Reflecting On The Season

The season is drawing to a close. It is time to reflect. The great and good of the tourism industry (plus politicians - up to you if you describe them as great or good) gathered for some reflection earlier this week. Some of them will reconvene next week and reflect further. That conference will consider the benefits and risks from the increase in demand, an aspect of which is the "sensation" of saturation, the "feeling" of being overcrowded. It was the same earlier this week. The reflections concerned three words starting with an "s" - sustainability, security and saturation. They sum the summer up. These words are constantly uttered by Mallorca's politicians. When it has come to security, it has been more a case of others' lack of security. Elevated demand for Mallorca because of insecurity equals saturation equals questions of sustainability.

Among the more significant contributions were those related to numbers of tourists and to road users. On the latter, it was said that heavy traffic and jams in Palma - frequently held up as evidence of saturation - have less to do with tourists in hire cars than with the sheer number of island residents who enter the city. This conclusion has been given support by Council of Mallorca statistics for traffic growth: the numbers of vehicles on key stretches of road are back to what they were pre-crisis. Saturation on the roads is as much a consequence of economic well-being on the island, if not more so than tourists and the economic well-being they bring.

The other contribution of note had to do with tourist arrivals. José Antonio Alvarez, who is the director of Son Sant Joan airport, observed that while passenger traffic has risen by ten per cent, the distribution of this increase was weighted in favour of the non-peak summer months. Growth was less in August - only five per cent - while May almost saw the three million mark broken and October won't be that far short. Three million has typically been confined only to July and August, yet June and September surpassed it.

In a way, this showed that the government's wish for more of a spread of tourists has been satisfied this summer, though of course what the government really wishes is that this spread is more even across the whole of the year. It may be a long time in the wishing.

The killer contribution, however, was to do with welfare, the benefit derived by society as a whole from tourism activity, with population and the environment factored in. This welfare has reduced markedly this century. In other words there is greater inequality, with riches being derived at the expense of general societal welfare and also the well-being of the environment because of the strain placed on it by increased numbers.

This is a theme that tourism minister Biel Barceló has explored in the past by referring to the degree to which per capita income in the Balearics has dropped from being at the top of the Spanish list in the 1990s to seventh. There are different manifestations of this decline, and the Exceltur alliance for touristic excellence drew attention to one this week. The increased numbers of tourists who have been "borrowed" this summer do not translate in direct proportion (or anything like it) to increased financial returns. It's common sense and it's something that's been known for years.

While this summer's boom has given a further boost to economic growth (and clearly there is evidence of it, such as with the number of cars), there is great unevenness in terms of the beneficiaries of this growth. The high level of short-term contracts, often poorly paid, is proof of this. In a wider societal sense, the constantly depressing information about Balearic educational performance confirms this welfare imbalance. There are too many young people being seduced into abandoning education for short-term, insecure and not well-paid employment in the summer. One might ask why they do it, but then the young see no further than a summer's enjoyment. They put their futures in doubt and so they and society lose in the longer-term.

As the politicians have been gearing themselves up for negotiations over next year's budget, a theme has been the necessity for a change to the economic model. Podemos talk about this in strident terms, a consequence of their dislike of anything that is vaguely big business. Biel Barceló isn't so strident. Indeed, Barceló is a generally sane bloke, who sees the necessity for re-forming the current model (and its consequent loss of welfare) into one that enhances welfare. Here is where you achieve genuine sustainability in terms of employment and the benefits to be derived from tourism. It is perhaps the most important issue bar none of the debates about tourism. Saturation, quite frankly, is an interim irrelevance.

The Critics Of Fitur: Tourist tax

If one looks back to the Madrid Fitur travel and tourism fairs of 2014 and 2015, the main talk then was of optimistic recovery, of new projects and of a generally more positive outlook for the tourism industry, following the years of crisis.

Fairs such as Fitur typically don't make waves. For the Balearics the greatest controversies - if you can call them such - have tended in recent years to be reserved for the parsimonious nature of exhibition stands. Former tourism minister Carlos Delgado made drastic cuts to the spending on fairs - the visual appearance and size of stands in particular - and was criticised for having done so by the likes of Ibiza. The controversies are now of a rather different order: there was no tourist tax looming on the summer season horizon two years ago.

If Biel Barceló, the tourism minister, truly believed that he left the World Travel Market in London last November having heard little criticism of the tourist tax, he couldn't help but hear such criticism in Madrid. He can rebuff this by insisting that opposition is, to use his word, artificial, but audiences in Madrid heard this opposition uttered with plain speaking by Meliá, the Barceló hotel group and the confederation that represents the non-hotel tourist businesses. The criticisms of this latter group are particularly pertinent. The tourist tax means that there might be less spending by tourists, and it will be restaurants, clubs, attractions and others which bear the brunt.

President Armengol chose to home in on the criticisms of Mariano Rajoy. It was irresponsible of him to cause potential harm to Balearic tourism. The fact was that Rajoy didn't specifically mention the tourist tax, while his references to obstacles being erected in front of tourism were equally applicable to administrations such as the ones in Madrid and Barcelona. Armengol may have been right to have pointed to the increase in IVA (VAT) under Rajoy, but as has been said many times, IVA does not generate the same level of interest among tourists. Typically, they will in fact be unaware of it.

There is a further and more important political context to this year's Fitur. It was why King Felipe didn't attend, which he normally would do. He is heavily involved in attempting to sort out some agreement for government, and the very fact of his non-attendance showed just how different Fitur is this year to two years ago. Then, there was some instability with the monarchy, but there wasn't instability on the political front. At the backs of the minds of many of those in Madrid would have been concerns about what might come to pass.

For now, however, everything remains rosy. ABTA has issued its forecasts for the current year, and Spain is going to be booming. Magalluf has been singled out for particular mention in this regard on account of its market repositioning. The boss of Globalia, Juan José Hidalgo, says there will be no free rooms this summer, and he was talking about Mallorca in particular. Things will be getting into full swing earlier as well: in April, Hidalgo believes. Meliá concede that the season could be better than last year. The Piñero group anticipate 5% growth. Not even the Turkish government's significant discounts for airlines this spring are likely to dent Mallorca's prospects.

It is of course what lies beyond this current year which is causing the anxiety. Ongoing instability elsewhere would probably allay much of this, but it remains to be seen how the tourist-consumer reacts not only to the tax but also to increased prices for Mallorca. If things were to stabilise elsewhere - a big if - then governmental intervention in other countries will guarantee dirt cheap prices to go alongside the grand palaces of new hotels.