Yet more evidence of a worrying economic situation in the Balearics with a report from business leaders which indicates that the local economy is showing signs of "fatigue" with growth below the national average in the all important second quarter. The number of new jobs being created has also fallen.
The report comes after indications which suggest that even though a record number of tourists are coming to the islands they are spending much less. Bar and restaurant owners have reported that their takings are down by 20 percent.
The Confederation of Balearic Business Associations (which represents all big employers) said that the local economy expanded by 2.8 percent from April to June compared to the national average of 2.9 percent. The local economy had started the year well with growth in the first quarter of three percent.
There are fears that the downward trend will continue in the third quarter despite hoteliers saying that hotels will remain open longer than usual. The mixed economic picture also comes at a time when some local residents are protesting at too many tourists coming to the islands.
A "record season" would generally lead to massive economic growth but on this occasion the spending power of tourists is starting to cause concern even though they came in massive numbers.
11 comments
To be able to write a comment, you have to be registered and logged in
CompoNot true, they are both at around 13%. Due to a lack of knowledge about Spain (a lot of Brits only know British tourist resorts). Does anyone ever say that Britain is a tourist island and wouldn't survive without tourism!
Zoltan TeglasIn total euros yes but in % of GDP Spain is roughly double.
Dd' and similarly for Spain in general' Nonsense - Spain's GDP from tourism is roughly the same as the UK's.
Mallorca needs to expand infrastructure and build more social housing. Tourism though must be seen as an absolute positive with no cap. Prohens and many politicians understand this, because it is the only true economic driver for the island--and similarly for Spain in general. This is the fact everyone has to accept, unless folks want to embrace skyrocketing unemployment.
Ah Morgan Welshman, hit a raw nerve I see, rich foreigner letting property out to other foreigners and saying he is adding value to the local peasants. Used to be called colonialism. Ah yes Morgan, that old chestnut, my guests spend money and boost the economy. It's the same argument used by politicians for letting in migrants. It boosts the economy and GDP. However GDP doesn't measure hospital waiting lists, 50 kids to a class at school, no doctors appointments, grid lock on the roads, increased crime, unaffordable housing etc. etc. what people want is a better quality of life not a meaningless GDP number. In Mallorca a reduction in tourists would see an exodus of seasonal workers to the mainland or South America. Beaches and roads would be freed up and rents would go down. GP's would be freed up, Son Espaces not full of drunk balcony jumpers and the police to focus on proper crime. GDP would go down of course, but the most important thing that Williams is missing us that the quality of life for the average Mallorquin would go up. Not for him obviously, he would have to sell up as his Golden Goose (at the expense of locals) would come to a crashing end. I suggest you sell your sugar cane estate and hand back control to the natives.
TDOK, let's look at that. First, it's true.. multiple dwellings, LEGALLY and with FULL LICENCE renting out to tourists. Yes. I do that. Next, these dwellings are rural villas, NOT apartments in Palma. They are (relatively) newly built to modern standards, on hectares of land. Private pools, spa, air con, heating, smart home technology, all the creature comforts. But there's another bonus too: Our properties are entirely powered by the sun. Yes, its' all solar powered (not even connected to the grid). The energy ratings are A++ (very rare). Near zero carbon footprint. And we have our own pozos, so we have an unlimited supply of water too. Of course there's descalcificadores and water treatment too. But no water bills, and no cutting off the supply. A hotel cannot offer this type of accommodation, but it's increasingly popular (the hotel association has been trying to shut STRs down for years now, but to no avail - it's bringing too much money into areas that previously never saw any tourist money). It's been quietly growing for years now. More than you may know, because it's not the kind of thing Brits seek. We get maybe one Brit booking per year (if at all). But that's OK, we're booked by the other 80% of tourism. And they're not as price sensitive, nor as complicated. All good. The protestors are not the ones who would ever rent such places. They're needing an apartment, probably somewhere around Palma (to be close to their jobs, if they have one) in the 500 per month range. Unfortunately, not going to happen. But that's not my fault. And while it would be great for them to get a luxury villa for 500 per month, that's not going to happen. That's just the reality of it. I think even you can appreciate that. It also wouldn't be Mallorquins renting them. They already own houses and have a place to live. Many have several. Usually inherited properties, some (if not most) of them uninhabitable and very expensive to connect electricity and water and upgrade their interiors to habitable standards. They use them to store their farming or other business equipment or supplies mostly, and if not, they put them on AirBnb and have their brother or a mate manage it for them. Long term rentals are very dangerous here, as we all know. So, let's talk about the money. First, every penny we make goes back into the local economy. There's the laundry service, the cleaning services, there's repairs and upgrades (which we must continuously invest in because our guests expect it to be stylish and have