haven't been greeted with overwhelming support from residents and tourists. But how strong is this opposition? While some tourists might object, others doubtless approve. However the feelings are either way, the Colonia Sant Jordi case highlights a broader debate. Just how much "exploitation" of beaches and the sea should there be?
There are plenty of rules intended to safeguard beaches and there are plenty of initiatives, like the Blue Flag, to ensure quality. Yet there is a great deal of "privatisation" of beaches and the sea immediately by them. This is privatisation in the widest sense, i.e. private enterprises operating businesses, but it is something which rubs against deep-rooted feelings held by many a Mallorcan (and indeed Spaniard). Beaches, state-owned, are in the public domain. They are for the public to enjoy. This enjoyment, the complaint is made, is reduced by the excesses of privatisation, be these too many sun loungers that limit the use of the public domain, noise or multi-coloured plastic slides bobbing up and down on the sea.
And to these residents can be added the tourists with a sense of a shared common birthright to the simpler pleasures of what, in tourism terms, constitute Mallorca's greatest natural resource. But then maybe the exploitation is necessary. Gone are the days, it would seem, when all beachgoers could make their own fun. With or without the aid of a pedalo.
Of some of these photos, there are those which show how beaches were in the days just prior to the tourism explosion and once the explosion had occurred. The contrasts are predominantly those of bodies and of what bordered the beaches. There is a particular one for Palmanova. It is not certain when it was taken, but probably in the 1950s. Absent is the development, absent is a crowded beach. But on the beach, or rather off it - as in the sea - is what might seem to be an oddity. It is a pedalo.
While it is reckoned that Leonardo da Vinci may have "invented" the pedalo, its mechanics were, much later, adapted from those of the paddle steamer. That there was, therefore, a pedalo in the fifties' photo should not be odd, but somehow it does seem odd. I mean, beaches were just beaches then. Weren't they? Beachgoers made their own fun without the aid of the beach attraction.
The pedalo can probably lay claim to having been the pioneer of such attractions and its iconic status was such that, when the first "WIsh You Were Here" was broadcast (1974), what else would Judith Chalmers be sitting on, drinking champagne at Magalluf beach than a pedalo.
But by the time of that broadcast another attraction was making itself known. It was altogether more powerful and noisier. The jet ski had arrived. It shared its name with a brand of tourist divorced from the mass hoi polloi, the jet set, and as such became de rigueur for the TV and cinema of spies and socialites who headed for the Riviera and were normally always played by Roger Moore and Sophia Loren.
Pioneer that the pedalo was, it was not responsible for introducing artificiality to beaches. There was plastic in ever increasing abundance, a perversely natural consequence of the ever increasing levels of humanity that invaded the beaches. But it was essentially benign. A pedalo doesn't make any noise. A jet ski, on the other hand, does. A pedalo requires only human leg power. A jet ski does not.
Coming up to the present day, there is a growing debate regarding the use of beaches and sea that centres on ever more plastic and ever more noise. And Colonia Sant Jordi is where this debate is currently at its most fierce. Last Sunday, around a hundred residents of the resort staged a protest against the plan to install a floating waterpark and to permit two platforms for jet skis. Their objection does have an element of antagonism towards a Spanish (and so not Mallorcan) operator and a French one, but there is also concern about environmental harm, noise pollution and the sight of the waterpark.
Such waterparks have emerged recently in different resorts and they haven't been greeted with overwhelming support from residents and tourists. But how strong is this opposition? While some tourists might object, others doubtless approve. However the feelings are either way, the Colonia Sant Jordi case highlights a broader debate. Just how much "exploitation" of beaches and the sea should there be?
There are plenty of rules intended to safeguard beaches and there are plenty of initiatives, like the Blue Flag, to ensure quality. Yet there is a great deal of "privatisation" of beaches and the sea immediately by them. This is privatisation in the widest sense, i.e. private enterprises operating businesses, but it is something which rubs against deep-rooted feelings held by many a Mallorcan (and indeed Spaniard). Beaches, state-owned, are in the public domain. They are for the public to enjoy. This enjoyment, the complaint is made, is reduced by the excesses of privatisation, be these too many sun loungers that limit the use of the public domain, noise or multi-coloured plastic slides bobbing up and down on the sea.
And to these residents can be added the tourists with a sense of a shared common birthright to the simpler pleasures of what, in tourism terms, constitute Mallorca's greatest natural resource. But then maybe the exploitation is necessary. Gone are the days, it would seem, when all beachgoers could make their own fun. With or without the aid of a pedalo.
Tuesday, February 24, 2015
When Canaries Sing Rebel Songs
Spain's awkward squad has just got bigger. The latest member to join the rebel souls of Catalonia and the are-they-aren't-they's in the Basque Country is the Canary Islands which, cast adrift in the Atlantic, originally Berber African rather than Spanish, were not fully brought under the control of Castile until 1495, a necessity to facilitate the use of the islands as a stopover for Columbus's voyages. The distance from Spain makes the Canaries a curiosity of colonialism contemporised within a framework of nationhood; it's as though Iceland were a part of the UK or was still a dependency of Denmark. Far away, there is none of the geographical umbilicism that hauls the Balearics towards Barcelona and Valencia while the political cord - the current one - has been twisted; accord between Santa Cruz and Las Palmas and Madrid has been ruptured, whereas the bond between Palma and Madrid remains, generally, harmonious.
One says generally, but the Balearics have their disagreements with Madrid. Financing and oil are the two most prominent, but presidential protests are ones that play to a Balearics gallery with a plot hidden behind the act; Bauzá's ambitions to tread the corridors of Madrid power may still exist, even if they have been weakened by too much hamming it up to his Balearics audience and by his being Brutus to the Madrid-admired Caesar of Mateo Isern. By contrast, the president of the Canaries, Paulino Rivero, has no such need for the duplicitousness of the staged political plot as he owes no debt to masters in Madrid. Paulino, his party - the Coalición Canaria - indeed the whole of Canaries politics at present are symbolic of the islands' remoteness; they are as though there has been a separate development.
Rivero's political interests were initially pursued within Adolfo Suarez's post-Franco democratic union coalition. He then moved on to something called the Agrupación Tinerfeña de Independientes (Tenerife independents), a party that had links to Francoism. This then became part of a Canaries-wide independence party and ultimately became what it now is - the Coalición Canaria, an unlikely conglomeration of Canaries' nationalists, ex-commies and right-wingers. Notwithstanding the former communist element, the coalition can best be described as centre-right with its unifying theme being that of Canaries' nationalism. If one were to look for a Mallorcan comparison, it would be that of the now defunct Unió Mallorquina.
Remote from the Spanish mainland, the Canaries find themselves divorced from the political mainstream in a similar fashion to Catalonia. But unlike Catalonia, there is no agitation for independence. Instead, Paulino and his nationalist coalition seek specific rebel causes. One of these had been the oil prospecting, until Repsol discovered that the oil was far from being black gold and ceased its exploration. The coalition were not left as rebels without a cause, though. They had another one. AENA.
The government in the Canaries has taken the matter of AENA's privatisation to the Supreme Court, and it has accepted the Canaries' request to look into a Canaries' demand that the privatisation is suspended. The justification for this is two-fold. One, was an acknowledgement of a lower court that a meeting of the commission overseeing affairs between the Canaries and the state had not been called to address the management of airports in the Canaries. The second was the notice that the Canaries Government had issued in July last year of a widening of powers under its statutes of autonomy in the event that the state ceases to have direct management of airports. What this all boils down to is the fact that the Canaries Government wants to have management of its eight airports, two of which - Gran Canaria and Tenerife South - are treated by AENA in the same way as Palma in that their taxes are the same.
It is difficult to see how the privatisation could be suspended given that shares are now on the market, but the court could, in principle, agree with the Canaries' argument. AENA, for its part, says that direct state management hasn't ceased because national government still holds a majority of shares. But whatever the outcome, there is a marked difference between the Canaries and the Balearics. The Bauzá government has mumbled about having management of the airports, and especially Palma, but has done absolutely nothing about it. Rivero has, and one can attribute this to the fact that, unlike Bauzá and the Balearics PP, he and his coalition are independent of Madrid. As such, one can argue that Rivero is genuinely sticking up for regional interests, whereas Bauzá merely alludes to them.
