Palma town hall's moratorium on the issuing of new licences for hotels is already having an impact on values. Hotels in the city centre are being revalued upwards by a minimum of 12%.
This valuation has come from real-estate experts consulted by the Majorca Hoteliers Federation. Its president, Inma Benito, says that there is a similar situation in Barcelona, where a moratorium has pushed values up by as much as 21%. Palma, therefore, is being turned into a highly desirous tourist location, especially where investors are concerned. They are seeing values on their investment in urban and boutique hotels going up significantly.
The restrictions introduced by the town hall are not ones that the hoteliers federation or the Palma association of hoteliers take issue with. They are justified on the grounds of a rethinking of the model of growth in the city (especially the old centre) and of sustainability and coexistence.
Profit levels for urban and boutique hotels have gone up markedly. Over the past five years the RevPar has, in some instances, increased by five times. This means the revenue per available room. Prices per night can be as high as 600 euros, though between 120 and 200 euros is more typical.
The urban environment in the city centre has improved because of the investment in hotels. This has meant the rehabilitation and transformation of old buildings, some of which were in a state of abandonment.
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