The main reason is the swing in demand for holidays in cheaper emerging destinations such as Greece, Turkey, Egypt, Bulgaria and North Africa and, it appears, that all of the Balearics’ traditional markets have opted to go elsewhere this summer.
As the Bulletin reported this week, the British market has been holding its own, against all expectations, but the German market has contracted along with the French.
And, despite claims that the domestic Spanish market will fill the void, it does appear to be the case with peak season occupancy currently 30 percent down on last year.
Granted, 2018 was another record year but the 30 percent shortfall has caught hoteliers by surprise and at this late stage in the season they do not know how to react. And the slump has hit the hotel sector from top to bottom, even the five star and boutique hotels in Palma are suffering from the downturn.
According to the Majorcan tourist industry, it has not experienced a situation like this for decades.
Apart from the competition from cheaper destinations, tour operators have reported a drop in sales of package holidays with a marked increase in holiday makers using on line digital based booking agencies.
And what is making the situation even more complicated for hoteliers is that Greece and Turkey, for example, still have vacancies and are offering special late discounts, under cutting the Balearics even more.
Some hoteliers have con considered a late special offer campaign but due to the main European tour operators having taken a gamble on Eastern European destinations this year, there are not sufficient flights to cater for a last minute surge in bookings to the Balearics.
Ironically, airport passengers figures are similar to last year, so the question hoteliers are busying trying to find the answer to is: Where are visitors staying?
Majorca is the island which is suffering the most with hotel associations in the main resorts such as Alcudia, the Playa de Palma, Calvia, Calas de Mallorca, Colonia de Sant Jordi, Can Picafort and Peguera all repporting a downturn.
And, as a result of the slump, tour operators are trying to renegotiate contracts agreed last year for this summer, amidst a fear of a drop in revenue, while putting pressure on hoteliers to substantially reduce their prices for 2020.
Ibiza is faring better than the rest of the Balearics but even there, hotel rates have been reduced by as much as 30 percent.