Even if the court dismisses the Canaries' claim, the point will have been made, and it is one that goes to the heart of state-regions' relationships and political associations. The Canaries can sing rebel songs, while the Balearics hum, not having the courage to sing the words.
One says generally, but the Balearics have their disagreements with Madrid. Financing and oil are the two most prominent, but presidential protests are ones that play to a Balearics gallery with a plot hidden behind the act; Bauzá's ambitions to tread the corridors of Madrid power may still exist, even if they have been weakened by too much hamming it up to his Balearics audience and by his being Brutus to the Madrid-admired Caesar of Mateo Isern. By contrast, the president of the Canaries, Paulino Rivero, has no such need for the duplicitousness of the staged political plot as he owes no debt to masters in Madrid. Paulino, his party - the Coalición Canaria - indeed the whole of Canaries politics at present are symbolic of the islands' remoteness; they are as though there has been a separate development.
Rivero's political interests were initially pursued within Adolfo Suarez's post-Franco democratic union coalition. He then moved on to something called the Agrupación Tinerfeña de Independientes (Tenerife independents), a party that had links to Francoism. This then became part of a Canaries-wide independence party and ultimately became what it now is - the Coalición Canaria, an unlikely conglomeration of Canaries' nationalists, ex-commies and right-wingers. Notwithstanding the former communist element, the coalition can best be described as centre-right with its unifying theme being that of Canaries' nationalism. If one were to look for a Mallorcan comparison, it would be that of the now defunct Unió Mallorquina.
Remote from the Spanish mainland, the Canaries find themselves divorced from the political mainstream in a similar fashion to Catalonia. But unlike Catalonia, there is no agitation for independence. Instead, Paulino and his nationalist coalition seek specific rebel causes. One of these had been the oil prospecting, until Repsol discovered that the oil was far from being black gold and ceased its exploration. The coalition were not left as rebels without a cause, though. They had another one. AENA.
The government in the Canaries has taken the matter of AENA's privatisation to the Supreme Court, and it has accepted the Canaries' request to look into a Canaries' demand that the privatisation is suspended. The justification for this is two-fold. One, was an acknowledgement of a lower court that a meeting of the commission overseeing affairs between the Canaries and the state had not been called to address the management of airports in the Canaries. The second was the notice that the Canaries Government had issued in July last year of a widening of powers under its statutes of autonomy in the event that the state ceases to have direct management of airports. What this all boils down to is the fact that the Canaries Government wants to have management of its eight airports, two of which - Gran Canaria and Tenerife South - are treated by AENA in the same way as Palma in that their taxes are the same.
It is difficult to see how the privatisation could be suspended given that shares are now on the market, but the court could, in principle, agree with the Canaries' argument. AENA, for its part, says that direct state management hasn't ceased because national government still holds a majority of shares. But whatever the outcome, there is a marked difference between the Canaries and the Balearics. The Bauzá government has mumbled about having management of the airports, and especially Palma, but has done absolutely nothing about it. Rivero has, and one can attribute this to the fact that, unlike Bauzá and the Balearics PP, he and his coalition are independent of Madrid. As such, one can argue that Rivero is genuinely sticking up for regional interests, whereas Bauzá merely alludes to them.
Even if the court dismisses the Canaries' claim, the point will have been made, and it is one that goes to the heart of state-regions' relationships and political associations. The Canaries can sing rebel songs, while the Balearics hum, not having the courage to sing the words.
Friday, February 13, 2015
AENA Privatisation: Uncertainties and unknowns
Finally, and after glitches concerning the auditor, AENA's initial public offer of shares has gone ahead. The 58 euro per share price rose on the first day of trading to over 69 euros, leaving the minister for development, Ana Pastor, a happy lady. Analysts consider it to be a strong stock, and though the price is likely to fall a little, the entry onto the Madrid stock market has been positive.
Despite the muted euphoria, there are several unknowns which cloud the AENA privatisation. One, that of union relations, has, for the time being, been placed on the back burner, the two main airport unions CCOO and USO having called off strikes that were planned from this month and through the spring and summer. Assurances have been given regarding contracts and minimum staffing levels. If the unions are now adopting a temporarily contented watching brief, not all has been rosy with the chief institutional shareholders. The belief that the privatisation might herald a phase of optimism for the Balearics has been shaken by the fact that the Banca March's investment foundation felt that the share price was too high and so has, along with Ferrovial, opted to stay out of that original core of investors and will not, therefore, be represented on the new board. Still, there has been plenty of interest from major investors such as George Soros and through sovereign funds in the Middle East, Singapore and Norway.
One of the greatest unknowns has to do with the further liberalisation of the skies and so of international airline presence at major airports, by which one means Madrid and Barcelona. Emirates, Air India, Latam Airlines are among overseas operators jostling to develop new routes and which are eyeing up Madrid in particular as a hub. There is, as a consequence, disquiet among an already emasculated Spanish airline industry that existing hub activities might be threatened; Air Europa appears especially minded to get the ear of the ministry on this matter.
And it is the relationship between the government and the 49% shareholders that provides the biggest unknown of the lot. Who ultimately will wield the power? The government may have retained a majority of shares, but how determined might it be to exercise its majority against the ambitions of others?
Coming to Mallorca and the Balearics, further development of international air routes might be thought a good thing, but only if good interconnecting schedules can be piggybacked onto routes that the likes of Emirates or Air India might desire. Otherwise, Palma looks unlikely to be a beneficiary of privatisation. This said, Ana Pastor, following the previous announcement by regional tourism minister Jaime Martínez that airport taxes will be frozen for ten years, has intimated that there may, after all, be room to manouevre in terms of lowering taxes (especially for the off-season) at Balearics airports. Airlines have naturally welcomed the suggestion, though they see in it an element of pre-election campaigning. As I have noted before, the profitability of Palma will be something that shareholders will be keen to maintain and so tax reductions would only be of interest were there a guarantee of greater profits from resultant flights.
Despite the muted euphoria, there are several unknowns which cloud the AENA privatisation. One, that of union relations, has, for the time being, been placed on the back burner, the two main airport unions CCOO and USO having called off strikes that were planned from this month and through the spring and summer. Assurances have been given regarding contracts and minimum staffing levels. If the unions are now adopting a temporarily contented watching brief, not all has been rosy with the chief institutional shareholders. The belief that the privatisation might herald a phase of optimism for the Balearics has been shaken by the fact that the Banca March's investment foundation felt that the share price was too high and so has, along with Ferrovial, opted to stay out of that original core of investors and will not, therefore, be represented on the new board. Still, there has been plenty of interest from major investors such as George Soros and through sovereign funds in the Middle East, Singapore and Norway.
One of the greatest unknowns has to do with the further liberalisation of the skies and so of international airline presence at major airports, by which one means Madrid and Barcelona. Emirates, Air India, Latam Airlines are among overseas operators jostling to develop new routes and which are eyeing up Madrid in particular as a hub. There is, as a consequence, disquiet among an already emasculated Spanish airline industry that existing hub activities might be threatened; Air Europa appears especially minded to get the ear of the ministry on this matter.
And it is the relationship between the government and the 49% shareholders that provides the biggest unknown of the lot. Who ultimately will wield the power? The government may have retained a majority of shares, but how determined might it be to exercise its majority against the ambitions of others?
Coming to Mallorca and the Balearics, further development of international air routes might be thought a good thing, but only if good interconnecting schedules can be piggybacked onto routes that the likes of Emirates or Air India might desire. Otherwise, Palma looks unlikely to be a beneficiary of privatisation. This said, Ana Pastor, following the previous announcement by regional tourism minister Jaime Martínez that airport taxes will be frozen for ten years, has intimated that there may, after all, be room to manouevre in terms of lowering taxes (especially for the off-season) at Balearics airports. Airlines have naturally welcomed the suggestion, though they see in it an element of pre-election campaigning. As I have noted before, the profitability of Palma will be something that shareholders will be keen to maintain and so tax reductions would only be of interest were there a guarantee of greater profits from resultant flights.