the latest comforts, and work properly - it never ends). And other things. Then of course, there's taxes. Naturally, there's the 19% income tax and the fees paid to the Gestoria, but there's others too: tourist tax, ground tax... ...and then there's rubbish tax: Because we have tourist licences, the local rubbish tax is TRIPLE what it would normally be. That's just the law. Ironically, we never use the local pont verd that we pay for, because their hours are very limited and they will only accept a limited amount of rubbish. So, we hire a LOCAL rubbish removal firm, which costs every bit as much as the rubbish tax. So, we pay 6x what a normal family would pay - all into the local economy. Do you think hotel chains put all the money back into the local economy? Not out here they don't. ALL of our money goes into the local economy, and about 80% goes directly into the VERY local economy within a few km. And that doesn't include what the guests spend in the local restaurants, shops, bars, supermarkets (which is significant in itself). our winter guests are largely golfers. Their daily per person greens fees are higher than what they pay for the villa per person per night ... None of our guests are party animals or drunken louts which is another complaint of the protestors. They're not coming here for that. They're coming to relax and get away from their busy lives up north. To work remotely in a nicer climate, or to just enjoy some family time. They don't cause trouble, they spend a lot locally. And they're happy to pay for it. And we're not the only ones - there's maybe 50 different villas of varying quality in the area. Local businesses like it a lot. And nobody locally is complaining about it. NOBODY. We're well liked here. There's no anti-tourist sentiment, no graffiti, nothing. It's as if the anti-tourism movement never existed. So, I'm getting old now, and managing these vacation rentals is getting to be a bit too much work. So I've been thinking about selling up. So, I've had a few of the top estate agents come and give me their assessments. They all have slightly different numbers (rather surprisingly high, IMO), but the one thing they all agree on is that the most likely buyer will be German, followed by Scandinavians or maybe French, and then there's this other nationality that's buying up a lot of properties here: Americans. It seems the yanks are keen to own a place in Mallorca now. And rural properties are top on their list. And it's cheap for them. So that's where they'd focus their marketing (Brits never mentioned - ever). Hmm... So, I'll make you a deal: You buy them from me, then as a good Samaritan helping the local population as you seem to expect me to do, rent them out to a protestor for 500 per month. or better yet, sell to a protestor for 1/10th the price you paid. Somehow, I'd wager that you'd never, ever do that. Ludicrous, right? Yet you'd blame me for not doing that? That's bloody convenient. But the offer stands - as long as you give it away to the protestors. OK? Anyway, how's the sale of your Son Vida place going? Any takers yet? It won't be a Mallorquin buyer, or a protestor - you can bank on that. But I'm sure that'll be perfectly OK with you. Bloody hypocrite.
Cue Daily express headlines tomorrow, unless the sausages have been released.
Ps If you are looking to blame people for the housing crisis in Mallorca that sparked the demonstrations, then look no further than Morgan Williams who has multiple dwellings and lets out accomodation at inflated prices to foreign holiday makers. Thereby denying locals the ability to buy/rent. He comes on here slagging off Brits, but he is part of the problem in Mallorca, not the solution. The locals know that, shame he doesn't.
BeachcomberHmmm.. sounds like more wishful thinking - like a few years back when the MDB and you lot were constantly predicting (hoping, and even claiming) economic misery here, yet it just kept going from strength to strength... so that rhetoric eventually disappeared... ... until now, finally... Balearic economic growth falls by nearly 0.1% from 2.9 to 2.8%. We're going into poverty! ...at a growth rate nearly triple that of the UK (1.1% 2024, 1.0% est. 2025). Funny how that works, innit,? (but explains why Brits aren't spending much). And add to that... the commie EES/ETIAS... Good job it doesn't apply to the other 80% of tourism here. Yet... it does apply to one of the fastest growing tourist segments (the yanks), but they already have an almost identical system as EES/ETIAS, and are used to it. Nowadays they just swipe their passport, put their hand on a sensor, look into the camera, and beep! They're in. Easy peasy. And the yanks seem to think everything is rather inexpensive here and it's even more attractive to them. So don't go to Florida or California or Texas or anywhere in the US. It's even more expensive than here, you'll have to pay 27$ to be fingerprinted and have your photo taken. And we all know how much Brits hate that. It's one of the reasons the UK is so popular with migrants. None of that ID nonsense. Once they're in, nobody can identify whether they're legal or not. No records. Still, it'll be a shame to lose a handful of Brits. But no worries, there's plenty of others to take their place. Besides, Brits don't spend much. And complain a lot. Anyway, enjoy Turkey. Or Egypt. Or Tunisia... Or wherever is the cheapest. We'll still be here next year. Maybe things will be better for you then.
Add to the doom and gloom the new EES if it eventually happens and is not postponed again or better still scrapped completely and you have the perfect storm. Despite being property owners in Majorca, like most people likely to be affected by long delays we are giving the EU a complete miss for at least 6 months and heading to Turkey for no hassle entry , lower prices and better value for money. Adios Majorca you only have yourselves and the EU to blame.