Bringing All-Inclusives To Account

Biel Barceló told parliament's tourism committee earlier this week that sixteen fines had been handed out to all-inclusive hotels. Quite what they were fined for was not made clear. Was it simply for having been offering all-inclusive when the hotels were not on the ministry's all-inclusive register? That wasn't the implication. Eighty all-inclusives had been "reviewed", he said, and they had been reviewed for that very reason - not having been on the register. Why not just fine them all? What is the purpose of a register? It's not meant to be voluntary. If a hotel hasn't registered, what has it got to hide?

Barceló was self-congratulatory in having been able to announce the sixteen fines. Sixteen. Hardly a princely sum. Where he was more deserving of congratulation was in being able to say that there hadn't been inspections in either 2014 or 2015. His government can be partly forgiven for 2015 as it didn't come to power until high summer was more or less upon it, but why no inspections the previous year? And what about inspections in years before that?

Another tourism minister called Barceló, Joana, was the final of the four incumbents of the post during the Antich government of 2007 to 2011. I can well recall her answering a question about all-inclusives by saying that inspections were made and that her government was being strong in this regard. Strange, therefore, how we never heard any more or from the subsequent government. All-inclusives, we were being led to believe, had a clean bill-of-health.

Let's be clear, there are different types of AI. It is a package that can be either total (it's the only option) or just one of the forms of board on offer. It is not by any means solely something from the economy end of the market. There are good - very good - hotels with AI, and the standard of the offer is also good. Service is good, the food is varied, there's no watered-down beer and there are no dodgy local brands of spirits. Should we assume that the sixteen fines were not directed at any of this class of hotel?

At the economy end, anyone with the slightest knowledge knows what the deal is. And part of that deal is the on-arrival upgrade (which may also exist with better hotels). Then there is the daily deal. Bringing in people who aren't guests. When this offer was explained to Pilar Carbonell, the director-general of tourism, at a meeting in Alcudia this time last year, it was clear that she was unaware of such a practice. And she's the director-general.

When there was some rumpus about self-service alcohol in Magalluf AIs last year, Barceló seemed surprised. He was then scandalised by the level of apparent drunkenness. And he's the tourism minister.

What tourism worlds do politicians inhabit, because it clearly isn't the one that is right at the coalface of Mallorca's economy-class tourism. Good luck to Barceló with his "regulations" of AI, but what are these going to be? Improving quality standards, we understand. Yes, and the 2012 tourism law already makes provision for this. It's never been enforced and nor has it been made clear what these standards are or should be. Are we going to find out next year? Perhaps so. In which case, will they include staff-guest ratios to ensure no queuing or only short queues? Will they stipulate what's on the menu, what drinks can be served, what type of treatment guests receive?

It's high time that some AIs were brought to account. They cannot be banned because the market will not allow this, but requirements can be made tough enough that the AI model ceases to be viable. If Barceló, as seems evident, wishes to impose tough standards on private accommodation to be rented for holiday purposes, then he should do likewise with the standards of AI. Yes, there are some poor-grade tourists who go to certain economy-class AI hotels, but when they are then treated as poor grade, you get what is too often the case: a vicious circle of unedifying tourism.

Is Airbnb The Real Scourge?

Increasingly, one wonders who or what is the principal target of those who express their ire over so-called saturation. For some, the most extreme wing, it is all tourism. For others, it is the hoteliers. Or holiday rentals. Or cruise ships.

The latter is an irrelevant category. Irrelevant anywhere in Mallorca that isn't Palma. Forget the cruise passengers. They make for useful propaganda, but they are not central to the debate.

What about hoteliers, then? Well, if one believes that a barely increased number of hotel places this century represents saturation, then hoteliers are at fault. They aren't of course. They haven't been adding to the "crisis" except by knocking out higher occupancy levels. Even these are marginal in adding to human pressure. When one can talk of high summer 90 or 91 per cent one year, then 94 or 95 another, there is clearly an increase, but it doesn't amount to overcrowding. Forget the hoteliers as well.

Which leaves us with holiday rentals. President Armengol suggested recently that it is too simplistic to charge them with being the cause. Simplistic perhaps. But probably accurate.

Some of those who have been railing recently about limits or reduction border on being cranks with no coherent programme for economic alternatives, save for one inspired by impractical anti-capitalist quasi-anarchy. Others are anything but cranks. They are extremely sensible. And amidst their sense, they identify a real issue - that of housing.

This has been a theme that the saturation argument has raised before this summer, but it is one that needs to be far more seriously and urgently addressed. Holiday rentals are depriving people of long-term accommodation, and where they can find it, it is becoming less affordable. One can only see this situation becoming more critical.

The left are in a quandary over holiday lets. An argument is that making a return on a property is a right that should not be denied, if this return is a means of providing an adequate income. A further ingredient is that there are elements of the left who take great issue with the hoteliers, especially the larger ones. They are all for hoteliers' noses being put out of joint; private accommodation is one way of achieving this.

In terms of the market in general, the left, instinctively prone to market intervention and interference, are finding this interference to be not as easy as it might once have been. Institutional and legal bases, be they in Mallorca, Spain or many other places, make interference complicated. But what interference might there be? Denying someone the right to rent out a property runs counter to leftist thinking. At the same time, however, it can deny a worker the right to long-term accommodation, while by its very existence it contributes to additional tourism mass. It's not simplistic.

There are of course degrees of rental. The single property owner is quite different to the one with multiple properties, but where is the line drawn? Can it be drawn? The distinction seems to be coming less and less relevant as the left take on the seemingly unstoppable momentum behind tourist accommodation rental. In Barcelona, the mayor Ada Colau, who shot to prominence as an activist who founded the movement against evictions, has proposed caps on prices for long-term rentals (citing Paris and Berlin as examples of where this is done). She has also been closing down apartments used for tourists and issuing warnings to Airbnb and others: they can expect fines of upwards of 600,000 euros if they don't stop promoting illegal accommodation.

But owners, and not just those with several properties, have fired back by insisting on their rights to rent out. In so doing, they are expressing the rights of a totally free market, something with which Colau and others towards the far left have great difficulty. These owners point to a form of liberation offered by Airbnb and others - the democratisation of property, the very essence of the so-called collaborative economy of which Airbnb is at the forefront, and the very essence also of what some on the left advocate. The contradictions are profound.

It would be stretching things to say that Airbnb and the philosophy of the collaborative, shared economy is the root cause of saturation, overcrowding and distortions in the housing market. There has, after all, always been this rental market, but it is valid to say that Airbnb has expanded the market vastly, so much so that it is now becoming disproportionate. Its advance is such that the number of Airbnb travellers to Spain between June and August rose by more than 70% - Mallorca and Barcelona were among the favoured destinations.

This collaborative economy advocates property democratisation. It favours the individual's rights. But at what cost to other sectors of society? Is Airbnb the real scourge? If you're a free marketer, you'd prefer not to think so. However ... .

Accommodation Regulation: The Devil's Own Job

Biel Barceló has again been talking about limits being placed on the number of tourist places. He was doing so in the context of the launch of the campaign to make Balearic residents understand what sustainable tourism is all about (a useful exercise, it must be said) and to sensitise these same residents to the value of tourism and tourists (even more useful).

The timing of the launch of this campaign and the talk of limits is surely no coincidence. Although the figure is not usually given for several months, there will at some point be an announcement as to the day in high summer when the total population of the Balearics (residents, tourists and any others) was at its peak. The day is always around this time in August. On the tenth of the month last year, the figure topped the two million mark for the first time.

The tourism minister mainly has holiday rentals in his sights. Hotel places, though not totally subject to a ceiling, cannot increase significantly without there being permissive regulation. The "saturation" to which Barceló and others regularly refer stems from the non-hotel sector. He says that when regulation comes along it will not be "total prohibition". The choice of words can seem a little odd. While he implies that there has been such prohibition until now and that it hasn't solved anything (which is true), it has never been total. The prohibition has been for the open marketing of apartments as holiday accommodation and so for the registration of apartments to be advertised as holiday, tourist or vacation rental.