Friday, January 16, 2015
The Cost Of AENA Privatisation
Ryanair has been on tour in Spain this week. In Mallorca, the press was able to report the thoughts of commercial director David O'Brien. They were similar to those he had spoken in Tenerife. Ryanair, the largest airline operator in Spain in terms of passenger numbers, does things for a reason. It uses its presence to make its feelings known. In Mallorca there was all the stuff about winter flights. Yes, were landing fees and airport charges to be reduced in the off-season, then Ryanair would put on more flights from the UK and Ireland. Yes, AENA should apply differential rates for summer and winter. Yes, the Balearics should have ownership of the local airports, as decisions taken in Madrid are too distant. Ryanair said everything the local press would have wanted to hear, but Ryanair knows that none of this will happen.
In Tenerife, and so before coming to Mallorca, O'Brien had expressed his concerns about the privatisation of AENA. He said that it was likely to lead to higher airport charges, not lower. He noted that the privatisation was simply a case of swapping a publicly owned monopoly for a privately owned monopoly, which is only partly true, as the Spanish Government will keep 51%. It is true, however, as O'Brien suggested, that the privatisation process has been something of a shambles. The three key institutional shareholders, including Mallorca's Banca March, have been known for some time. They are in for 21%. The remaining 28% of shares may now finally go out for public subscription in February; there is now an auditor in place, which there hadn't been when the public sale was meant to have occurred last year.
Though the government will retain a majority of AENA shares, it will now have to take into account the requirements of its shareholders. A suggestion here that the government could simply call for a lowering of airport fees in the hope that these would bring more flights in the off-season and so more tourists, more hotels open etc. is fanciful. The development ministry, which oversees the airport infrastructure, will know that even more than before that the airports have to perform. Most of them don't. Palma airport does. Along with Barcelona, it turns in a profit way in excess of other airports in the AENA network, most of which run at a loss. The ministry is therefore interested solely in optimising airport performance and realising shareholder value; wider economic considerations are secondary.
Airport fees may indeed increase and not just because of privatisation. The Spanish airports seem likely to be operated according to the principle of the dual till in the not too distant future. This refers to the two revenue streams at an airport: those for direct airline activities and those for non-airline activities, such as car parking and retailing. Dual till would mean that the latter no longer in effect subsidise the former, and the non-airline activities are more profitable; investors are generally more interested in their value generation and not the actual airline operations.
AENA rightly point out that increasing passenger numbers (2014 has seen another record set in this regard) should offset the need for increased airport charges because of the added profit these passengers will bring, but the possibility exists that because of the shift to dual till and because of shareholder needs for a return, the charges will rise, thus dealing a blow to any potential lowering in the off-season, and especially at Palma, which is so important in the business mix of the AENA network.
What O'Brien had to say does of course make a lot of sense. The Balearics should have ownership of the airports, but this will not happen. There was a time when co-management by local government was a possibility; it surely can no longer be, thanks to privatisation. The Ryanair tour has been mainly about publicising the risk of those higher charges through a privatisation it considers to have been a mess (rightly so). It fears they will come, so as the largest operator in Spain it has been seeking to use its muscle to impress upon the government a need for restraint. As for lower charges in winter for Palma airport, they must remain highly unlikely.
In Tenerife, and so before coming to Mallorca, O'Brien had expressed his concerns about the privatisation of AENA. He said that it was likely to lead to higher airport charges, not lower. He noted that the privatisation was simply a case of swapping a publicly owned monopoly for a privately owned monopoly, which is only partly true, as the Spanish Government will keep 51%. It is true, however, as O'Brien suggested, that the privatisation process has been something of a shambles. The three key institutional shareholders, including Mallorca's Banca March, have been known for some time. They are in for 21%. The remaining 28% of shares may now finally go out for public subscription in February; there is now an auditor in place, which there hadn't been when the public sale was meant to have occurred last year.
Though the government will retain a majority of AENA shares, it will now have to take into account the requirements of its shareholders. A suggestion here that the government could simply call for a lowering of airport fees in the hope that these would bring more flights in the off-season and so more tourists, more hotels open etc. is fanciful. The development ministry, which oversees the airport infrastructure, will know that even more than before that the airports have to perform. Most of them don't. Palma airport does. Along with Barcelona, it turns in a profit way in excess of other airports in the AENA network, most of which run at a loss. The ministry is therefore interested solely in optimising airport performance and realising shareholder value; wider economic considerations are secondary.
Airport fees may indeed increase and not just because of privatisation. The Spanish airports seem likely to be operated according to the principle of the dual till in the not too distant future. This refers to the two revenue streams at an airport: those for direct airline activities and those for non-airline activities, such as car parking and retailing. Dual till would mean that the latter no longer in effect subsidise the former, and the non-airline activities are more profitable; investors are generally more interested in their value generation and not the actual airline operations.
AENA rightly point out that increasing passenger numbers (2014 has seen another record set in this regard) should offset the need for increased airport charges because of the added profit these passengers will bring, but the possibility exists that because of the shift to dual till and because of shareholder needs for a return, the charges will rise, thus dealing a blow to any potential lowering in the off-season, and especially at Palma, which is so important in the business mix of the AENA network.
What O'Brien had to say does of course make a lot of sense. The Balearics should have ownership of the airports, but this will not happen. There was a time when co-management by local government was a possibility; it surely can no longer be, thanks to privatisation. The Ryanair tour has been mainly about publicising the risk of those higher charges through a privatisation it considers to have been a mess (rightly so). It fears they will come, so as the largest operator in Spain it has been seeking to use its muscle to impress upon the government a need for restraint. As for lower charges in winter for Palma airport, they must remain highly unlikely.
Tuesday, December 16, 2014
Fifty Up: Castellón and Spain's airports
An inaugural flight was made last week. A helicopter landed at a new airport. Its occupants spent a few minutes looking around before the helicopter took off. The airport in question was that of Castellón in the Valencia region. It isn't totally accurate to say that the airport is new because it was itself inaugurated in March 2011, but forty-five months after that inauguration, the first flight - the helicopter - landed.
Of the many excesses perpetrated across Spain that only truly came to light when economic crisis engulfed the country, Castellón airport is one of the worst. It shouldn't have required public money, as the private sector was supposedly going to fund its building (a similar story to that of the disaster of Ciudad Real's airport). It has thus far cost the government in Valencia around 170 million euros, a figure that will rise to almost 200 million when a fee to be paid to the operator is factored in. This operator, the Canadian firm SNC-Lavalin, has the concession to run the airport for twenty years. It is a company which has been undergoing urgent management restructuring and establishment of corporate governance and ethics procedures. Its CEO was arrested two years ago on fraud charges.
The helicopter was able to land at the airport because the national agency for air safety, AESA, had finally granted it a licence to operate. But when the first airplanes start landing is still open to some question. Flights should start in March next year, but then flights were supposed to have started last year. They didn't, and one reason why they didn't was because the runway had to be re-built; it was too narrow. This was just one additional cost that the airport has attracted. There have been others, such as 30 million euros spent on its promotion, a sum that was revealed over two years ago. Then there is the sculpture. It cost 300,000 euros, chicken feed by comparison with some other costs, but a cost that might be added to. Will the sculpture remain? If it does, passengers, as and when they start arriving, will find a face staring out at them from the sculpture. It is the face of Carlos Fabra, ex-president of the Castellón province, who was the driving force behind the airport. Fabra started a four-year prison sentence for tax fraud on 1 December.
The airport should never have been built. A justification for it was as an alternative to Valencia's airport, which is less than an hour away to its south. But the 35,000 passengers that SNC-Lavalin believe will pass through it next year is a miniscule number when compared with over four and a half million passengers at Valencia airport in 2013. It will undoubtedly offer greater convenience for some tourists, but if, as has been said, it is expected to take fifty years to realise a return on investment, where was the wisdom? If there are indeed 35,000 passengers next year, this would place the airport in 34th place in the list of Spanish airports by passenger number (on 2013 figures). There is a vast leap in passenger numbers to the airport in 33rd position, that of El Hierro, the small island in the Canaries, which attracted almost 140,000 passengers in 2013.
