Prices being asked to buy hotels have shot up in the Balearics.

Prices being asked to buy hotels have shot up in the Balearics. | R.I.

Majorca Daily Bulletin reporterPalma08/07/2016 00:00
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British, German and Scandinavian tour operators are putting on hold the purchase of hotels in Majorca because of their rising prices: in some instances these have gone up by around 40%. The tour operators are asking hoteliers to rethink, as the prices now being demanded are exorbitant. The reason for buying hotels is clear. It is in order to ensure supply at a time when there is such heavy tourist demand for Majorca. The hotels have been looking to cash in on that demand.

To give an idea of price, three and four-star hotels which were previously available for between six and seven million euros are now on the market for anything up to ten or twelve million. This is the case in the main tourist resorts - Alcudia, Cala d'Or, Cala Millor, Can Picafort, Paguera, Palmanova-Magalluf, Playa de Muro and Playa de Palma. There is a similar situation in Ibiza and Formentera; less so in Minorca.

The premium prices being demanded are having a particular impact on UK tour operators. They have suddenly found that the pound has fallen in value by some 11%.

Tour operators have been seeking exclusive deals with hotel chains of varying size in order to guarantee the highest number of places possible right through until the 2019 season. In the process, the brand value of chains has risen, while the profile of tourists has been shifting towards one with higher purchasing power.

This situation is being reflected in other types of accommodation - interior hotels, agrotourism, rural hotels as well as holiday homes.

The tour operators, such as Tui and Thomas Cook, expect the prices to return to more "normal" levels in the medium term, assuming, that is, that destinations such as Egypt, Tunisia and Turkey become safe once more. Meanwhile, these companies are predicting at least three years of "bonanza" for Majorca and the Balearics, with hotels able to anticipate greatly increased profits.