The Barceló remedy will be to legalise some of these apartments (it's easier to talk in terms of legalise, as regulate can be taken different ways). But certainly not all. There is to be no carte blanche for anyone to commercialise an apartment for tourist rental. And nor should there be.

But he has the devil's own job in drawing up this legislation. Apart from the market dynamics, such as with the online accommodation providers, there are the institutional issues in the Balearics. These are the varying responsibilities for tourism organisation and urban planning, ones that reside with island councils and town halls.

There is the possibility that whatever parameters the government seeks to establish for private tourist accommodation, the actual implementation of regulation will not be universal. For example, the councils of Ibiza and Formentera will be loathe to allow greater permissiveness. In Menorca, there may be greater willingness. The council there attempted to get the previous government to relax regulations, a plea that was ignored when it came to drafting the 2012 tourism law. As for Mallorca, the council has yet to assume full responsibilities for tourism, so no one can tell.

At town hall level there will be different needs. As yet, however, it would seem the government is not engaging in active discussions as to what these might be. Councillors in Alcudia and Pollensa have told me that they don't really know what Barceló has in mind. If the new law on holiday rentals is indeed to be ready for parliament before the end of the year, then the government needs to get a move on and consult.

The talk has been that there will be a system of zoning, with apartment rentals capable of being legitimately marketed for holiday purposes in some areas and not others. It sounds like a recipe for legal challenge, while even within the zones there is the not insignificant issue of how communities react. The government, stressing the need for "coexistence" and therefore hinting at community administrators vetoing holiday rentals, has nevertheless admitted that such vetoes may well not stand up in court.

But whatever the government decides, there will remain the question of enforcement. The experience in Catalonia is instructive in this regard. Although there has been greater permissiveness than the Balearics for a few years, this hasn't stemmed the supply of illegal accommodation. In seeking to combat this, the town hall in Barcelona has this week announced a system whereby neighbours can rat on others. Also this week it said that 256 properties were "closed" during July, a process enabled by a specific search engine created to detect illegal properties. Moreover, nine accommodation websites are facing sanctions.

While Barceló says that the Balearics can take no more additional tourists in high summer and he seeks legislative remedy, we can probably anticipate he'll be saying the same things about "saturation" this time next year. And the year after.

Low Cost Holidays - Questions Needing Answers

The collapse of Low Cost Holidays will go beyond the distress caused to holidaymakers, employees and certain businesses here in Majorca. The collapse leaves behind it a series of questions, the first one of which is: where is Paul Evans?

The founder of Low Cost has not been heard of since last Friday's announcement. Locally, there has been comment, none of it complimentary, about how he didn't face up to any of the stakeholders affected by the collapse. Here is someone who has been feted by the travel industry. A holiday guru no less. Perhaps the greatest lesson to be learned is to never trust someone portrayed as a guru or wishing to be portrayed as a guru.

But plenty of trust was placed in him, or at least in his businesses. The trust extended to the fact that in terms of consumer protection here was a business built on sandy foundations - Majorcan sand, Spanish sand. Why did Low Cost make the move to Majorca? One reason would have been the lower cost of protection. When it moved away from the UK, Low Cost would have been into Atol alone for some 2.5 million pounds. There were savings to be made by switching to a jurisdiction that is less rigorous in regulation and in governance requirements, such as accounts.

Moving the operation made a good deal of business sense, though. The ever-increasing costs associated with regulation in the UK was one reason, as probably also was how IVA (VAT) is accounted for and allocated in the sale of packages: there were savings to be made with this as well.

The trust ran so deep that the move, and so the loss of Atol and Abta coverage, had only initial marginal impact on sales. If the consumer senses a deal, he or she will snap it up, protection logos or no protection logos. Moreover, travellers had been promised benefits in terms of financial and consumer protection from the move. The 1.24 million bond that the Balearic government is sitting on is presumably the sum of these benefits.

Biel Barceló, the tourism minister, has attacked the fact that sales were still being made shortly before trading ceased. While some have drawn conclusions that are unsubstantiated, any revenue being brought in may have been to try and buy time by paying off whatever liabilities could be paid off.

There has to be an investigation of Low Cost. The questions are of what and by whom; questions made more complicated by the fact that the administrators are UK-based. There are also questions to be asked of the Balearic government and of national government regarding regulatory controls. The Balearic government's handling of the affair has been embarrassing, made more so by an announcement from the consumer affairs branch suggesting that hotels shouldn't be demanding payments from holidaymakers, which is what has been happening. So, do those tourists who have paid now have to file further claims to get their money back?

And there is more embarrassment for the government. The names at the ministries and at the presidency have changed since 2013, but the sentiments would still be the same as they were when former tourism minister Carlos Delgado and the then president Bauzá were proud to speak of the investment that was to be made in jobs and technology. Barceló, Negueruela, Armengol - none would have said any different. But they may now be minded to be more cautious when welcoming businesses bearing gifts of innovative and employment-rich gold. The combination of technological innovation and tourism is a government dream. It shouldn't be shackled by burdensome regulation but it should come with some understanding by those who are in effect the regulator. Did the government then or does the government now fully understand the nature of the business?

On top of this was the fact that the rapidly changing business model didn't guarantee loyalty to Majorca. In September last year, with redundancies in the offing, Low Cost explained that there was to be greater concentration on its operation in Krakow, a university town with, as was said, graduate students seeking a career in tourism. Unlike Palma, therefore.

There is another question to be asked of the government. As it has emerged that the industry locally had its suspicions about Low Cost's situation, as it is known that some hotel chains had stopped dealing with Low Cost, as pretty much anyone will say that blaming things on Brexit is a smokescreen, was the government aware of any difficulties? It's hard to believe that it wasn't.

The Mess Of Regulating Holiday Rentals

The regional government is getting itself into a right old pickle over holiday rentals' regulation. A requirement for regulation, one in fact mandated by the sustainable tourism tax law, is that it should be in place within six months of that legislation's approval. The very fact of this legislative mandating says much for the cart-before-horse nature of the holiday rentals' regulation. It needed to have been in place before the tourist tax was implemented; hence why the government is in such a rush to regulate.

There is, one can say with certainty, going to be total chaos from 1 July. Legitimate rentals' owners and businesses haven't a clue as to how they are to collect the tax. Illegitimate ones have even less of a clue, but they are supposed to charge the tax, even if they are renting out illegally. So, the need to have regulated the market was essential prior to the introduction of the tax. Though even with regulation, it should be noted that Catalonia, where they have over three years experience with a tax, admit that they haven't smoothed out all the wrinkles when it comes to private accommodation: and in Catalonia, there is sensible regulation. 

Biel Barceló and his tourism director-general, Pilar Carbonell, have been doing the rounds of the island councils, presenting them with a draft for regulation. The ministry is going to have to re-draft it, as the councils aren't happy. This arises, in part, from the fact that responsibilities for tourism have been devolved to the islands, but even then, not in a standardised way.

One of the councils' concerns is that the regulation is pushing the onus further down the administrative chain to the town halls. The councils believe, and they are right to believe, that most (all?) town halls will not be in a position to meet demands of the regulation by the time it is introduced (presumably some time in September at the latest). How long would the town halls need? That's anyone's guess.

The situation is made very much more complicated by the fact that the overarching plans for intervention in touristic areas (PIAT) will take up to two years to be agreed: these are plans designed by the island councils. These will supposedly define where holiday rentals can be and where they cannot be. In the interim, town halls are to be left to decide where holiday rentals will be permissible within their municipalities. These decisions may later be in accordance with the island councils' PIATs or they may not be.

This seems like a recipe for utter confusion and potential conflict down the line, while the chances of the town halls being able to come up with interim decisions are, in any event, almost zero: or certainly not by the time the regulation comes into force.