Castellón would have to be added to the network of airports operated by AENA. It would bring the total to fifty. A few of these, like Son Bonet in Palma, have limited functions or are heliports rather than airports, but mostly they are airports with genuine commercial operations and Castellón would represent an additional burden for an airport network that the national minister of development, Ana Pastor, once described as "stupid and crazy". And this stupidity and craziness is something which the partially privatised AENA is going to have to get its head around. A rationalisation of the airport network has been pretty much ruled out, and Pastor admitted almost three years ago that such a rationalisation would be complicated, but what do shareholders make of an investment represented by, according to 2012 figures, an accumulated debt of over 12,600 million euros and an accumulated loss of over 70 million, a figure that would be significantly higher were it not for the profits that Palma and Barcelona turn in?
The long-term shareholders who are to acquire a 21% stake are presumably satisfied enough with their investment, but with the government retaining a 51% stake after the 28% of shares go public - delayed until at least February next year because there was no auditor in place (there now is) - room for manoeuvre in terms of network rationalisation will be limited if non-existent because the government appears not to have the political stomach for this. Small, loss-making regional airports will remain, and Castellón will be one more to add to the list.
Of the many excesses perpetrated across Spain that only truly came to light when economic crisis engulfed the country, Castellón airport is one of the worst. It shouldn't have required public money, as the private sector was supposedly going to fund its building (a similar story to that of the disaster of Ciudad Real's airport). It has thus far cost the government in Valencia around 170 million euros, a figure that will rise to almost 200 million when a fee to be paid to the operator is factored in. This operator, the Canadian firm SNC-Lavalin, has the concession to run the airport for twenty years. It is a company which has been undergoing urgent management restructuring and establishment of corporate governance and ethics procedures. Its CEO was arrested two years ago on fraud charges.
The helicopter was able to land at the airport because the national agency for air safety, AESA, had finally granted it a licence to operate. But when the first airplanes start landing is still open to some question. Flights should start in March next year, but then flights were supposed to have started last year. They didn't, and one reason why they didn't was because the runway had to be re-built; it was too narrow. This was just one additional cost that the airport has attracted. There have been others, such as 30 million euros spent on its promotion, a sum that was revealed over two years ago. Then there is the sculpture. It cost 300,000 euros, chicken feed by comparison with some other costs, but a cost that might be added to. Will the sculpture remain? If it does, passengers, as and when they start arriving, will find a face staring out at them from the sculpture. It is the face of Carlos Fabra, ex-president of the Castellón province, who was the driving force behind the airport. Fabra started a four-year prison sentence for tax fraud on 1 December.
The airport should never have been built. A justification for it was as an alternative to Valencia's airport, which is less than an hour away to its south. But the 35,000 passengers that SNC-Lavalin believe will pass through it next year is a miniscule number when compared with over four and a half million passengers at Valencia airport in 2013. It will undoubtedly offer greater convenience for some tourists, but if, as has been said, it is expected to take fifty years to realise a return on investment, where was the wisdom? If there are indeed 35,000 passengers next year, this would place the airport in 34th place in the list of Spanish airports by passenger number (on 2013 figures). There is a vast leap in passenger numbers to the airport in 33rd position, that of El Hierro, the small island in the Canaries, which attracted almost 140,000 passengers in 2013.
Castellón would have to be added to the network of airports operated by AENA. It would bring the total to fifty. A few of these, like Son Bonet in Palma, have limited functions or are heliports rather than airports, but mostly they are airports with genuine commercial operations and Castellón would represent an additional burden for an airport network that the national minister of development, Ana Pastor, once described as "stupid and crazy". And this stupidity and craziness is something which the partially privatised AENA is going to have to get its head around. A rationalisation of the airport network has been pretty much ruled out, and Pastor admitted almost three years ago that such a rationalisation would be complicated, but what do shareholders make of an investment represented by, according to 2012 figures, an accumulated debt of over 12,600 million euros and an accumulated loss of over 70 million, a figure that would be significantly higher were it not for the profits that Palma and Barcelona turn in?
The long-term shareholders who are to acquire a 21% stake are presumably satisfied enough with their investment, but with the government retaining a 51% stake after the 28% of shares go public - delayed until at least February next year because there was no auditor in place (there now is) - room for manoeuvre in terms of network rationalisation will be limited if non-existent because the government appears not to have the political stomach for this. Small, loss-making regional airports will remain, and Castellón will be one more to add to the list.
Friday, October 17, 2014
Privatising The Spanish Airports
The partial privatisation of the national airports agency, Aena, is a matter which should be of interest to us all and so not just to the millions of tourists who pass through Son Sant Joan each year. It is a privatisation which, where Palma airport is concerned, could be positive or not so positive. Son Sant Joan is the most profitable Spanish airport. Shareholders like profits and they like to see them grow and to see their dividends also grow.
It is now more accurate to talk about Enaire rather than Aena. Since July this publicly owned company has been in charge of the country's civil airports; it currently owns all the Aena shares, for which offers have been received from the private sector for an initial 21%. The remaining 28% which comprise the partial privatisation (49% of shares) are due to be offered next month. Three "core" shareholders have now been confirmed. They are Banca March, Ferrovial, which is involved with the management of several British airports, and the London-based Children's Investment Fund (TCI).
The response to the offer of this 21% shareholding was, at best, not what the government had hoped for. It would seem that the three shareholders were the only applicants. The remaining 28%, thrown open to wider public subscription, may create greater interest, but there are concerns that the lacklustre start to the privatisation process might be repeated.
A problem for Enaire/Aena is that there are so many airports which aren't profitable, and they include Madrid. There are 49 airports in all and only around a fifth of them make a profit, in addition to which there is debt which many of them have. Palma is exceptional in this regard as it carries no debt. Barcelona, on the other hand, has a similar profit level but a massive debt.
The privatisation has not been met with total approval. The CCOO union is against it, as is PSOE, which is supposedly going to attempt to paralyse the sale in Congress (quite how is not clear). The opposition is all about guarantees of jobs, but there should also be a further concern, which is what investment might be forthcoming as a consequence of privatisation. Is the sale simply a way for the government to improve its accounts? But this question aside, Palma, because of its already high performance, might benefit further. As things stand, it already in a sense gets back much of its profit through the state budget allocation. The worry might be all those airports which are a drain and which demand a diversion of investment, though this assumes that they don't get closed, and it has been argued - justifiably - that Spain has way too many airports.
One airport which is a drain is Menorca's. It runs at a substantial loss - nearly 10 million euros in 2012. It would never be closed because, unlike some airports on the mainland, it is essential both for tourists and residents. But its tourism does perhaps help to explain why it does make a loss. Menorca receives half the number of tourists that Ibiza (together with Formentera) does. Ibiza airport makes a profit, not a huge one but it is profit nonetheless and its debt is small. Menorca's isn't. Over 150 million euros in 2012. Something needs to be done about its performance, and despite crowing in the Balearics that a Mallorcan bank, March, is a shareholder and that a leading Mallorcan hotelier, Simón Barceló, is a non-executive director on the new board will mean a defence of Balearic interests, it has to be accepted that shareholders don't deal with altruism, they deal with returns on investment. Barceló's involvement is arguably the more important - as a non-exec, he would doubtless do the defending - but then both he and March are part of a much bigger business, one with all those other airports that make a loss. The Spanish Government, as majority shareholder, would find itself under fire if it were to appear that the Balearics were being favoured at the expense of smallish regional airports on the mainland. This said, the government has stated in the past that airport closure is not on the cards. Well, that remains to be seen, as indeed does the success or not of the whole share offer.
It is now more accurate to talk about Enaire rather than Aena. Since July this publicly owned company has been in charge of the country's civil airports; it currently owns all the Aena shares, for which offers have been received from the private sector for an initial 21%. The remaining 28% which comprise the partial privatisation (49% of shares) are due to be offered next month. Three "core" shareholders have now been confirmed. They are Banca March, Ferrovial, which is involved with the management of several British airports, and the London-based Children's Investment Fund (TCI).
The response to the offer of this 21% shareholding was, at best, not what the government had hoped for. It would seem that the three shareholders were the only applicants. The remaining 28%, thrown open to wider public subscription, may create greater interest, but there are concerns that the lacklustre start to the privatisation process might be repeated.
A problem for Enaire/Aena is that there are so many airports which aren't profitable, and they include Madrid. There are 49 airports in all and only around a fifth of them make a profit, in addition to which there is debt which many of them have. Palma is exceptional in this regard as it carries no debt. Barcelona, on the other hand, has a similar profit level but a massive debt.
