Will holiday prices come down? (And the brotherhood of tourists)

TUI talk regularly. I can recall a spring not so long ago when TUI talked about bookings for Crete outstripping Mallorca. The reason was also obvious, and the same. But now, of course, there is the additional factor of Turkey being a land of peace and tranquility - touristically if not in every sense - whereas Mallorca is a rogue territory expressing discontent with a malfunctioning tourism model.

"Herzlich Willkommen," a multitude of Turks at Antalya Airport doubtlessly cheer, while there is zero evidence of "Tourist, geh nach Hause!" graffiti to greet the arriving German thousands. Funnily enough, I can't recall there having been any German graffiti in Mallorca. Which is odd when one considers that German tourism vastly outweighs British tourism in Mallorca.

If one wished to view the figures this way, July tourist figures suggested that German tourists had been singularly unmoved by the protests, whereas the British had been; Germany was up 12%, the UK was down 10%. Or were these an indication of varying price sensitivities? In which case the French, up 22%, were not sensitive, while the Italians (-11%) were. One can always arrive at whatever conclusions one wants, but an apparent German preference for autumn on the Turkish Riviera hints at a German price sensitivity; no more than hints, one would suggest.

The tourism industry does characterise the UK market as being particularly price sensitive. But is it any more so than other European markets, especially when it comes to a family tourism? I somewhat doubt it, and a narrative currently doing the rounds in the tourism industry points to the industry itself doubting it right at the moment.

As potential evidence of this, the CEO of Riu Hotels & Resorts, Luis Riu, said in an interview with Palma-based Preferente magazine earlier this week that "hoteliers have gone a little too far with prices". Observing that holidaymakers are being dissuaded, Riu added: "Either we lower prices quickly or people won't come next year." He also referred to higher prices of flights, intimating that airlines need to adjust their prices downwards as well. Ryanair has already announced a price reduction from this winter.

Related news

Hotels in the Balearics are the most expensive in Spain

More related news

A general view is that post-pandemic price increases, at least partly in response to pandemic losses, are unsustainable. Prices should preferably come down, but certainly not go up. Will this prove to be the case? We will find out.

It has long been a philosophy of the industry in Mallorca and the Balearics that it doesn't compete on price. Politicians have echoed this. For example, the tourism minister who introduced the original ecotax in 2002, Celestí Alomar, was insistent that the islands do not engage in price wars with competitors, and he had Turkey in mind in particular. Maybe there aren't price wars as such, but there is surely some competitive pricing.

There is a degree to which overall competitiveness is affected by price, but then the current climate is such that losing tourists rather than constantly adding more might in fact be beneficial and wouldn't make a blind bit of difference. When the islands can have increased total tourist numbers to the extent that they have over the past two seasons, and from a base of what was already technical full employment, it's hard to argue that a loss of tourists would be detrimental.

This is, for now, hypothetical. Meanwhile, one can't evaluate with certainty the relationship between tourist numbers and holiday bookings on the one hand and prices and protests on the other. Even so, while Luis Riu doesn't believe that protests have had much impact, they are "a risk" if they continue. Holidaymakers do, after all, have a choice, and Riu mentions Greece and Turkey in this regard.

One politician who is clearly aware of the potential impact of protests is the mayor of Calvia, Juan Antonio Amengual. In the manner of his predecessors, he took the occasion of the opening of the Santa Ponsa Rei en Jaume Fiestas to indulge in a sort of party political broadcast. The pact for sustainability, the brainwave of his boss, President Prohens, allows for "healthy dialogue", he remarked.

Some seem to have forgotten what tourism has contributed to the Balearics. "They blame the foreigner, looking for an external enemy", the mayor firm in his opinion that "citizens and tourists are friends; we are brothers". "Tourism is part of our society. Tourism makes us better people; it is democracy."

All good soundbite stuff, but can this brotherhood be shaken by a price tag placed on it? One that is unsustainable.