Is this the right time to increase the rate of the tourist tax? At a time when many holidaymakers are finding the island increasingly more expensive the Balearic government decides to raise taxes. Tourists in five star hotels are already paying four euros (per person, per day) so the increase could mean that they decide to take their business elsewhere (and this is the type of tourists the island desperately wants to attract).
The announcement by Balearic President Marga Prohens took many by surprise. The increase had been pondered by the government but later ruled out, or so it appeared. But on Wednesday Prohens said that the increase was part of the measures which would be introduced to curb mass tourism.
The tourist industry has reacted angrily to the move with hoteliers saying that the government should be doing more to stamp out illegal holiday lets rather than penalising holidaymakers who stay in legal accommodation.
The Balearic government is behaving as if all is well within the tourist industry. British tourism, the principal market after Germany, fell in the Balearics in July and August (10 percent in July and almost five percent in August). Spanish mainland tourism is also down and bar and restaurants are reporting a 20 percent fall in takings.
The only bright point is that German tourism continues to power ahead and this increase will counterbalance the drop in British and mainland holidaymakers. A record season as regards visitor numbers? Yes, but it probably could be described as average overall.
So the big question; is this the right time to raise the tourist tax? Well no. However, domestically the Balearic government has to be seen to be doing something to counter mass tourism following the protests of last summer. There is a growing backlash against tourism. The protests will have an impact on bookings. They had little or no effect this year because the majority of people had already booked but next summer could be a different story. I appreciate that there is an anti-tourism element on the island but increasing the rate of the tourist tax is not the way forward especially when many households are feeling the pinch.
The main problem is that a sizeable proportion of the population have fallen out of love with tourism. There is no longer the perception, amongst some, that the island needs as many tourists as possible for its economic well-being. The government should be doing more to underline the importance of tourism to the island and the economy. You can imagine the headlines in the UK press: “the island that doesn’t want us anymore has decided to raise taxes ... .”