Falling Out At The Hoteliers Federation

All is not well, it would seem, in Mallorca's hotel world. For once, this isn't because of occupancy, seasonality or the usual hotel-related subjects. It is to do with the Mallorcan hoteliers federation and what it is up to.

It isn't clear exactly what the problem is, but three former presidents of the federation have come out and said, more or less, that they consider that the federation is only concerned with the interests of the big hotel chains. They have intimated this but haven't enunciated the reasons why they think this.

But, if one takes a look at the federation's history, one might start to get an idea. It was created in 1976 and has had, over the 38 years of its existence, seven presidents. It is the background of these presidents that lends support to the complaints about the big chains.

The first president was Miguel Codolà. His hotel group - he died in 2012 - was Valentin, never more than a middle-ranking hotel chain in Mallorca. Following him came José Forteza Rey, Ferràn Porto, Pedro Cañellas, Antonio Horrach and Marilen Pol. What these all had in common was that they were involved, through ownership, with relatively small hotel concerns. Horrach's family hotel chain, for example, is HM. It has five hotels in Mallorca and one in Mexico. It isn't very big, therefore.

When Marilen Pol died in January last year, there was the possibility that Inmaculada de Benito, then the director of the federation, would succeed her. This, though, was ruled out on the grounds that she wasn't involved in hotel ownership. She wasn't, as was said at the time, a "hotelier". It had been the case, since the federation started, that a president had to be a hotelier in the sense of being an owner.

The federation, in seeking to find a successor to Pol, wanted someone for whom there would be a consensus of support. It had to adapt its statutes. Inma de Benito stayed in her post (before recently being promoted to vice-president), but Aurelio Vázquez, who is not an owner, was made president and he is CEO for Spain and the Mediterranean with Iberostar, having previously been with Riu. He has experience, therefore, of two of the "big four".

Vázquez and de Benito were recently in Madrid, where they set out fifty measures that they want the national government to adopt and which would create a special "regime" for the hotel industry. Among these measures are those to do with tax advantages, limitations on strike action and incentives for modernisation. Concerns expressed by the three former presidents - Forteza Rey, Porto and Cañellas - appear to have come in the wake of the Madrid announcement. Yet, and one would have thought, they would be measures which would be beneficial for all hoteliers.

The three ex-presidents have all said that they think Vázquez and de Benito are doing a good job. There again, for diplomacy's sake, they probably would say this. But they obviously have some disagreement, Forteza Rey having said that proposals should not be allowed to generate any controversy, without stating what this controversy might be.

The Madrid announcement has taken the tourism industry by surprise. Vázquez was asked why the Mallorcan federation had opted to go it alone in calling for the measures, when they are essentially the same as those called for by the Spanish federation. He replied that the means are not important but the end (i.e. it doesn't matter who makes the proposals), adding that previous proposals had not been of the "calibre" of those made by the Mallorcan federation.

One detects in all this a feeling that the Mallorcan federation is getting above its station and so therefore may indeed be pressing the case of its big hotel chains. Mallorca does have, relative to other parts of Spain, a concentration of the country's largest hotel companies, but this still doesn't explain why former presidents of the federation might take issue.

Is it, therefore, all linked to the traditions of the federation, one that had been presided over by those from smaller family concerns? Vázquez is a hotel career professional, while de Benito is the closest one could get to what could be dubbed a tourism industry politician, having spent most of her career knocking around hotel associations. And the politics of the hotel industry, specifically the attitude of the federation towards wage negotiations, may be what is worrying the old guard. Of a previous round of negotiations, Antonio Horrach, by then no longer president, took issue with de Benito, saying that wage increases should be accepted. Does this give a clue as to why the ex-presidents have expressed their concerns? Whatever the reason, the hoped-for consensus in the appointment of Vázquez seems to have been shortlived.

The Certainty Of Mallorca

This is the week of the Berlin ITB travel fair, the biggest of the winter's fairs and the last one before the season commences. It was the scene of acute embarrassment for the Balearics last year when a stripped-down presence reduced to the stand to hiding itself away inside the grander pavilion for Turespaña, the budget having been slashed by over half a million euros. One critic, from the socialist opposition, denounced the "ridiculous size" of the "chiringuito", saying that it undermined any impression of international prestige at a time when the islands' tourism was not certain.

This year, the Balearics tourism agency is once more sharing with Turespaña. Indeed, it also has the Palma 365 Foundation, Manacor town hall and the Cala Millor hoteliers to keep it company. No doubt there will be more criticisms. But are they really valid?

Fairs such as Berlin's are an exercise in showing-off. The bigger, the better the stand, the greater the kudos. It doesn't automatically follow that bigger and better mean more business. Perhaps Mexico, the fair's official "partner" this year will secure a substantial rise in tourism. Or perhaps it won't. Putting on a show only amounts to so much.

The travel fair plays to different audiences. The public, only admitted for two days, is one, but it is less important than the tour operators and other decision-makers, and the fact is that these decision-makers do not make decisions based on the nature of an exhibition stand. The fairs are talking-shops and networking opportunities for the travel and tourism industry, but much talking and networking occur without the need to attend fairs. Size of a stand doesn't really matter, and one only has to consider some of the news coming out of Berlin to know that it doesn't. Far from the islands' tourism being uncertain, as was alleged last year, it couldn't be much more certain. Tour operators are on the prowl, buying up hotels in Mallorca in order to guarantee beds for the next few years. Mallorca's tourism is certain, because Mallorca's tourism is safe. This has been a key message over the past few years. While other destinations have experienced problems, such as unrest, Mallorca has kept going on its own sweet way, causing very little or no trouble.

Avoiding trouble is the key to tourism success. Tour operators need to minimise risk, just as tourists need to know there is minimum risk where their holidays are concerned, but one piece of trouble might yet loom, and that is the threat of strikes in the hotel sector. They are never far away from being a possibility, given the somewhat volatile nature of certain unions, but the current round of wage negotiations for the coming season are stalled; the unions are looking for at least a 3% rise, but the hoteliers aren't budging an inch.

The unions, though, can point to price rises by hoteliers and ask, perhaps legitimately, where are our rises. Some concern has been expressed by tour operators who believe that the quality of some of Mallorca's hotels does not match the prices being demanded by the hoteliers. These tour operators are not about to accept any additional prices because of higher wages, and it is this price-quality equation which goes to the heart of much discussion of Mallorca's tourism. A reason, only one, why hotels don't open in winter and why Mallorca is a less than attractive proposition is because prices and so therefore costs are that much lower in other parts of the world. The tour operators can extract far higher margins as a consequence.

And if the tour operators are buying up hotels - as also are foreign investors, such as those from China - they are likely to insist on a harder playing of the hardball with unions. There may be an at-times frosty relationship between unions and Mallorca's hoteliers, but add multinational, foreign ownership into the mix and the relationship could be destined to become tundra-like.

The prognosis from Berlin is very positive, but down the line might there be trouble? The current round of wage negotiations will say much, and they are being conducted against a background of the hoteliers asking the regional government for specific legislation to limit the possibility of strike action in the tourism sector, a demand that is naturally opposed by the unions. If there were to be strikes this summer then the certainty of Mallorca suddenly becomes less certain.