Hoteliers in the Balearics seem set to offer discounts in order to avoid a situation which has arisen in the Canaries, where there has been some reduction in UK and German tour operator and airline programmes this summer. Discussions with tour operators are therefore understood to have taken place at the Berlin ITB fair last week, with offers being lined up in order to counteract the increased demand for bookings to Turkey, Egypt and Greece. Discounts would therefore represent a reverse in hotelier strategy which, for the past three years, has meant increased prices. These have come about in part because of the insecurity in other destinations and also because of investment that has improved hotel quality.
It does vary from hotel chain to hotel chain and from hotel to hotel, but in certain instances it is being said that only around 40% of places are under contract to tour operators, meaning that there is potentially a great deal of capacity for reservations from other sources. While this situation can be beneficial to hoteliers, there is also a risk. One lies with tour operators that have their own airlines: flights could be rescheduled to other destinations.
In Egypt and Turkey, hotel rooms are generally cheaper than in the Balearics (typically by around 20 to 25%). In addition, as Maria Frontera, the president of the Majorca Hoteliers Federation, has noted, the governments in those countries have been making subsidies available for the price of flights from the UK and Germany.
Nevertheless, the hoteliers are generally confident that tourist numbers will be much the same as last year. And it needs pointing out that the situation in the Balearics is different to that in the Canaries. What has happened in the Canaries is that airlines haven't stepped in and taken up flights that were previously operated by Monarch, Air Berlin and Niki to the same extent that has been the case with the Balearics.
Regardless of this difference between the two island regions, the hoteliers in Majorca and the Balearics are taking note of appeals from tour operators and, more importantly, the risk of business being diverted to other destinations. And greater risk is already being spoken about for 2019.
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