Your seven days news round-up in Mallorca

The Confederation of Balearic Business Associations (CAEB) is one of a number of entities that produces quarterly and annual economic reports. The Balearic and Spanish governments, the Bank of Spain, BBVA Research; these are among others that provide information about economic growth. The CAEB's statements are not the official figures, and it - as with other entities - will have its way of measuring growth. There are commonly accepted parameters, e.g. consumer spending, but methodologies do vary; hence the figures from different sources very rarely tally.

One occasion when they did was towards the end of last year. AIReF, the Independent Authority for Fiscal Responsibility, which typically never agrees with the Balearic Government, did agree - 2.6% GDP growth in 2024. The government has since revised its forecast - 3.2% for the whole year it announced in the summer. Earlier this week CAEB reported a 2.8% growth in the second quarter, down from three per cent in the first quarter (its figures). What did this indicate? That the government's most recent annual forecast was a tad optimistic?

Tourist spending

An assumption was of course made that this slight decrease was due to lower tourist spending, predicated on what the restaurants - and primarily the restaurants - had said about spending in June, a fall in turnover of 20%. But however much the economy is loaded towards tourism, it doesn't provide the whole picture. CAEB talk about the economy becoming exhausted or running out of fuel was really a concern - yet again - about productivity. Despite record numbers of tourists and record employment, the economy doesn't respond as well as it should do.

The Mallorca Hoteliers Federation, prior to the CAEB announcement, acknowledged that holidaymakers have had less to spend this year, a fact recognised by various business sectors; less to spend or perhaps less willingness to spend after the two bumper summers of 2022 and 2023. The federation didn't appear to concede that its members' prices might have been a factor in this lower spend. The president, Maria Frontera, confined herself to an explanation of hotels' costs having continued to rise and to pointing out that the cost of flights has risen.

Still, all concerned must surely have been encouraged by both the restaurants and the retailers having reported this week that September business has been an improvement on that of July and August. In part this has been because of the way in which the tourist profile alters in September. As everyone knows.

Record number of low-season airline seats

Tourist numbers have kept on increasing, and for the upcoming low season they are likely to increase further. The Spanish association that coordinates time slots has given information regarding airlines' winter schedules (November 1 to March 31). For Mallorca and the Balearics, the programmed number of seats is at an all-time high. Of a total of 9.96 million, Palma has 7.4 million, an increase of 3.6%. As ever in the low season, the two main markets are the Spanish and the German. The three international routes with the highest demand are all German - Berlin, Cologne and Frankfurt. No specific mention was made of the UK. While Ryanair has the most scheduled flights for Palma, the airline operates in various markets. The fact that easyJet is ninth on the list does perhaps tell its own story. The airlines from two to eight are either Spanish or German.

Social discontent because of overtourism

President Marga Prohens turned to the theme of tourist overcrowding at an event for business leaders in Palma on Tuesday. She told her audience at a dinner organised by the Economy Circle think tank that "firm and brave decisions" to tackle tourist overcrowding will be taken and applied in time for the 2025 season. She didn't specify the measures, just as she hadn't a couple of weeks ago in parliament, when she also referred to there being general social discontent. She stated this again on Tuesday. "We have to listen to the citizens, to listen to a growing and general social discontent that goes far beyond the protests. We can no longer grow in volume. We have to talk about limits and we have to talk about containment:"

What will the measures be? Anything more than a damp squib?

Investing in hotels

Prohens also spoke about attracting innovation and investment. In this regard, did she have investment for further enhancement to the quality of the islands' hotel stock in mind? Hans Lenz of the ABINI association of estate agencies at the high end of the property market said last weekend that the government should establish a plan for investment along the lines of what was provided for under the 2012 tourism law. That legislation resulted in 1.4 billion euros investment in upgrading hotel quality.

Lenz is of the view that a new plan would facilitate the quality conversion of outdated hotels and make them attractive to investors. "Thanking God" that regulations prevent much development and so protect natural and scenic heritage, he pointed to the high price that is being paid for luxury hotel investment because of a scarcity. The price paid by Andorran fund Emin Capital for the Hotel Formentor on the Bay of Pollensa worked out at 1.34 million euros per room, and this was before the cost of redevelopment.

No housing "miracle cures"

The tourism minister, Jaume Bauzá, responded to this by saying it is an issue under consideration by the social and political pact for sustainability and that the government is aware of the need to support quality conversion. However, right now the government has a different type of conversion on its priority list - that of commercial premises into residential accommodation.

One of a raft of measures either adopted or being processed to tackle the problem of the lack of affordable housing, the government nevertheless came under fire in parliament on Tuesday for having little to show for its initiatives. Patricia de las Heras of Vox said that after a year in government, the "miracle cures" had failed. Housing minister José Luis Mateo was perhaps justified in replying: "I wish housing policies would generate immediate effects, but the reality is that everything takes time."

Foreigners or non-residents?

Més coordinator and party parliamentary spokesperson, Lluis Apesteguia, has once more been dealing with questions about the apparent hypocrisy of Jaume Alzamora, his party colleague at the Council of Mallorca. In 2022, it was recently revealed, Alzamora sold his house in Arta for 596,000 euros to a German couple - it was in fact a sale brought about by his divorce. The hypocrisy charge was because eco-nationalists Més have called for limits on the purchase of homes by foreigners.

Apesteguia was at pains to point out that the party doesn't deal in racism or xenophobia. Més have always spoken about non-residents. Being foreign is irrelevant. The German couple were in fact residents of Mallorca.

In this regard, a report by the Economic and Social Council in the Balearics revealed that only a third of purchases by foreigners in 2023 were by people who were residents. The Balearics, the report concluded, has the highest rate in Spain of transactions carried out by non-residents - 25%. It was a finding to further fuel the debate about the limits that Més and others have been calling for.

Extreme temperatures; extreme security measures?

Returning to overtourism, are there a couple of factors that might result in a lowering of numbers? Nothing to do with whatever measures the government has in mind, one is short term, the other long term. The effects of climate change, notably more extreme summer temperatures, have previously been identified for their potential in cutting summer tourist numbers in the Balearics. The latest research, this time from the BBVA bank, suggests there could a 60% loss of summer tourism by the end of the century and an annual 27% net decrease.

More immediately, there is all the hoo-ha about the interior ministry's requirements for personal data collection by hotels (and holiday rentals), travel agencies and hire-car firms. The introduction of these requirements has been further postponed until December 2, the ministry saying this is to give more time for the technology to be in place. The CEHAT Spanish Confederation of Hotels insists that it is not a matter of technological adaptation but one of content.

This content will create a greater administrative burden, while there are plenty of critics who argue that what will be demanded is unnecessary and will quite probably contravene data protection laws. There is a fear that tourists will be put off by, for example, collection of credit card and phone numbers. The ministry says that the requirements are for national security. Opponents say that they demonstrate that the ministry hasn't the first idea about the tourism industry and hope that the delay until December 2 signals a change of mind by the Spanish government that will result in the decree that contained these requirements being binned.