The government is at pains to stress that each island should, within a general framework of regulation, be able to decide for itself how regulation will be applied: to which areas, for example. The consequence of this, however, is that each of the islands is likely to end up with differing interpretations of the regulation. And that's before the town halls have come up with their own. Who'd be an owner and who'd be a tourist trying to pick a way through the potential mish-mash of regulatory application this is all going to create?

Moreover, there is the situation by which the island councils are at different stages of having adopted tourism responsibilities. Mallorca hasn't as yet. Ibiza, by contrast, has, and it has announced its own get-tough policy on illegal rentals. So, in addition to the regional government (and the Hacienda) reading the riot act to non-declaring owners and illegally rented properties, there is an island council doing the same thing.

It is launching an "emergency plan" against illegal rentals. It reckons that there are up to 20,000 places (as opposed to actual properties) that are defined as illegal. But the need for such an emergency plan arises in no small part from the fact that the rules are so unclear. Will they become clearer with the government's regulation? You really wouldn't bet on it.

The Zoning Of Holiday Lets

Pilar Carbonell is the director-general of Balearic tourism. She's the one who gets things done rather than talk about getting things done, which is minister Barceló's job. But she did talk recently. In a wide-ranging interview, she spoke about the tourist tax, all-inclusives, holiday lets, Aena and lower tariffs at the airport in winter. Hers is a wide brief.

I met her recently when she came to Alcudia to talk to local businesses who were wanting something done about all-inclusives. She seemed eminently charming. Highly attentive and respectful to what was being said at the meeting, there was nevertheless an impression that she was somewhat divorced from the day-to-day realities of life in the resorts. In a way this was surprising. She is steeped in the industry from the point of view of non-hotel businesses, having run restaurants and having been the president of the restaurants' association. In Alcudia, she seemed not to know of the sheer scale of the massive Bellevue complex and the enormous influence this has on the local tourism economy. She seemed surprised when told of the practice of wristbands being sold on the beach to tourists who can get day rates to drink as much as they want inside an all-inclusive.

Perhaps it's too much to ask that any politician with a tourism brief can be familiar with issues in each and every resort on the island, but if so, one wonders about what she said in this recent interview about the application of rules regarding holiday lets.

The law on this, or at least a process for deciding the regulation of accommodation, will be coming in some time in January, she intimated. And as part of this regulation, properties (apartments for the most part, therefore) will be subject to regulated and legal commercialisation as holiday accommodation in defined areas of resorts. The town halls, she said, would be the ones to decide on which areas.

This breaking down by area has already been given some discussion in Palma. But Palma is a big place. It has discernible areas, be they the old centre, the resort areas and other seaside parts which are less of a resort nature. Other resorts aren't anything like as big, and there is a clue in how they are referred to. They are resorts, full stop. Puerto Alcudia is, and this covers the port area and the main tourism centre a couple of kilometres away and stretches to the border with another resort - Playa de Muro: one continuous resort. There are various other such examples in Majorca.

Will this selection by town halls mean, for instance, that the "pueblos" are excluded? And if so, why? In Alcudia old town's case, as is the same with certain other old towns, it is part of the overall tourist offer in the municipality. Why should it not be included?

A concern may be that town halls end up being guided by the current land regulation known as POOT, which basically refers to a quota system of municipal territory dedicated to touristic development. But POOT doesn't presuppose a continuity of territory: it is broken up into parts. Hopefully, this will not be adopted as the guideline, but even under an alternative system, will the plan for town halls to decide not simply add to the confusion which exists regarding private accommodation for holiday let rather than lessen it? And what of municipalities not currently considered to be tourist centres, those in the interior? There is no current tourist development quota in most of them, while if they have ambitions to develop tourism - Sa Pobla is a case in point - they need flexibility where private properties are concerned because of an absence of hotels. Pilar Carbonell has her work cut out getting all this right.

Self-Service Alcohol: A red herring

So, President Armengol is saying that the government is considering the banning of self-service alcohol in all-inclusives. Here is an issue that was first highlighted by the Calvia councillor who shares the same name as the mayor. He is the Alfonso Rodríguez from the Esquerra Oberta open left grouping, the one who is also the president of the Facua consumers' association in the Balearics.

When this issue first arose a couple of months ago, the reaction to it - in general political terms - was muted. The problem was noted, but it was an issue said to be confined to a few hotels in one resort - Magalluf. As such, any talk of banning or regulating was premature and/or unnecessary. Now, it is said, the practice has spread, and so other resorts are implicated: in Playa de Palma, most notably. Waking up to this more widespread self-service activity, the government is hoping to have a ban in place by next summer.

Am I alone in believing that this is a colossal red herring? The means of making alcohol available is merely an extension of what has existed for years. Be it self-service or via a solitary waiter at the end of a long queue, the consequence is much the same. If holidaymakers want to get drunk on cheap local spirits and beer, then they will.

The greater ease of access to the booze, though, is said to have led to fewer holidaymakers taking to the beach in Magalluf. And the point of this is what exactly? All-inclusive guests going to the beach doesn't mean that they are necessarily spending any money. They are just going to the beach.

There have been some strange observations that have resulted from the self-service affair. We have had the tourism minister saying that there had been attempts to curb the use of plastic glasses in all-inclusives because they give the impression of low-quality tourism. Far better to have proper glasses, but these are dangerous around or in a pool. So plastic glasses have been retained, but, and Barceló said this, it was "surprising" that guests would use these plastic glasses, fill them with alcohol and turn pools into scenes of real drunkenness. Surprising?

The point with self-service is that one of the biggest complaints guests have with all-inclusives at the low end of the offer is the queuing for service. Hotels typically allocate minimum staff numbers to bars, a reason being that they employ the minimum number possible because all-inclusive isn't terribly profitable for them. One would guess they've made cost-benefit analyses and concluded that it is cheaper for guests to fill their boots with all the alcohol they can consume than it is to employ a meagre number of bar staff.

Behind all this sudden concern regarding guest alcoholism and bingeing is, as I've noted before, just as much if not more concern for jobs. Which is fair enough, but the attention now being paid to self-service alcohol makes me suspect that the government will single this out and champion it as the government regulating all-inclusives, while ignoring any other regulation. It is, in a sense, easier to target specific consequences of all-inclusive than it is to get to grips with all-inclusive per se. Hence, it is a red herring, but a convenient one for the government.

Armengol went on to say that a ban on self-service would come from analysing regulatory gaps that apply to all-inclusives. And these are? How can there be gaps when there isn't regulation. Tourism legislation barely mentions all-inclusives and it certainly doesn't have any specific regulation. She's talking nonsense. At least Jaume Font of El Pi appears to have more of an appreciation of the issue in calling for wider regulation in time for next year.

Again this is fair enough or would be if it weren't for the fact that holidays are being booked on the basis of what is currently the situation, not on what it might or will be in a few months time. It is the same with the tourist tax and does, therefore, give rise to the potential for misrepresentation. Tour operators will be livid. Introducing regulation has to have a longer timeframe. 2017 not 2016.

But we still come back to what regulation for all-inclusive there might be. No one knows. Just as no one truly knows the extent of all-inclusive or its type. Font has called for there to be a register of hotels which offer all-inclusive, which begs two questions. One is why there hasn't long been one, and the second has to do with the fact that this was supposed to have been undertaken. Early this year Jaime Martínez, the former tourism minister, said that it would be. Were there to be a register though, what would then be done with the information?

Perfect Propaganda: Holiday lets

The recent horror story in the "Majorca Daily Bulletin" of sisters Emily and Daisy Wolton and their nightmare with a holiday apartment in Palma would make perfect propaganda for the Mallorcan hoteliers and the Exceltur alliance. Prime opponents of the private accommodation sector, the story had it all: no control of standard of accommodation; misleading representation; no comeback. It would also make perfect propaganda for others, including Aptur, the association which represents owners of private accommodation for tourist rental, and Biel Barceló, the minister of tourism. If none of these organisations or individuals have seen the article, they should all be sent a copy.

