Turkish bank

People getting money.

27-08-2018OSMAN ORSAL - REUTERS - X02255

With the time fast approaching for contractual arrangements to be firmed up for the 2019 season, there is further concern in Majorca and Spain about the competitive threat posed by Turkey. This time, as remarked upon in the Bulletin on Friday, it is because of the weakness of the Turkish lira and its loss of value - up to 47% against the euro.

With prices already lower in Turkish resorts, tour operators stand to benefit further because of the currency situation. The financial equation is such that Turkish hoteliers could push up their prices to tour operators (and therefore gain more income) and still be able to provide holiday packages well under Spanish rates.

Joan Molas, president of the Spanish Confederation of Hoteliers Associations, recognises the threat this poses to Spanish resorts, as does the president of the national travel agencies confederation, Rafael Gallego. In Majorca, the smaller hoteliers concede that they cannot compete on price, only on quality and service. But having invested heavily in recent years on modernisation, at least partly in response to tour operator requirements, they now see another market factor in play that could affect the returns they make on that investment.