The privatisation has not been met with total approval. The CCOO union is against it, as is PSOE, which is supposedly going to attempt to paralyse the sale in Congress (quite how is not clear). The opposition is all about guarantees of jobs, but there should also be a further concern, which is what investment might be forthcoming as a consequence of privatisation. Is the sale simply a way for the government to improve its accounts? But this question aside, Palma, because of its already high performance, might benefit further. As things stand, it already in a sense gets back much of its profit through the state budget allocation. The worry might be all those airports which are a drain and which demand a diversion of investment, though this assumes that they don't get closed, and it has been argued - justifiably - that Spain has way too many airports.
One airport which is a drain is Menorca's. It runs at a substantial loss - nearly 10 million euros in 2012. It would never be closed because, unlike some airports on the mainland, it is essential both for tourists and residents. But its tourism does perhaps help to explain why it does make a loss. Menorca receives half the number of tourists that Ibiza (together with Formentera) does. Ibiza airport makes a profit, not a huge one but it is profit nonetheless and its debt is small. Menorca's isn't. Over 150 million euros in 2012. Something needs to be done about its performance, and despite crowing in the Balearics that a Mallorcan bank, March, is a shareholder and that a leading Mallorcan hotelier, Simón Barceló, is a non-executive director on the new board will mean a defence of Balearic interests, it has to be accepted that shareholders don't deal with altruism, they deal with returns on investment. Barceló's involvement is arguably the more important - as a non-exec, he would doubtless do the defending - but then both he and March are part of a much bigger business, one with all those other airports that make a loss. The Spanish Government, as majority shareholder, would find itself under fire if it were to appear that the Balearics were being favoured at the expense of smallish regional airports on the mainland. This said, the government has stated in the past that airport closure is not on the cards. Well, that remains to be seen, as indeed does the success or not of the whole share offer.
Tuesday, April 02, 2013
MALLORCA TODAY - Mallorca ports to be privatised
The management of a total of 41 ports across the Balearics, 14 of which are managed directly in Mallorca by the regional government's Ports de Balears public company (others are under this company's responsibility but not managed directly) is to be put out to privatisation. These ports include large ones, such as Pollensa and Cala Rajada, and small ones such as Barcarés in Alcúdia.
See more: Ultima Hora
See more: Ultima Hora
Friday, January 25, 2013
The Parador Paradox
The visitor to Mallorca is unlikely to know a great deal about the Spanish "paradores". Mallorca doesn't have a parador; nor do the other Balearic islands. The Canaries have five and there is a parador in both of the north African enclaves of Ceuta and Melilla. Otherwise, the more than ninety establishments are on the mainland. All regions of Spain have at least one, except the Balearics.
The paradores are state-run hotels. Not any old hotels. They are hotels in converted buildings of historical and artistic interest, such as former castles and monasteries. They are not some cheap and cheerful, backpacker hostel-type accommodation. Anything but. They are luxury, predominantly four-star, though there are some five as well as three-star hotels. The first parador came into being in the late 1920s. The network underwent its most rapid period of expansion during the 1960s when the number of establishments doubled to 83. Nowadays, they offer in total more than 10,000 places.
The rationale behind the paradores has always been clear. They are representative of Spain's heritage and so fit with a broader concept of tourism than the usual sun and beach. Not exclusively rural, they nevertheless form part of a tourism philosophy that has always gone hand in hand with sun and beach, the cultural philosophy.
The paradores website says that the network is in the midst of its greatest growth stage since the 1960s. Fourteen more establishments are due to open in taking the total number to over a hundred. This is the plan, but the plan is unlikely to be fulfilled. The paradores are in trouble. Deep trouble. Roughly a quarter of them are included in a new plan - one of restructuring - several of them are closed temporarily and at least one will be closed permanently. Negotiations with unions regarding redundancies have been going relatively smoothly.
Take a look at any of the paradores and you can't fail to be impressed. Some are much grander than others. Santo Estevo in Galicia, for instance, is a fine building with cloisters and courtyards. One of the less grand is the Puerto Lumbreras in Murcia. This three-star Mediterranean-style house (a rather large house, it must be said) is one that will definitely be closing.
It is the grandness, though, which partly explains why the paradores are in trouble. They cost a great deal to maintain, and the state, you may have noticed, is a bit short of readies just at the moment. There is also the fact that they tend not to be cheap to stay in. In the current economic climate, they face strong competition from the less grand and less expensive and they are also subject to a downturn in the home tourism market.
The financial strains that the paradores are experiencing has brought into question their viability as state-run hotels. In a way, they are something of an anomaly in being in public-sector ownership. But then, they are also part of the nation's heritage, and the 80 or so years history of the network is not something that even the national government with its austerity measures is keen to give up.
Privatisation of sorts is going to happen, though. The government says that it is not privatisation in the purest sense. Rather, it intends to put out to tender the management of hotels with a rider that as many jobs as possible can be guaranteed. So far, however, 350 job losses have been confirmed. More restructuring may be required to salvage the network that, in 2011, lost 35 million euros and experienced a decline in occupancy to under 60%. By way of comparison, in 2004, it made a profit of 20 million and had occupancy of over 70%.
The paradores are not the only example of government-controlled accommodation having to be farmed out to the private sector. In Mallorca, for example, the island's council has bowed to the inevitable and privatised two of the refuge hostels on the Tramuntana dry-stone route; the council simply can't afford their upkeep.
In the end, the privatisation of the paradores may have to be purer than the national tourism ministry wants, so long as it can maintain the network and the branding. But would it be able to? It is the parador brand that makes privatisation and the possible dismantling of the network paradoxical. At the same time as these hotels and their brand, magnificent in showing off Spanish culture, are threatened, the government is attempting to boost cultural tourism as part of the "marca" España, the Spain brand.
* For information on the paradores: http://www.parador.es/en/portal.do
Any comments to andrew@thealcudiaguide.com please.
The paradores are state-run hotels. Not any old hotels. They are hotels in converted buildings of historical and artistic interest, such as former castles and monasteries. They are not some cheap and cheerful, backpacker hostel-type accommodation. Anything but. They are luxury, predominantly four-star, though there are some five as well as three-star hotels. The first parador came into being in the late 1920s. The network underwent its most rapid period of expansion during the 1960s when the number of establishments doubled to 83. Nowadays, they offer in total more than 10,000 places.
The rationale behind the paradores has always been clear. They are representative of Spain's heritage and so fit with a broader concept of tourism than the usual sun and beach. Not exclusively rural, they nevertheless form part of a tourism philosophy that has always gone hand in hand with sun and beach, the cultural philosophy.
The paradores website says that the network is in the midst of its greatest growth stage since the 1960s. Fourteen more establishments are due to open in taking the total number to over a hundred. This is the plan, but the plan is unlikely to be fulfilled. The paradores are in trouble. Deep trouble. Roughly a quarter of them are included in a new plan - one of restructuring - several of them are closed temporarily and at least one will be closed permanently. Negotiations with unions regarding redundancies have been going relatively smoothly.
Take a look at any of the paradores and you can't fail to be impressed. Some are much grander than others. Santo Estevo in Galicia, for instance, is a fine building with cloisters and courtyards. One of the less grand is the Puerto Lumbreras in Murcia. This three-star Mediterranean-style house (a rather large house, it must be said) is one that will definitely be closing.
It is the grandness, though, which partly explains why the paradores are in trouble. They cost a great deal to maintain, and the state, you may have noticed, is a bit short of readies just at the moment. There is also the fact that they tend not to be cheap to stay in. In the current economic climate, they face strong competition from the less grand and less expensive and they are also subject to a downturn in the home tourism market.
The financial strains that the paradores are experiencing has brought into question their viability as state-run hotels. In a way, they are something of an anomaly in being in public-sector ownership. But then, they are also part of the nation's heritage, and the 80 or so years history of the network is not something that even the national government with its austerity measures is keen to give up.
Privatisation of sorts is going to happen, though. The government says that it is not privatisation in the purest sense. Rather, it intends to put out to tender the management of hotels with a rider that as many jobs as possible can be guaranteed. So far, however, 350 job losses have been confirmed. More restructuring may be required to salvage the network that, in 2011, lost 35 million euros and experienced a decline in occupancy to under 60%. By way of comparison, in 2004, it made a profit of 20 million and had occupancy of over 70%.