For the hoteliers and for Exceltur, it was confirmation of all that they have said about the poor quality of accommodation that is on the market, about an unregulated sector that does not abide by any rules, about properties which give Mallorca a bad name. One example it may be, but one example can often be sufficient to deter other visitors, once the information enters the public domain either through established media channels or social media. The Wolton sisters made the point that they have previously had good experiences with renting accommodation, but one bad experience can be enough to make regular visitors wonder about returning.

For Aptur, the case only harms its own objective, which is to obtain a system of regulation which is more permissive in allowing the proper commercialisation of tourist accommodation. It is as against poor standard properties as the hoteliers, even if it is coming at the issue from a different angle. For Barceló, it would be likely to add to his concerns about tourist saturation, the consequence not only of Mallorca having been this summer's refuge for visitors put off by events elsewhere. The saturation is not a product of the hotels with their finite number of places, it is one of a market which, while also finite, gives an impression of growing infinitely. Mallorca and the Balearics are said to have the most private properties for tourist rental of Spain's regions, with Palma the most popular specific destination. And this despite the law. (42% of all visitors to Spain who book apartments do so in Mallorca, according to research by the Esade business school.)

The Wolton sisters wondered who they could complain to. The tourism ministry would be the first port of call. But how do they denounce what has happened? With regulated establishments there are complaints' books and information as to how complaints can be registered. Unregulated, and there is none. A review on Trip Advisor can be a response, but where on Trip Advisor? And who would take any real notice? Users look at hotel reviews, but some individual apartment in Palma? And a review doesn't, in any event, undo the damage.

We know that Barceló is looking at changing the law in order to facilitate proper commercialisation rather than there being merely the loophole (often itself abused) of the tenancy act. But he is as alarmed as anyone at the flood of accommodation being made available and at the poor quality of some of it and so the harm it does to Mallorca's image. He wants regulation in place for next year's summer season, in which case he will have to get his skates on. Even with regulation in place, though, there will still be the non-regulated supply. Catalonia, which has a system of property standards and of registration, has found that this doesn't prevent a flouting of the law. But Barceló needs to act. The supply of accommodation is out of control.

All-Inclusive: What Are They Going To Regulate?

I once said that I would never write about all-inclusives again. It had all been said. There was nothing more to say. Over a period of what is now some ten years, thousands upon thousands have been the words I have produced. They have been in consideration of law, of markets, of tour operators, of hotels, of government, of customers, of historical development, of the "complementary offer", of the wider economy, of morality and ethics, of service, of quality, of economic crisis, of the futuristic concept of the "super all-inclusive", of the research findings from the university in Palma and from studies in different parts of the globe that have examined the effects of all-inclusive. Nothing more to be said. How foolish I was to presume that.

Politicians, government ones and town hall ones, have suddenly discovered all-inclusive. Where have they been for the past generation? Observers of different types keep discovering all-inclusive and keep saying the same things that have been said year upon year upon year, stretching back to the last millennium. Round and round and round it goes, a carousel of opinion being regurgitated from mouths that were long ago expressing the now hackneyed insights offered.

In the Balearics, Benidorm and the Canaries, politicians and others are hard at it, discovering the political and moral high ground to be gained by alluding to "regulation". At last, it is said. Where were they in the past? Where were they in Mallorca when the then president of the hoteliers federation (circa 2004, I don't recall the exact date) was making it abundantly clear that all-inclusive was the "future"? By then it was already the past as well. The johnny-come-latelys of the all-inclusive intervention industry attribute much of the "blame" to economic crisis, when this merely strengthened the offer rather than created it. Recession of the early 1990s, it might be argued, was when - in European terms, including Mallorcan - the creation occurred (Club Med and all that notwithstanding).

What are they going to regulate? How are they going to regulate? Out of the mouths of politician babes newly and innocently installed in government and town halls comes the regulation word. Regulation with its own regurgitative homophonic quality; they are all-inclusive sick all down the newly acquired bibs of office. Regional government, Calvia, Manacor. What are they going to regulate?

In Alcudia a party which stood at the municipal elections was one that had been largely born out of a desire to regulate all-inclusives. It has support from local bars. Its mayoral candidate was a bar owner. I know him well. He has my sympathy in his aims, but I have never got a satisfactory answer to the question - how? Town halls cannot regulate the type of board that a hotel offers. They have no competence in the matter; only the regional government can. In Benidorm, they have at least had the good sense to say that findings from the study that is to be undertaken into all-inclusive will be forwarded to the Valencia administration.

But there is a world of difference between saying the government can and saying that it will. Such is the harsh reality of modal verbs and of the market. Yes, the market. Remember that?

While the arrival of leftist coalitions has been the springboard for the renewed attention being given to all-inclusives, my guess would be that there are any number of all-inclusive critics who are otherwise firm advocates of market liberalism, a distinctly non-left philosophy: the market economy, the free market, and the adherence to it enshrined in national and European law as well as, in Spain, the Constitution. Is there to now be a pick 'n' mix of statist and market economies? Perhaps there should be. Yet already we have witnessed how the reality intrudes into statism as applied to tourism. Syriza. They were going to do this and that to all-inclusive. They very quickly changed their minds.

There is an article on the Hosteltur website by Antonio Garzón*. He is a regular writer on tourism issues and he also has a strong background in the hotel industry in the Canaries. He might be considered not entirely independent, therefore, but his article is worthy of attention as is the heading to the original article from his blog: "All-Inclusive, Electoral Slogan".

The thrust of his article is that the market decides, which is a simple enough theory. He posits the question - Is regulation of all-inclusive compatible with a market economy? Let me leave it to you to answer this, but in so doing you might take into account legal and market reasons why bans on, limits to, standards for, prices (through the artificiality of tax) demanded of all-inclusives would be devilishly difficult to impose. What are they going to regulate?

* http://www.hosteltur.com/112204_todo-incluido-espana-cinco-dilemas-si-se-quiere-regular.html

Who Shouts Loudest? Magalluf

A previous article - "Rethinking Architecture" on Tuesday - was prompted by a workshop that was to be launched the next day to consider the architectural future of Magalluf. As I said in that article, such a consideration should apply to many other resorts. Magalluf, on architectural grounds, shouldn't be singled out and nor should it be for other reasons. Unfortunately it is, and by unfortunate I don't mean the negative issues the resort faces, I mean the fact that it is Magalluf and seemingly only ever Magalluf.

At an open debate that was staged, architecture was one of the last things to be discussed. Attention turned, as it so often does, to one of the key issues for Mallorca's tourism - the all-inclusive hotel. While there may be specific reasons for this being a hot topic in the resort at present, e.g. the unlimited alcohol fuelling a young tourist market that mayor Rodríguez would like to at least limit if not get rid of altogether, it is no more a key issue in Magalluf than it is in many other parts of the island. Arguably, it is less of an issue there than elsewhere.

Magalluf, and the same can be said for other Calvia resorts, was for years relatively unaffected by all-inclusive. Going back to the time when this type of board first came to Mallorca - the early 1990s - it was a phenomenon in the north and east. Parts of the island that can be conveniently ignored. Just as they are now. Magalluf shouts loudest and everyone shouts loudest about Magalluf.  

You cannot of course fail to understand why there is such a focus on one resort, but it is a focus which does Mallorca no real favours because of the neglect of other resorts. The workshop itself, and the attention afforded to it, is representative of this. Were it to have been held in and to have been about, for example, Alcudia, Can Picafort, Cala Ratjada, Cala Millor, Calas de Mallorca, no one would have paid it any attention. Yet here are resorts just as badly affected by architectural lack of forethought and by all-inclusive: more so in fact.

