Palma takes off as city destination for Europeans

Palma hoteliers’ president, Javier Vich, points to what he calls a “vacationalisation” of Palma over the past ten years. This has come about courtesy of investment, more specialised hotels at the high end of the market as well as because of changes through public-private initiatives and co-operation that “have been working well”. Vich also identifies the high percentage of four and five-star hotels in the city. Indeed, Palma has the highest relative percentage of these among all Spain’s city destinations.

“Eighty-five per cent of existing housing stock - a total of 48 hotels - is of the highest category. The market has shown its appreciation of this and of the dynamism of central Palma in terms of its restaurants and culture.”

There are 7,919 hotel beds in establishments that are part of the city’s hoteliers’ association (Ashpama), and seven new hotels are due to be opened in the next three years, albeit that some of these projects are in the system for building licence processing at the town hall. Foreign investment, chiefly German and Scandinavian, is what is behind much of this work, though there is also local investment.

The city centre is what draws most of this investment interest, which ranges from five  million to fifteen million euros. The old town has, therefore, become fashionable with European visitors, thanks to improvements that have been made and changes to shop opening hours which have meant that the city is no longer deserted and without services at weekends.   

There has been a shift in the nature of Palma’s tourist market. As Vich explains: “The Spanish market was number one until 2008. But with economic crisis came a change. Whereas previously it represented 80% occupancy, this is now around a half. This has been reflected in occupancy statistics in the past five years, which show an annual average rise and also more being open.”

The average annual occupancy has risen in the last ten years from 58% to 66% this year, but there are some establishments which maintain occupancy rates of between 80 and 85% all year.

Vich concludes: “Palma’s city hotels are a product for tackling seasonality and for creating jobs. Investment that has raised their star category has led to an increase in hiring in the order of ten to fifteen more employees. And the new hotels will also have a positive impact in this regard. The prospects for the short and medium are very good.”