The paradores are not the only example of government-controlled accommodation having to be farmed out to the private sector. In Mallorca, for example, the island's council has bowed to the inevitable and privatised two of the refuge hostels on the Tramuntana dry-stone route; the council simply can't afford their upkeep.
In the end, the privatisation of the paradores may have to be purer than the national tourism ministry wants, so long as it can maintain the network and the branding. But would it be able to? It is the parador brand that makes privatisation and the possible dismantling of the network paradoxical. At the same time as these hotels and their brand, magnificent in showing off Spanish culture, are threatened, the government is attempting to boost cultural tourism as part of the "marca" España, the Spain brand.
* For information on the paradores: http://www.parador.es/en/portal.do
Any comments to andrew@thealcudiaguide.com please.
Thursday, December 20, 2012
MALLORCA TODAY - Decisions on management of Tramuntana by the end of the year
The Council of Mallorca is looking to complete the process of handing over to private operators the running of two of the dry stone route refuges in the Tramuntana (those in Deià and Pollensa) by the end of the year. The privatisation will save the Council around 250,000 euros.
See more: Ultima Hora
See more: Ultima Hora
Tuesday, November 20, 2012
MALLORCA TODAY - Pollensa's refuge to be privatised
It has taken several months to confirm but the Council of Mallorca has finally and officially set in motion the process to privatise two of the five refuges on the Tramuntana dry stone route, one in Deià, the other by the Roman bridge in Pollensa. The debt for running the refuges in 2011 was 600,000 euros, hence the decision to privatise. The services offered to walkers by the refuges will not be changed under the planned privatisation.
See more: Diario de Mallorca
See more: Diario de Mallorca
Sunday, July 29, 2012
MALLORCA TODAY - Inca considers privatising Dijous Bo fairs
Inca town hall is looking at opening up the management of the fairs that precede the Dijous Bo fair in November to private tender. The town hall would continue to operate Dijous Bo itself, the most important of Mallorca's autumn fairs, but the move is a reflection of the shortage of cash that had prevented the town hall from funding this year's bullfight before private sources stepped in to enable it to be staged.
See more: Ultima Hora
See more: Ultima Hora
Monday, May 21, 2012
Taking Refuge: Dry stone routes
I've been there. Ivebeenthere. Co.uk. This "Guardian" operated website, which allows those who have been somewhere to tell others where they have been, is, like most recommendation websites, quite useful. Being the "Guardian", the places travellers have been to tend not to be the usual fare. Chris2005 who is, to use the ivebeenthere vernacular, its "top tipper", has been to 235 places, while the second top tipper, Sissi, has seemingly spent an entire lifetime travelling the world and notching up 196 places to which he or she has been. "I've been everywhere, man."
Chavan, on the other hand, hasn't been everywhere. He or she has only ever been to one place. Or had, as of 9 May. It's never easy to understand the derivation of website nicknames, but one supposes that Chavan is not a chav. You don't get many chavs hacking along the GR221 dry stone route in the Tramuntana mountains. Regardless of the origin of the moniker, Chavan has taken to the route and joins other Mallorcan tippers (74 in all), who invariably seem never to have set foot in a karaoke bar, in informing us as to where he has been (let's just settle on a he, shall we, as I can't be bothered keep on typing he or she).
GR 221, and this is the main point of Chavan's tips, takes in not just dry stones along the route it also takes in refuges, five of them in all. You can stay in one at a ludicrously cheap price. Eleven euros a night. Chavan tells us that the government in Mallorca (by which is meant the Council of Mallorca) "provides stunning refuge accommodation for hikers", one of the refuges being in Pollensa. Near to the Roman bridge, it had a slight problem with the roof in that part of it fell in, or to be more accurate, the skylight fell in to the dining area where, as Chavan points out, you can have an "optional dinner at 8.50 euros", which is indeed "brilliant value for three courses including a carafe of wine", but then so are many menus of the day. Or it would be brilliant value, assuming the refuge had actually reopened. Maybe I've missed something, but as far as I know it is still closed. Perhaps someone can advise.
The value for money that the refuges offer has not gone unnoticed. If you were to pitch up any time in the next few days and look to unlace your sensible walking shoes, unhitch your rucksack and seek to relax in eleven-euros-a-night stunning accommodation, you would in all likelihood be told that there is no room at the inn. The refuges get booked up in advance, and at eleven euros a night this isn't surprising.
But for how much longer might the refuges operate in such a fashion? Two of them, including Pollensa's, are up for some privatisation. The Council of Mallorca may currently provide stunning accommodation, but it's costing them an arm and a leg to do so. There is a shortfall of some 600 grand per annum, again not surprising when the nightly charge is so low and the refuges themselves are fine old piles that require a fine old amount of looking after or repairing, as in when the skylight falls in.
The spectre of privatisation hasn't gone down that well in Pollensa. The refuge, so some local businesses suggest, represents unfair competition. In private hands and the competition would be more unfair. It is hard to see how, though. Even in private hands, the refuge can only accommodate a maximum of 38 people. If anything, a private operator might want to up the rates, though it presumably wouldn't be allowed to (or not significantly), which would draw into question whether privatisation would in fact be feasible. Moreover, as far as accommodation is concerned, Pollensa town is hardly awash with hotels, and those that there are, apart from the larger Son Brull on the outskirts, are small boutique-style establishments.
The omens for Pollensa's refuge and indeed the others aren't that good. If the Council cannot find private operators for the two it is lining up, there has to be the possibility that they would be closed. Noises from the Council have hardly been reassuring either recently or in the past; the previous administration's councillor for the environment described the hostels as not being economically profitable.
If privatisation were to go ahead and were operators allowed to bump up rates substantially, then the whole ethos of the refuges would change. Chavan, clearly grateful to a local government, for its stunning accommodation, might, when he is there in future, be disappointed to find that they have changed. This would be a huge shame. There is much to be said for the refuges, their character, their style and their appeal to a certain type of visitor. The dry stone routes are a minority interest for Mallorca's tourists, but it is a form of tourism that deserves supporting. Rather than fewer or no refuges, there should be more of them.
Any comments to andrew@thealcudiaguide.com please.
Chavan, on the other hand, hasn't been everywhere. He or she has only ever been to one place. Or had, as of 9 May. It's never easy to understand the derivation of website nicknames, but one supposes that Chavan is not a chav. You don't get many chavs hacking along the GR221 dry stone route in the Tramuntana mountains. Regardless of the origin of the moniker, Chavan has taken to the route and joins other Mallorcan tippers (74 in all), who invariably seem never to have set foot in a karaoke bar, in informing us as to where he has been (let's just settle on a he, shall we, as I can't be bothered keep on typing he or she).
GR 221, and this is the main point of Chavan's tips, takes in not just dry stones along the route it also takes in refuges, five of them in all. You can stay in one at a ludicrously cheap price. Eleven euros a night. Chavan tells us that the government in Mallorca (by which is meant the Council of Mallorca) "provides stunning refuge accommodation for hikers", one of the refuges being in Pollensa. Near to the Roman bridge, it had a slight problem with the roof in that part of it fell in, or to be more accurate, the skylight fell in to the dining area where, as Chavan points out, you can have an "optional dinner at 8.50 euros", which is indeed "brilliant value for three courses including a carafe of wine", but then so are many menus of the day. Or it would be brilliant value, assuming the refuge had actually reopened. Maybe I've missed something, but as far as I know it is still closed. Perhaps someone can advise.
The value for money that the refuges offer has not gone unnoticed. If you were to pitch up any time in the next few days and look to unlace your sensible walking shoes, unhitch your rucksack and seek to relax in eleven-euros-a-night stunning accommodation, you would in all likelihood be told that there is no room at the inn. The refuges get booked up in advance, and at eleven euros a night this isn't surprising.
But for how much longer might the refuges operate in such a fashion? Two of them, including Pollensa's, are up for some privatisation. The Council of Mallorca may currently provide stunning accommodation, but it's costing them an arm and a leg to do so. There is a shortfall of some 600 grand per annum, again not surprising when the nightly charge is so low and the refuges themselves are fine old piles that require a fine old amount of looking after or repairing, as in when the skylight falls in.