It is, some will say, all the fault of the media. True, it is. But only up to a point. The media reflects the twin obsessions of politicians and the tourism industry - Magalluf and Playa de Palma - but it will naturally tend to follow who shouts the loudest. In Magalluf, all sorts of groups do this - hoteliers, business associations and so on. Shouting elsewhere is muted. In Alcudia bay hoteliers there are noises from time to time but not consistently loud ones. As for all points south along the east coast from Cala Ratjada? Barely a murmur. 

As for the debate, one of the more revealing points was when the president of the local hoteliers' association was challenged over an observation that you cannot swim against the tide of all-inclusive. Yes you can was the reply. In a nutshell, this summed up what has been the case for far too many years: a resignation in face of tour operator power that, more often than not, coerces hotels into supplying all-inclusive even if they are not well equipped to do so, or to do so to satisfactory levels of quality and service.

The new tourism minister, Biel Barceló, has promised regulation of all-inclusive. Good. It's about time. But this should not mean a ban. Idiotic talk of bans is just that - idiotic. There has to be a compromise, and the route to this lies with standards of quality and service. Apply them correctly and strictly, and much of the current three-star all-inclusive would disappear. Harmful to Mallorca's tourism? Maybe it would be, but if there is a call for regulation, it cannot discriminate between hotels where the youth market gets plastered and others where families enjoy cost-effective holidays. Nor can it discriminate between resorts. Not that it would be able to. When a mayor like Rodríguez himself speaks of all-inclusive regulation, he knows full well that the town hall has no competence in this regard: it can only be effected island-wide by government. Will it happen? It would be good to hear voices from the north and the east of the island making their views known.

Tourist Tax On Hold?

Those fearful that a tourist tax is about to be suddenly applied need not be too alarmed. This, at least, is the implication of what Balearic vice-president and tourism minister Biel Barceló is saying. He first wants to introduce proper regulation to the non-hotel accommodation sector before such a tax is introduced.

There is a great deal of sense in this. Firstly, such regulation would go some way to ameliorating hoteliers' concerns that it will be they who bear the brunt of a tax: under its previous incarnation, they bore all the brunt. Secondly, if more properties come to be registered, then the regional government will be able to raise greater revenue from the tax. This would mirror the situation in Catalonia, where a more permissive regime in terms of which types of property could be registered as private holiday accommodation was driven at least in part by a desire to maximise revenue.

Essentially, therefore, two of the great controversies of Balearic tourism will coalesce and form one massive controversy. The hoteliers, while they might be reassured of a determination on behalf of Barceló to be as inclusive as possible when it comes to the application of the tax, will not take kindly to a system which may establish a register of holiday accommodation that they have, for years, sought to prevent.

In practical terms, as far as tourist tax implementation is concerned, if it is to be dependent upon the registration factor, then this will now occur some way down the line. Legislation for accommodation regulation will take time, and even greater time will be needed for it to be into effect. Property owners, one would imagine, would be given a reasonable period of grace in order to comply with whatever this legislation might entail, and if it were to also include a quality system - akin to Catalonia's - which identifies the standard of accommodation and its services, then this would add further time.

The heat being generated by both issues has been increasing in line with the temperatures of high summer. Exceltur, a body which represents some pretty exclusive hotelier interests, has been going full frontal with its propaganda against private accommodation. While some of what it and its researchers - Ernst & Young among them - have to say is perfectly legitimate, but the animosity towards alternative accommodation and especially P2P services such as Airbnb doesn't do it total credit, and there is research which takes issue with its apocalyptic (for hoteliers) vision. Still, Exceltur does accept the need for proper regulation and a further need to eliminate the confusion that surrounds private accommodation rental, something that is heightened by the lack of standardised regulation across Spain as a whole.

Exceltur's latest broadside is to report that Palma has the highest level of illegal rental in the country, something exacerbated by the sheer lack of inspectors. In this regard its report is not wrong and it exposes one of the great fault lines in governmental desires (those of the previous government) to get tough. The new government faces exactly the same issue, and whether it is regulation on private accommodation, tougher standards for all-inclusives or whatever, the sheer impossibility - on cost grounds - for there to be an army of inspectors will always render much legislation all but redundant.

Given this, it is more urgent than ever to introduce some pragmatism to legislation. By reducing through more sensible regulation the amount of accommodation deemed to be illegal, then the accommodation which remains genuinely illegal would be easier to monitor: all things being relative.

Barceló will have doubtless taken note of opinions expressed by mayors of some of Mallorca's principal tourism municipalities - Alcúdia, Andratx, Santanyi among them - who advocate new forms of regulation for apartments. He would do well to sit down with these mayors and counsel their views. It is no longer the case that certain towns, e.g. Pollensa, have a disproportionately high amount of private accommodation: P2P and economic crisis have widened the supply across all towns.

Arriving at something like satisfactory regulation will not be straightforward, making a delay to the introduction of a tourist tax potentially even longer. And one hopes that as and when regulation is drawn up it isn't as woolly as the thinking currently being applied to the tourist tax and how it would be collected. Basically, the government doesn't know what sort of mechanism would be best and whether it might have to rely on the agreements of authorities like AENA in order for the tax to be levied on arrival, a mechanism which, for a variety of reasons, would in any event be undesirable.

When A Law Isn't A Law

A peculiarity of Balearics legislation is that it isn't as legislative as it might appear. Laws are drafted, debated, red-drafted and then presented, approved and posted onto the Official Bulletin, but they do not end there. Indeed, this can be only the beginning of the process. This, at least, is what we have to accept is the case with Balearics tourism law. Approved in 2012, it seems that it was more of a consultative document than the real thing. Representatives of various tourism and business associations met tourism minister Jaime Martínez on Tuesday and they expressed their approval for the law, three years after it had been approved. Or so we had thought.

The key to all this lies with the word "regulation". This might seem to be synonymous with legislation, but it would appear that legislation needs to be regulated. Confused? You should be. The final and definitive contents of the 2012 law will be revealed next month, and to add to the confusion, we understand from minister Martínez that the 2012 (2015) law will in fact be the first regulated tourism law in the Balearics because the 1999 tourism law "did not develop regulations". Meaning what precisely?

Legislative lunacy aside, it might be noted that not all the associations who met with Martínez or had met with him during the process of regulating the legislation are in total agreement with the regulations. Most are, but then most will be getting what they want, like the hoteliers. Among these associations was APTUR, the one for the renting of tourist apartments (holiday lets). It is probably safe to assume that when April comes they will not be singing the law's praises.

The timing of this regulation has not gone unnoticed. Firstly, it will be issued just as the season gets underway and secondly, it will appear just weeks before the election. The timing is, therefore, both poor but also expedient - the PP is ensuring the law is fully regulated just in case it loses the election and some other lot discovers that the law hadn't been fully regulated and so applies different interpretations.

Martínez maintains that the industry has been willing to work towards achieving "consensus", but as he also says that the law marks commitments to quality and against "illegal supply and unfair competition", one would have to doubt that there is consensus. The holiday lets issue apart, it will be interesting to know exactly how fears of the non-hotel complementary sector have been addressed in respect, for example, of the so-called secondary activities in hotels which pose a direct competitive threat to the complementary sector. The chances are that they won't have been or this would have meant backtracking on what the 2012 law supposedly permitted and which has been taken as the green light by certain hotels: the Cursach BH Hotel being a prime example because its activities will be open to non-hotel guests, which is what secondary activities refer to.

New Holiday Let Regulation Is Imperative

Last year I was involved in a public debate about holiday rental accommodation in the Balearics which, to be perfectly honest, was a bit of a waste of time. The intention had been good but the debate, such as it was, became mired in the sterility of law and took too little account of what should be central to such a debate - tourism and tourists.

The law is of course hugely important, but it is the law - different regulations, contradictions the law permits, its lack of clarity - which is at fault. It's small wonder that any debate is reduced to dissecting points of law, because - and despite the claims of the tourism ministry and some lawyers to the contrary - the law is not well enough understood, while it is also open to wholesale abuse.

