Balearic holidays are literally being given away in the United Kingdom, with prices yesterday for one week, half board at a three star hotel in Minorca as low as £59. But sources for the Majorca hotel federation said yesterday that occupancy for May is just 50 per cent, and with 85 per cent of the hotels now open, it appears that, despite the rock bottom prices for Balearic holidays in the UK, they are still proving hard to sell. The family market, the Balearics' bread and butter, has also taken a further tumble. Family holiday bookings to the Balearics this summer have fallen by as much as 40 per cent across the market - German tour operators say that the problem is the Germans are not travelling - but the British are, in particular to mainland Spain. Yesterday nobody was blaming the tourist tax, the hotel sector is starting to get seriously concerned about how this summer is going to pan out. At the moment, at least 20 per cent of Balearics holidays on sale across Europe are on offer at discount prices - seven nights, self catering in Majorca at the moment costs as little as £85 per person and yesterday there were hundreds of Majorcan holidays in the £75 to £85 price range on offer on the internet including one 14 night self catering package for £85. On one website there were 1'000 late offers to the Balearics, all departing the UK over the next five days. For those heading for Ibiza, some people will get change from £70, which will help cover the cost of the tourist tax. Majorcan hoteliers are adamant that they have not dropped their prices, but tour operators got their fingers burnt last year slashing prices in order to fill Balearic hotels and are unlikely to be content with a one per cent profit margin again this year. The tour operators made it clear last month that unless the Balearic market started to pick up a price war was inevitable. The price war is raging, but if a £59 holiday in the Balearics fails to tempt the British holidaymakers, tour operators will start reducing their flights and cutting capacity which would finish off the summer season before it even began, with neither quality nor quantity.

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