Rise in summer holiday sales as hotels finally reduce their prices

PALMA
THE “founding father” of mass British tourism in Majorca, Harry Goodman, told this newspaper last week in no uncertain terms that “unless the hotel and service sectors drop their prices and offer value for money, the British will not return.” The UK and Europe's main tour operators have spent all winter issuing a similar warning, ever since the World Travel Market last November in London in fact, and it appears that the Balearic tourist industry has finally “woken up” as Goodman advised.

According to sources at the ACH, the Balearic Association of Hotel Chains, the latest market figures point to a four percent increase in visitors this summer but hoteliers have dropped their prices to stimulate demand.

Last summer, the Balearics lost nearly 1'5 million tourists but the hotel sector is confident that it is going to win back about half this year.
However, in doing so, hoteliers have dropped their prices by as much as 30 percent in some cases.
The President of the leading international Majorcan hotel chain, Sol Melia, Gabriel Escarrer agrees that the increase in visitors, compared to last summer, will be around four percent.

But, he warned that while hotels might find themselves slightly busier this summer, their profits margins will have shrunk and therefore takings will be down.

It appears that last year, hoteliers agreed to drop their prices by around six percent when thrashing out the contracts for this summer but, after the very quiet start to this year, many have slashed their rates further by between 15 and 20 percent.

The hotel sectors hopes that the discounts will not only woo back tourists lost last year, many to cheaper non eurozone destinations, but also encourage clients in the main markets in the UK and Germany to book early.

At the ITB travel fair in Berlin earlier this month, tour operators were pushing for even more discounts and for the Balearic hoteliers to adopt a much more “flexible” approach to pricing.

The hotel sector returned complaining about being bullied by the tour operators but, as many travel industry chiefs have been telling the Bulletin over the past few months, it is the market, the clients, which dictate where people go on holiday, not the tour operators or the airlines.

The President of the Balearic Association of Hotel Chains, Aurelio Vazquez, said over the weekend that many hotels have introduced a new wave of ten percent discounts which actually translates into cumulative reductions of between 25 and 30 percent. “This summer is going to be better than last year,” he said. “But, with it going to be a late booking market again, the local industry is obviously very nervous about the summer season,” he added.