A debate held last week featured professors from the university; the vice-president of the Mallorcan hoteliers' federation, Inma de Benito; the tourism minister, Jaime Martínez; the tourism minister in Catalonia, Marian Muro; the president of Fevitur (Federación de Asociaciones de Viviendas y Apartamentos Turísticos), Pablo Zubicary. It was really no different to previous debates. Law, law, law.

It should now be obvious that laws in the Balearics which apply to holiday rental accommodation are inadequate. One of these laws, the Ley de Arrendamientos Urbanos (often referred to as the Tenancy Act), creates as much abuse as the prohibition on apartment rental specified in the tourism law. The unreal nature of this law and of the principle of "family and friends" being able to occupy holiday accommodation (which shouldn't be defined as such) has led, as an example, to the situation in Sóller which was reported last week. Well over a thousand places (i.e. beds) are offered and taken up by visitors who are anything but family and friends.

The obfuscation that applies to holiday rentals has long been, one feels, something that has suited the regional government. Martínez, recently given a ticking-off by the Chamber of Commerce and told to make things clearer, attempted to do so (or claimed that he was), but failed. Quite deliberately, one fancies. Keep things opaque, the market will be confused, the government can act against owners if it so wishes, and the hoteliers will be happy.

At the debate last week, Martínez and de Benito were in the minority. The professors, Muro and Zubicary represented the pragmatic and common-sense side of the debate. Muro's presence was perhaps the most important, as her government in Catalonia has adopted regulations which have been acting as a type of benchmark for other regions to follow. It is permissive while at the same strict in applying standards and demanding proper registration of all types of property. Also last week, we learned that the Canaries, where there has been resistance against holiday lets of a similar level to that in the Balearics, were moving to regulate. Those islands may not adopt the same system as Catalonia, but it was revealing that Catalonia's model was referred to in despatches.

The development which more than any has made it imperative that there is some form of pragmatic regulation that is more permissive and is very much clearer is the P2P phenomenon. It has undoubtedly given rise to far more property coming onto the market via the internet, much of it unregulated and illegal. So, faced with the additional dynamic that P2P brings, what does the regional government do? Draw up a black list of all websites that may be offering unregistered properties. What it doesn't do is move towards a sensible form of regulation, thus reinforcing prohibition which leads, as all prohibition does, to an ever-expanding black market.

De Benito's presence at that debate was also important. She is likely to become the new president of the hoteliers' federation and she has been the principal source of anti-holiday rental propaganda that has been emanating from the federation. However, both she and Martínez must know that things could change. If the Partido Popular is ousted from the regional government in May, which in all likelihood it will be, the new government will be dominated by PSOE, recent converts to the pro-holiday rental lobby, and the two other parties which will matter, Més and Podemos, neither of them allies of big business and so therefore the hoteliers.

Because of this potential change in government and governmental policy, de Benito's role is now more significant than that of Martínez. She will hope to get PSOE onside, but she's battling against a tide of sensible regulation adopted elsewhere. The need for proper and clear regulation, one that establishes standards, correct registration, transparent marketing and also safeguards for owners, both those who rent out and those who don't, is indisputable. Obfuscation will no longer do, unless the government wishes to expand the black market.

Martínez Clarifies ... Or Does He?

Balearics tourism minister, Jaime Martínez, who has succeeded in elevating obfuscation to new heights in tourism legislation - a significant feat, it should be said, given the opacity with which this legislation has traditionally been drafted - was answering questions earlier this week which were supposedly going to clarify some of the less clear aspects of the latest round of Jaime tourism legislation. Specifically, there was the issue of holiday lets, about which Jaime admitted that there might just be a little lack of clarity, though it might be noted that he had been told in pretty much no uncertain terms by the sensible people at the Chamber of Commerce that he needed to make things clearer, while, or so I understand, there are those within his own ministry who are far from impressed by his leadership and who have also urged him to create greater transparency.

So, what did we get? Jaime said that there wouldn't be any of this business about properties having been built before 1960 or getting permission from neighbours, which was something we already knew, as Madrid had told him he couldn't make such legal provisions. He then went on to explain that there will be a softening of the law, accepting that there are concerns with how holiday apartments can be marketed through websites and other media. He was making reference to the prohibition on the use of terms such as "holiday" or "vacation", and appeared to suggest that such terms will now be allowed. But was he only referring to properties rented out under the Tenancy Act or was he referring to a broader scope for allowing owners to rent out without running the risk of being fined? It was probably the former, but as Jaime Land is one of confusion, we are still unsure. One thing he did suggest would happen would be that future regulation would include a list of "channels" which would be prohibited in order to remove any doubts. Which meant? Hard to say for the moment, but you never know, there may come a time when the legislation is all crystal clear, though you wouldn't bet on it.

Holiday Lets Confusion And Challenges

When Balearics' tourism minister Jaime Martínez said that there was consensus regarding holiday let legislation envisaged in the new tourism decree, we knew that he was talking nonsense. Confirmation of this has come from the non-hotel complementary offer of tourist attractions, restaurants, clubs and retailers which met at the Chamber of Commerce on Tuesday and which today will present its challenges to the decree. These will include a demand that owners of private apartments be allowed to commercialise these apartments as tourist accommodation and advertise them as such through promotional channels such as websites.

The complementary offer also wants movement in two other areas - all-inclusive and hotels' secondary activities. On the first it is calling for minimum quality standards and a minimum period during which all-inclusive can be offered. This latter provision would tackle what does happen in some hotels whereby daily all-inclusive can be obtained. As far as minimum standards are concerned, Martínez has alluded to their introduction without as yet specifying what they might be. On secondary activities, such as having a club or restaurant that is open to the general public, the complementary offer wants a ban placed on keeping these activities going when hotels are otherwise closed, and so is insisting that there be a specific licence which allows them to keep going.

There has been a good deal of other news about the holiday-let situation over the past few days. A detailed study of the situation across Spain by Barcelona-based lawyers Iuristax suggested that the differences in regulation in the various regions of the country could be harmful to the Spanish economy. Their reasoning is quite simple: the different regulations lead to a lack of clarity and to a rise in confusion. Without a harmonised approach there are bound to be discrepancies in control and quality, and these could do a great deal of harm, leading to tourists choosing to opt for alternative destinations having had less than satisfactory experiences.

This lack of harmony was going to be evident from the moment that the national government handed responsibility for regulation to regional governments. It was a strange thing to have done, given, as I have pointed out previously, that residential tourism was identified as a strength of Spanish tourism in the national tourism plan drawn up by the current Spanish Government. The consequence of this is the chaos of different regulatory systems.

From the national confederation for hotels and tourist accommodation (CEHAT) has come a finding that demand for holiday lets is greater among Spanish tourists than foreign visitors. While hoteliers might view this finding with concern, it should also be taken as an indication that the domestic tourist market, which has been in the doldrums for a few years, is genuinely recovering. It was up by around 10% in August.

And coming back to the chaos of different systems, in the Community of Madrid, the association of tourist apartment businesses is taking the regional government to court over its regulations. Moreover, the national competition commission has now got involved. It is studying the text of the Madrid regulations and is seeking detailed explanations from the government. This in itself could be an interesting move. The competition commission has, thus far, stayed out of the holiday-lets arguments. If it becomes more closely involved, it might just make certain regions act rather differently.

Balearics Out Of Step On Holiday Lets

Something significant has happened in the Canary Islands. The regional government headed by Paulino Rivero has announced that it will regulate private holiday accommodation in the islands. The draft legislation will be ready before the end of the year, Rivero's government having given a commitment to this effect to the Canaries association of holiday rentals.

Rivero had signalled his willingness to consider such regulation some time ago. That his administration is now going to turn this willingness into firm legislation does mark a very significant moment for Canaries' tourism. Those islands have typically been as antagonistic towards the private accommodation sector as the Balearics. But even more significant is the fact that the Canaries will join Catalonia, Valencia and Andalusia in either having a system of regulation or being on the point of introducing one. Of the five main sun-and-beach tourism regions of Spain, the Balearics will be the exception to the rule. Other regions of Spain, among them the less sun-and-beach-dependent Basque Country and the not sun-and-beach-dependent-at-all Madrid are also in the process of regulating.