The spectre of privatisation hasn't gone down that well in Pollensa. The refuge, so some local businesses suggest, represents unfair competition. In private hands and the competition would be more unfair. It is hard to see how, though. Even in private hands, the refuge can only accommodate a maximum of 38 people. If anything, a private operator might want to up the rates, though it presumably wouldn't be allowed to (or not significantly), which would draw into question whether privatisation would in fact be feasible. Moreover, as far as accommodation is concerned, Pollensa town is hardly awash with hotels, and those that there are, apart from the larger Son Brull on the outskirts, are small boutique-style establishments.
The omens for Pollensa's refuge and indeed the others aren't that good. If the Council cannot find private operators for the two it is lining up, there has to be the possibility that they would be closed. Noises from the Council have hardly been reassuring either recently or in the past; the previous administration's councillor for the environment described the hostels as not being economically profitable.
If privatisation were to go ahead and were operators allowed to bump up rates substantially, then the whole ethos of the refuges would change. Chavan, clearly grateful to a local government, for its stunning accommodation, might, when he is there in future, be disappointed to find that they have changed. This would be a huge shame. There is much to be said for the refuges, their character, their style and their appeal to a certain type of visitor. The dry stone routes are a minority interest for Mallorca's tourists, but it is a form of tourism that deserves supporting. Rather than fewer or no refuges, there should be more of them.
Any comments to andrew@thealcudiaguide.com please.
Thursday, May 03, 2012
MALLORCA TODAY - Son Espases cuts back; hospitals could be privatised
More evidence of the turmoil in the public health service in Mallorca. Son Espases, the island's main public health hospital, will reduce by 50% its non-urgent operations between July and September and close 150 beds during the same period. In all, 300 beds in different hospitals will be closed over the summer. Meanwhile, the UGT union is stating again its belief that the regional government intends to privatise the public health hospitals in Inca and Manacor and to sell the Joan March hospital, closure of which has already been announced.
Thursday, March 29, 2012
MALLORCA TODAY - Tramuntana shelters will be privatised
As previously predicted, the Council of Mallorca has decided to go ahead with the privatisation of two refuges (shelters) on the dry-stone route in the Tramuntana, one in Deià, the other by the Roman bridge in Pollensa. The shelters offer cheap accommodation (for 38 people in the case of the Pollensa refuge) as well as kitchen facilities, but the two represent an annual deficit of 600,000 euros.
See more: Diario de Mallorca
See more: Diario de Mallorca
Wednesday, January 11, 2012
Private Information: Tourist offices
A few years ago a friend (Jake from the Giant Maze) and I came up with an idea for a separate and private tourist information office (in Puerto Alcúdia). Part of the concept would have been to heavily feature technology, for example video display screens, which would have formed a key means of generating revenue from major advertisers.
I am reminded of this idea, which came to nothing as it would have been too expensive and was potentially too risky, when seeing that Palma town hall is considering the privatisation of its tourist information offices.
Palma has set up its own tourism "foundation", in other words a group that comprises various businesses and organisations that will undertake the "365" promotion of the city. An annual budget of 3.6 million euros has been set aside (ten grand a day then). Despite this new source of finance, the town hall is addressing the cost of running its information offices, which would amount to half this budget.
Is privatisation of tourist offices a good idea? It happens elsewhere. For example, Berlin has a privatised tourist information company, in Cornwall they are looking at privatisation and in Adelaide, Australia, there is a privatisation process underway, but it is one that is requiring an independent inquiry to ensure there is no conflict of interest in the sale and that the sale has the correct controls.
Without knowing fully what the state attorney-general in South Australia is concerned about, the fact that he has raised a concern should be enough to induce wariness as to how privatisation might operate in Mallorca.
Palma has in mind that the offices should be able to generate revenue to meet part of their running cost (without being exact) and that to do so, they would cease to be as tourist offices currently are (in theory at any rate) - neutral in matters of promotion.
The tourist offices would, in effect, become like shops, able to sell tickets for various attractions and events which currently they do only occasionally. For example, the offices in Pollensa sell tickets for the music festival, but this is a specifically Pollensa cultural event, one to which the town hall contributes funds. Otherwise, and although tourist offices are full of publicity for this or that, they are supposed to steer clear of indulging in what might seem like direct promotion or favouritism.
From my experience, tourist office staff are pretty professional in this regard. And as an example of how the offices seek to retain neutrality, last summer Pollensa town hall was forced to issue a warning to businesses which have publicity material in the outdoor display units in Puerto Pollensa to stop indulging in a publicity war and interfering with each other's material.
But once the tourist offices are obliged to make money, the rules change. In Palma, one line of revenue would be from restaurant promotion. Whether restaurants would be willing to pay is one issue, but were they to, then a can of worms could potentially be opened.
A problem with making the offices revenue generators is whether, in the pursuit of "sales", their core role of simple information provision would be compromised. If you have ever, like I have, spent time observing what happens at tourist-office desks, you will have come to appreciate that much of the tourist encounter involves questions of the how-do-I-get-to, where-do-I-go-to variety. One office told me that one of its most frequently asked questions was where were the nearest toilets.
The tourist encounter can be repetitious, basic and extremely time-consuming. If tourist office staff have to also sell tickets for this excursion or that attraction, then delays in handling enquiries will increase.
Technology, you would think, could be made to eliminate many of the repetitious and basic enquiries. Possibly so, as also it could be made to handle other information. One town that has been embracing technology is Artà, not a town with a massive tourism industry but one that has adopted the use of audio guides and now also QR (quick response) codes which are photographed with mobiles in order to provide information in five different languages.
Whether the privatised tourist offices in Palma would make use of technology or not, there is an altogether more fundamental question. Where are they? In October, when mayor Mateo Isern was first talking up the Palma 365 promotion campaign, it was being pointed out that Palma's tourist office provision was abysmal by comparison with, for example, Barcelona and even with neighbouring Calvià. They can privatise the offices all they like, but they won't make money if tourists can't find them.
Any comments to andrew@thealcudiaguide.com please.
I am reminded of this idea, which came to nothing as it would have been too expensive and was potentially too risky, when seeing that Palma town hall is considering the privatisation of its tourist information offices.
Palma has set up its own tourism "foundation", in other words a group that comprises various businesses and organisations that will undertake the "365" promotion of the city. An annual budget of 3.6 million euros has been set aside (ten grand a day then). Despite this new source of finance, the town hall is addressing the cost of running its information offices, which would amount to half this budget.
Is privatisation of tourist offices a good idea? It happens elsewhere. For example, Berlin has a privatised tourist information company, in Cornwall they are looking at privatisation and in Adelaide, Australia, there is a privatisation process underway, but it is one that is requiring an independent inquiry to ensure there is no conflict of interest in the sale and that the sale has the correct controls.
Without knowing fully what the state attorney-general in South Australia is concerned about, the fact that he has raised a concern should be enough to induce wariness as to how privatisation might operate in Mallorca.
Palma has in mind that the offices should be able to generate revenue to meet part of their running cost (without being exact) and that to do so, they would cease to be as tourist offices currently are (in theory at any rate) - neutral in matters of promotion.
The tourist offices would, in effect, become like shops, able to sell tickets for various attractions and events which currently they do only occasionally. For example, the offices in Pollensa sell tickets for the music festival, but this is a specifically Pollensa cultural event, one to which the town hall contributes funds. Otherwise, and although tourist offices are full of publicity for this or that, they are supposed to steer clear of indulging in what might seem like direct promotion or favouritism.
From my experience, tourist office staff are pretty professional in this regard. And as an example of how the offices seek to retain neutrality, last summer Pollensa town hall was forced to issue a warning to businesses which have publicity material in the outdoor display units in Puerto Pollensa to stop indulging in a publicity war and interfering with each other's material.
But once the tourist offices are obliged to make money, the rules change. In Palma, one line of revenue would be from restaurant promotion. Whether restaurants would be willing to pay is one issue, but were they to, then a can of worms could potentially be opened.
A problem with making the offices revenue generators is whether, in the pursuit of "sales", their core role of simple information provision would be compromised. If you have ever, like I have, spent time observing what happens at tourist-office desks, you will have come to appreciate that much of the tourist encounter involves questions of the how-do-I-get-to, where-do-I-go-to variety. One office told me that one of its most frequently asked questions was where were the nearest toilets.
