Construction activity in the Balearics is closely linked to tourism. Much of it ceases in the summer and is reactivated over the winter months, and the prospects for the coming winter are good. This is due in particular to the continuation of hotel redevelopment that was set out in legislation: work was to be allowed on the understanding that it would mean an upgrading of hotel star-rating category.
A five-year period was set aside for this hotel modernisation. It ran out in July, which means that licences applied for and granted before July will relate to redevelopment work this winter and not beyond unless there are exceptional circumstances. The construction industry is in fact anticipating more business than last winter, while as noted elsewhere in yesterday's Bulletin there is going to be additional pressure on builders to get work done in time for the start of March; it is said that an increased number of hotels are planning on opening on 1 March next year.
The problem for the industry, though, is what follows. It also has to contend with the fact that the government won't be allowing town halls to give residential development permissions if there are no existing sewage networks. For now, the prospects for home building are also reasonable, especially for the construction of houses rather than apartments. There has been a 20% increase in building licences this year. But again, there is the issue of what will follow.
The association of builders notes that in Palma alone there are more than 400 plots which are available for development but which don't have existing sewage systems. It is expected that there may be some regulatory changes, and the government is currently preparing its housing bill, but there don't appear to be any particular initiatives where the tourism sector is concerned.
The building redevelopment which has taken place since the 2012 tourism law set out the provisions for hotel renovation has been worth 1,500 million euros, says the Majorca Hoteliers Federation. This helped to revive the construction industry a time, back in 2012, when the residential market was more or less moribund.
In Calvia there are building licences for improvement work to be done to 21 out of the 122 hotels in the municipality (17.2% of the total).
Some projects are continuations of work started in previous winters, which is the case, for example, with the old Hotel Jamaica. This is the final project that had been planned by Meliá as part of the transformation of Magalluf.
Of the 21 projects this winter, which will start in November after the official end of the tourism season, there are seven in Paguera, four in Torrenova, two in Magalluf, two is Rotes Velles (Santa Ponsa) and two also in Portals Nous. There is one project in each of Illetes, Costa d'en Blanes, Palmanova and Illetes.