As ever, it is important to point out what regulation means or might mean. It doesn't mean stamping out (this is a commonly made mistake by some commentators who confuse the term regulation with prohibition). It means putting in place specific rules governing the rental of private accommodation for holiday purposes, Catalonia's regulation being the model that other regions are inclined to follow.

With the Balearics out of step with other regions, might there be a change of heart here? Not while the current government is in power. But what might happen following the next regional elections? It's anyone guess at present to try and figure out what sort of hybrid shambles of an administration might emerge, assuming the PP doesn't win (and it looks unlikely that it will, or be in a position to carry on in coalition). But PSOE, at the heart of this probable unholy alliance of Podemos and the left collective of other parties, would be inclined to go down the regulation route. Put it this way, it voiced its support for a relaxation in rules when all the tenancy act furore arose last year.

It's some time off, but the holiday-lets issue could yet prove to be a major political matter come next spring. The hoteliers, for one, will be doing all they can to try and ensure the PP stay in power. But if doesn't, then there's going to be one hell of a fight between the hoteliers and a PSOE-led pact.

Stemming The Tide: P2P tourism

"We are not pretending that we can hold back this unstoppable tendency. It would be like trying to stem the tide. But we ask that there is regulation because it is big business."

These are words from a statement by Spain's national hotel federation (CEHAT). They are a coincidence. I used the tide analogy myself the other day. It was in the context of holiday lets and of the rise of P2P tourism, a phenomenon that, if you believe some commentators, threatens to overwhelm traditions in the tourism industry.

P2P, in its original internet incarnation, meant peer-to-peer and the sharing of computer files. In its tourism guise, it still means this, but it also means people-to-people. The internet is fundamental to its being. P2P websites act as intermediaries for putting customer in contact with supplier, tourist in touch with property owner. And the property could be anywhere and of any description. From a room in a flat to a villa, P2P can provide it.

The websites work on the basis of commissions on transactions. There are now many of them, but the first of them, and the best known, is Airbnb. On its site for Mallorca, there are more than 1,000 properties of various types. The growth in the number has been staggering. It could only have been a couple of years ago when I wrote about Airbnb and found that there were fewer than 50 properties.

P2P has helped to grow the number of foreigners renting tourist properties in Spain by an equally staggering amount: 44% in the past six years. While economic crisis has been cited as a reason for the rise in the number of properties being rented out, P2P, especially in the past two to three years, has been just as important. The size of the P2P market is growing so fast and is now so large that it is impossible to keep tabs on.

It is instructive to read the words of the national hoteliers. They are at least realistic in understanding the scale of P2P. They want regulation, but regulation is going to be extremely difficult. The very term "P2P" should offer a clue as to this difficulty. P2P has been with us for several years and it has been at the heart of illegal downloading and file sharing of music and films. Regulating this illegal activity has been and remains complex. Not all P2P rentals are illegal insofar as many properties will be registered with a local authority, but an awful lot are illegal. The Balearic government, which talks boldly about monitoring websites, hasn't a hope of stemming the tide. It may as well wise up, regulate apartments with its own legislation, and at least try and ensure some control.

Though authorities have had some success in curbing illegal downloading and in either banning, blocking or limiting the scope of websites, the P2P tourism sites aren't necessarily engaged in anything illegal. While the offer of a property may be illegal in one jurisdiction, it won't be in another. P2P is nigh on impossible to curb.

Nevertheless, efforts are being made, and Catalonia is to the fore in making them. This region, which has been pioneering in the way that it has regulated and permitted so many private apartments for tourism rental (there are some 200,000 different types of property now registered in Catalonia), is fully aware that, despite its permissiveness, there are still many property owners who want to flout the law. It is also aware of the problem posed by P2P. It has opened proceedings against 55 websites and works with the national government and the European Union in seeking some control of websites.

Those sites which argue that they are mere intermediaries and bear no responsibilities are, as far as Catalonia is concerned, contravening consumer and information laws in that they have to ensure that information is accurate and truthful, and an element of this is the provision of a property registration code issued by the Catalonian government. These codes are, by the way, also used in the Balearics, though not of course for apartments. If there isn't a code, then the property is deemed illegal. 

P2P is seen within the tourism industry as being representative of a new generation of travellers who aren't interested in packaged tourism. The values system of the so-called Millenials has been much discussed, but is it really any different to previous generations? I have my doubts. But P2P does pose threats to traditional parts of the tourism industry. Travel agencies are clearly threatened, but then they need to embrace P2P, not fight it. By the same token, governments, such as the one in the Balearics, need to appreciate what P2P entails. This means control through local regulation, not bans. You can't hold back the tide.

Divorced From Reality: Holiday lets

I have the power of prophesy. A couple of weeks or so ago I wrote that "around this time of the year the Mallorca hoteliers federation leaps into propaganda action by issuing dire warnings about the consequences of the so-called illegal offer". And what do you know? They have leapt. I shouldn't be immodest. I don't have the power of prophesy. It is predictable and pathetically so.

Predictability has not been occurring in the Canary Islands which, those of you who are observant will have noticed, share certain things in common with the Balearics. Yes, they are islands. They are also remote and they also have a track record of taking a hard line against holiday lets. Their greater remoteness does place them on the European periphery, but nevertheless, I have been surprised at the almost total lack of attention that has been paid to the approval from the European Commission for there to be subsidies of landing fees for new routes to the islands. The Balearics aren't on the periphery in quite the same way, but their isolation causes the same issue of connectivity. Has anyone here been taking note of the Canaries' subsidies? Perhaps they have, but as these are paid by the regional government there, the one here would probably rather not know.

I have also been surprised at the fact that news that the regional government in the Canaries is edging towards legalising holiday lets has been given a similar lack of attention. There is a way to go, but the president of the Canaries, Paulino Rivero, is to meet representatives of something called the Plataforma para la Regulación del Alquiler Vacacional next week. The platform is encouraged, and the stance against holiday lets in the Canaries does appear to be softening in the face of a petition with more than 16,000 signatures and what has been a co-ordinated effort by the platform to publicise its cause.

If the Canaries were to go down the path of regulating holiday lets, the region would join three of the other four main "sun-and-beach" tourism regions in having some form of permissive regulation. Catalonia, Valencia and Andalusia all have systems of regulation. (Andalusia will actually approve its "decreto de viviendas de uso turístico" after the summer, but this is a formality.) The one other region, the Balearics, would therefore be on its own in having legislation which prohibits apartment holiday lets. It would be isolated. Remote.

When national government washed its hands of the whole holiday-rental issue and handed over responsibilities to the regions, it created even more confusion than had existed regarding a subject that was already crowded by confusion. In abrogating any responsibility, it acted in a manner totally contrary to its own tourism plan, one through which legislative harmony and standardisation was to be pursued. Pity the poor old tourist (as well property owner) who has to understand not one but several legislative systems in order to do something as simple as go on holiday.

Confusion, I think it fair to say, is a state that satisfies the tourism political class. It certainly appears to in the Balearics. Where the rental of apartments is concerned, the confusion has been made that much greater since the head of the Balearics estate agents association said recently that he understood that the tourism ministry would not be going around fining anyone for illegally renting out property this summer. Now, inevitably, we have the hoteliers engaging in their ritualistic, annual utterances of illegal-offer high dudgeon. 

Confusion is one thing. Divorced from reality is another. In the Balearics, tourism politicians have long since given the impression of existing in an unreal other world (think PSOE's Celesti Alomar, for example), but now there are other realities that they flatly refuse to accept or, more likely, understand. The market for accommodation rental, and not just for holiday apartments, is being turned totally on its head because of the so-called P2P market, e.g. the likes of Airbnb. To insist on maintaining the outlawing of private apartment rental (in a transparent, regulated and properly commercialised fashion) is an attempt at holding back the waves, when instead the tide should be allowed to come in in an orderly and regulated fashion.