The tourist encounter can be repetitious, basic and extremely time-consuming. If tourist office staff have to also sell tickets for this excursion or that attraction, then delays in handling enquiries will increase.
Technology, you would think, could be made to eliminate many of the repetitious and basic enquiries. Possibly so, as also it could be made to handle other information. One town that has been embracing technology is Artà, not a town with a massive tourism industry but one that has adopted the use of audio guides and now also QR (quick response) codes which are photographed with mobiles in order to provide information in five different languages.
Whether the privatised tourist offices in Palma would make use of technology or not, there is an altogether more fundamental question. Where are they? In October, when mayor Mateo Isern was first talking up the Palma 365 promotion campaign, it was being pointed out that Palma's tourist office provision was abysmal by comparison with, for example, Barcelona and even with neighbouring Calvià. They can privatise the offices all they like, but they won't make money if tourists can't find them.
Any comments to andrew@thealcudiaguide.com please.
Friday, June 24, 2011
Small Is Beautiful?
President Bauzá's right hand. A question is how far to the right is the right-hand man. Josep Aguiló, vice-president and in command of the economy, industry, employment, business. For a representative of what is intended to be a "small" government, he has got himself one hell of a big department.
Aguiló takes control of Balearic finances amidst a pantomime routine being played out by the governmental incomers and outgoers. It's one to do with the state of the finances in the islands and specific administrations. The government's debt is this high, say the incomers. Oh no it isn't, respond the outgoers. Palma council's up to its neck to this level of debt. Oh no it isn't.
Let's just accept that the finances aren't very good. They are bad enough that the Balearic parliament is owed several million euros by the regional government and is in serious danger of not being able to pay its staff. There's just one example.
The pantomime routine is familiar enough. New lot comes in, blames the previous lot. Aguiló is blaming the previous lot for having approved a budget in 2008 that was too ambitiously expansionist. As it turned out. The Antich administration was clobbered by economic crisis, but it, like the central government, fooled itself into not believing what was happening. Maybe it was a case of trying to keep up spirits, but when Zapatero famously announced there was no crisis, he did so at a time when he was driving an economy whose wheels were fast coming off.
The new government's mantra is one of austerity and small government. Austerity we can probably understand. Can't pay, won't pay, because there isn't any money. But what is small government?
On the face of it President Bauzá's small government is about having fewer ministries and fewer departments within these ministries. The number of directorate-generals have been slashed to the extent that only of the new super-ministries, Biel Company's agriculture-environment-land behemoth, has more or less retained the same number of departments.
Moving the furniture around on the organisation structure doesn't amount to small government. Some savings may be evident from tossing the odd wormhole-ridden Welsh dresser into a skip, but the result is one of being not as large rather than small; the tasks of government remain much the same even if there are fewer bodies to perform them. Maybe it's because they are expected to work harder, but the salaries of Bauzá's cabinet will in fact increase.
Small government is a political philosophy as opposed to a way of drawing an organisational chart. On the principle that structure follows strategy, which it does, or should do, then Bauzá's administration bears a strong resemblance to that of President Antich. The new structure, though, obscures the strategy. Quite deliberately so, you fancy, as this is where small government really kicks in.
Small government, so the theory would have it, is a means of getting government out of people's hair, of not interfering overly in citizens' day to day. The concept, and you can also call it limited government, goes right back to the American founding fathers; Thomas Jefferson was deeply suspicious of governments that were too powerful.
Limiting the degree to which governments control people's lives and tell them how to live is a positive, but Jefferson's principles are not what small government has come to mean. Instead it is shorthand for government not spending money. It can also mean that demands on citizens to spend money, in the form of taxes, are reduced. But they still have to pay somewhere along the line. And the line is one of deregulation and privatisation.
The CCOO union, as I remarked the other day, was probably overstating it when it raised fears of privatisation in education, but the fact that it has raised it makes it a possibility. It is the process of government potentially relinquishing its direct hold over certain provisions that leads to the question about Sr. Aguiló. How far might he go?
The extent of measures that the new government might enact raises again the question as to how much the local Partido Popular is being guided or driven by the national party. Mariano Rajoy, who is likely to succeed Zapatero, has said that what will happen in the Balearics will be an "advance" on what the PP would do nationally. Without overtly saying so, Rajoy is implying that the Balearics are a test bed, an experiment. It's how far the experiment is meant to go that is the issue.
Any comments to andrew@thealcudiaguide.com please.
Aguiló takes control of Balearic finances amidst a pantomime routine being played out by the governmental incomers and outgoers. It's one to do with the state of the finances in the islands and specific administrations. The government's debt is this high, say the incomers. Oh no it isn't, respond the outgoers. Palma council's up to its neck to this level of debt. Oh no it isn't.
Let's just accept that the finances aren't very good. They are bad enough that the Balearic parliament is owed several million euros by the regional government and is in serious danger of not being able to pay its staff. There's just one example.
The pantomime routine is familiar enough. New lot comes in, blames the previous lot. Aguiló is blaming the previous lot for having approved a budget in 2008 that was too ambitiously expansionist. As it turned out. The Antich administration was clobbered by economic crisis, but it, like the central government, fooled itself into not believing what was happening. Maybe it was a case of trying to keep up spirits, but when Zapatero famously announced there was no crisis, he did so at a time when he was driving an economy whose wheels were fast coming off.
The new government's mantra is one of austerity and small government. Austerity we can probably understand. Can't pay, won't pay, because there isn't any money. But what is small government?
On the face of it President Bauzá's small government is about having fewer ministries and fewer departments within these ministries. The number of directorate-generals have been slashed to the extent that only of the new super-ministries, Biel Company's agriculture-environment-land behemoth, has more or less retained the same number of departments.
Moving the furniture around on the organisation structure doesn't amount to small government. Some savings may be evident from tossing the odd wormhole-ridden Welsh dresser into a skip, but the result is one of being not as large rather than small; the tasks of government remain much the same even if there are fewer bodies to perform them. Maybe it's because they are expected to work harder, but the salaries of Bauzá's cabinet will in fact increase.
Small government is a political philosophy as opposed to a way of drawing an organisational chart. On the principle that structure follows strategy, which it does, or should do, then Bauzá's administration bears a strong resemblance to that of President Antich. The new structure, though, obscures the strategy. Quite deliberately so, you fancy, as this is where small government really kicks in.
Small government, so the theory would have it, is a means of getting government out of people's hair, of not interfering overly in citizens' day to day. The concept, and you can also call it limited government, goes right back to the American founding fathers; Thomas Jefferson was deeply suspicious of governments that were too powerful.
Limiting the degree to which governments control people's lives and tell them how to live is a positive, but Jefferson's principles are not what small government has come to mean. Instead it is shorthand for government not spending money. It can also mean that demands on citizens to spend money, in the form of taxes, are reduced. But they still have to pay somewhere along the line. And the line is one of deregulation and privatisation.
The CCOO union, as I remarked the other day, was probably overstating it when it raised fears of privatisation in education, but the fact that it has raised it makes it a possibility. It is the process of government potentially relinquishing its direct hold over certain provisions that leads to the question about Sr. Aguiló. How far might he go?
The extent of measures that the new government might enact raises again the question as to how much the local Partido Popular is being guided or driven by the national party. Mariano Rajoy, who is likely to succeed Zapatero, has said that what will happen in the Balearics will be an "advance" on what the PP would do nationally. Without overtly saying so, Rajoy is implying that the Balearics are a test bed, an experiment. It's how far the experiment is meant to go that is the issue.
Any comments to andrew@thealcudiaguide.com please.
Saturday, February 26, 2011
MALLORCA TODAY - Easter airports' strike threat
The privatisation of AENA, the national airports agency, is getting under way, the Spanish Government having created a new company (Aena Aeropuertos) into which will pass control of airports. The process of privatisation will start with control towers at 13 airports this April. The rest of the process, which covers 47 airports, will be effected in 2012.
The unions are planning demonstrations today against privatisation and are also threatening a strike over Easter, negotiations seemingly having broken down with the transport ministry.
The unions are planning demonstrations today against privatisation and are also threatening a strike over Easter, negotiations seemingly having broken down with the transport ministry.
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