In other regions, they seem to understand this. They have sought to reduce the confusion, not add to it, and if the Canaries were to go the way of Andalusia and the others, then the Balearics would be shown up for what its tourism politicians have made it: out of step with reality and wholly subservient to the commands of the hoteliers. Possible changes in the Canaries are going unnoticed, because in the Balearics, they don't want attention being drawn to them. Well, I have. And for my next prophesy ... 

Aragon's Solution For Tourist Apartments

Aragon is a strange region of Spain. Historically, it vies with Castile in terms of importance. It was the fifteenth-century marriage between Ferdinand of Aragon and Isabel of Castile which brought about a union that created something approximating to a Spanish state, though it was to be over two hundred years before a truly centralised Spain was formed, and one that was formed at Aragon's expense.

This was a land that once upon a time had its own kingdom and more importantly crown. It was the Crown of Aragon under which Catalan-speaking regions - Catalonia, Valencia, the Balearics - were joined. It was a crown that was dismantled as a consequence of the War of the Spanish Succession and of the formation of a centralised and Castellano-speaking Spain.

Mallorca has a strong association with Aragon. It was Jaume I of Aragon who liberated Mallorca and the Balearics from their Islamic occupiers and Jaume who introduced Catalan to the islands. Yet despite its history, Aragon lacks things that Catalonia and the Balearics have. Politically and socially, there is not a strong Catalanism. Indeed there is only the one official language - Castellano - though there is a growing awareness of the Aragonese dialect. Economically, there is not a reliance on tourism. Aragon isn't terribly well known and it doesn't have a coastline.

Aragon is the fourth largest region of Spain but its population isn't vastly greater than that of the Balearics. It is a region dominated in its north and south by mountains. In its centre there is a semi-desert area. It was here that the Gran Scala, a tourism complex of hotels, casinos, theme parks and golf courses, was due to have been built. It won't be. In truth, it was probably never viable.

Gran Scala would, though, have placed Aragon on a tourism map in a way that it otherwise isn't. In its absence, the regional government set about initiating a plan for tourism earlier this year, one with the goal of forging a distinct identity and brand and with the intention of putting in place regulations for accommodation. Hotels, many of them in ski resorts, are one main aspect of this. The other is tourist apartments, otherwise known as holiday lets.

From a tourism point of view, Aragon is in no way comparable to Mallorca and the Balearics, but it shares one thing in common - a requirement to regulate the use of private accommodation for tourist use.

The legal reform by national government by which responsibility for regulation was farmed out to the regions was peculiar in one particular way. Nationally, residential tourism is considered to be a strength (it says so in the government's tourism plan). But Madrid was in an awkward position. It could not pass a law applicable nationwide because it knew full well that the strength it spoke of under the national plan drawn up a year before would have been compromised had it simply complied with the demands of the strongest hotel lobby groups, most obviously the one in the Balearics.

Instead, it placed regulatory onus on the regions, no doubt aware that some regions would institute legislation which did indeed compromise this "strength". The Balearics had already done so. Other regions, without similar laws to the Balearics, are now catching up, and one of them is Aragon.

The mere mention of "regulation" may be taken as implying a tightening-up and a restriction. But it doesn't have to. Tightening-up has occurred, as in Catalonia, in respect of standards, but regulation has meant permission not prohibition. Aragon's own law that regulates tourist apartments was passed on 22 October. It is a comprehensive piece of legislation but it is not overly proscriptive. Indeed, what it does is to establish four categories of apartment with specific requirements that have to be registered with the regional tourism ministry. And importantly, the Aragon law outlines minimum services that these apartments must have. This is important because, by comparison with the Balearics, as soon as services are offered here a private tourist apartment becomes in effect illegal.

It has been noted in a report by La Caixa bank that the level of tourist stays in unregulated apartments in Aragon is almost three times as great as those in regulated accommodation. The importance of these tourist apartments is therefore undeniable. And the Aragon government has recognised this importance.

Aragon is very different to Mallorca and so it has adopted regulation very different to Mallorca's. But it is regulation which goes to reinforce the incoherence and confusion that national government has brought about. Residential tourism is a strength but only if a particular region agrees that it is.

Holiday Rentals: Now they go international

The Spanish Confederation of Hotels and Tourist Accommodation (CEHAT) has issued a report in which it says that holiday rentals that are not within the law generate a black economy sum of almost 3,000 million euros.

This is a staggering amount of money, so staggering that it is hard to know what it actually refers to. Is CEHAT saying this is an annual sum? As always with these amounts that are thrown into the media fire, they are designed to stagger without substance being offered to support them or to explain them. Let's just accept, though, that there is a lot of black money associated with holiday rentals; it is undeniable.

This 3,000 million is from the "oferta alegal". The use of "alegal" is not unimportant as it doesn't mean the same as "ilegal". It means "not within the law" and can also mean "unregulated". The distinction is important because across Spain many holiday rentals are "alegal" in that there is no legislation in several regions of the country that expressly deals with this type of accommodation. There is one region, however, that does have legislation, and we are of course familiar with it: the Balearics tourism law.

The need for regions to have their own laws is one consequence of the reform of the national tenancy act. Madrid, by this reform, effectively abrogated any responsibility for holiday rentals, placing this responsibility with regional governments. It was a reform that had the support of the hoteliers (some might say that it was a reform drawn up by the hoteliers) as, in certain parts of Spain, the hotel lobby is all powerful, e.g. in the Balearics, and heavily influences regional legislation.

It was a reform, however, that was curious in one particular way. The national plan for tourism, published in June last year, identified "an increase in residential tourism" as a strength of Spain's tourism. Though the plan's document avoided reference to holiday rentals, concentrating instead on second homes and on family use of such homes (permissible under the tenancy act), this type of tourism is only an element of the catch-all term "residential tourism". Another element, and a very significant element, is the "oferta alegal" or "ilegal" where illegal can be used.

What was doubly curious was that, having identified this type of tourism as a "national" strength, a reform that does not directly come under the heading of tourism, that to do with the tenancy act, which is property legislation, went in the opposite direction. By handing responsibilities to regional government, not only was a national strength ignored but the potential for diverse and so confusing legislation was also heightened. To give one example, and a very different one to the Balearics, in Catalonia, where there is regulation, the offer of holiday rental places has soared. CEHAT says that, in Barcelona alone, it greatly outstrips the number of places in hotels or previously regulated types of accommodation, so bringing about conditions under which it is impossible for hoteliers to compete.  

But what CEHAT doesn't say is that Catalonia introduced a tourist tax last year. The government there saw a need to harmonise this tax for different types of accommodation and also saw a revenue opportunity; it has regulated holiday rentals in order to bring in more money. And what CEHAT doesn't admit is that growing tourist demand cannot be met by hotel supply and will not be met by a new boom in hotel construction (there are due, for example, to be some new hotels built in Mallorca but only a few). 

There has been, again according to CEHAT, a very significant rise in the "oferta alegal" over the past three years: a rise of 300%. We will have to take its word for it. There is little doubt that there has been a steep increase and there are good reasons why - demand, economic circumstances (of owners who need to supplement incomes), the emergence of P2P websites such as Airbnb. Alarmed by this, CEHAT sees the threat not just nationally but also internationally. At the meeting of the European Trade Association of Hotels, Restaurants and Cafés in Europe that takes place shortly in Athens, it hopes that "international best practice" can be established to guide regulation of accommodation that is outside the law.

CEHAT, as with the hotel federation in Mallorca, cries foul against the "oferta alegal", warning of the dangers it poses to the tourism industry and claiming unfair competition. It will keep on issuing these warnings and making these claims, while all the time not admitting that its aim is to eliminate competition; and competition, moreover, that is needed in order to satisfy demand.