Prices for elites
With prices as much as protests under the spotlight as possible reasons for a July slump in UK tourism, the words of the president of the environmentalists GOB, Margalida Ramis, are pertinent. "Tourism for elites is a huge danger. Just look at Ibiza, dedicated to luxury tourism. Prices are made more expensive and nothing is solved. That is not the way."
In an interview last weekend, Ramis spoke about the government's social and political pact for sustainability, the initiative motivated by concerns about overtourism. GOB are represented on three of the twelve working parties set up for the pact. But Ramis is suspicious of the aims, believing that the outcome will be a commitment to elitism in tourism. As this implies a wealthier tourist, prices are only likely to rise.
Spending down and offers available
Over recent weeks we have heard from various sources in the complementary sector (bars, restaurants, shops, nightlife, attractions, etc.) that business hasn't been as buoyant as last summer or summer 2022. It is accepted that there was a post-pandemic spending binge, so perhaps the fall in 2024 was only to have been expected and businesses had in fact raised their expectations of a continuation of strong spending too high.
The restaurants pointed to a 20% drop in turnover in June. They are now suggesting that there has been a 30% decrease over the season thus far. In the car-hire sector, according to the president of the Baleval car-hire firm association, Julio Nieto, bookings have been much the same this year as they were in 2023, but this level of activity has required a cut in prices. Nieto puts this at 15%. Not anticipating an increase in prices in September and October, he concludes that "reaching last year's income is unimaginable".
In Menorca's holiday rentals sector, discounts of up to 40% are said to be on offer for September and October, while hotel groups on all the islands are offering decent reductions. There again, late-season offers are pretty common and it may also depend on how they are being made - general offers or ones targeting previous/loyal customers; the latter would typically be targets.
Going too far with prices?
The complementary sector has been pretty unanimous in arguing that a reason for lower spending is that tourists are having to spend more on the cost of holiday. In other words, accommodation and travel are that much more expensive. Hotel prices have gone up (as have holiday rental prices) and airlines are charging more. As noted elsewhere in this week's issue, the CEO of one of Mallorca's 'big four' hotel groups, Luis Riu of Riu Hotels & Resorts, has said that "hoteliers have gone a little too far with prices". Which presumably includes him.
There are some prices which to many of us will seem plain daft, as in it would be plain daft to pay them. Earlier in the summer attention was drawn to the price of the premium sunlounger service on Cala Major beach - 70 euros. On Formentor Beach, the price for a luxury sunlounger outstrips Cala Major's by some distance - 117.50 euros a day. Social media comment has included a question as to whether this is the price to buy the sunlounger rather than rent it. Another was more blunt: "There are still idiots who will pay it." The beach is of course next to the newly reopened Hotel Formentor. Its prices are among the highest in the Balearics. Are the luxury sunloungers thus a reflection of what Margalida Ramis had to say about elites?
Gathered together in a cave and grooving
Would only an elite contemplate attending a rave in a cave in a protected area? In the past there has been outrage at illegal parties on beaches (and not just beaches where special protection regulations apply), but Ses Coves Blanques caves in Cala San Vicente have been the location for an illegal party and have been advertised as the venue for a second party. The authorities were unaware of the first, but they are aware of the second. It is planned for March next year, publicity on Instagram having shown people dressed in Stone Age costumes who had attended the first party in March this year. Pollensa's mayor, Martí March, says that "necessary measures" will be taken to prevent the party from being held.
The mayor, meanwhile, has found himself in an awkward position over holiday rentals. This has to do with the government's planned legislation that would allow owners to legalise properties built on so-called rustic land. Most of these were built decades ago and many have been operating - perfectly legally because they have licences - as holiday rentals. The government's quid pro quo for legalisation is the withdrawal of licences. This provision was largely in response to urging from the PSOE opposition in parliament. The mayor is a member of PSOE, and he and party colleagues at the town hall supported an opposition motion on Tuesday calling on parliament to amend the legislation and allow the licences to continue.
Moving out and leaving Mallorca
The explosion of holiday lets has undeniably been a major factor in contributing to housing problems. Margalida Ramis, dismissive of the government's legislation, said that "everything is driven by money". "The housing issue is very important. It is something that affects us all."
She referred to the Banc de Temps collective in Sencelles, who organised the first major protest. This was in Palma towards the end of May and it was as much to do with the housing emergency as with overtourism. Three months and more since that protest, there are residents of Sencelles who are in the process of ceasing to be residents. Being driven out of the village by holiday rentals and gentrification was a point the collective had made, and two families spoke earlier this week about their moves, not just from Sencelles but from Mallorca. They are going to Asturias and Castile and León, where prices are way lower.
It's not just Sencelles. Three removals firms in Mallorca highlighted the demand from people emigrating to the mainland. The owner of one of the firms stated: "There is a large exodus of working people who are leaving Mallorca." He is in fact one of them. The family has gone to a small town in Valencia. He commutes by plane most days. "I moved for financial reasons. I would never live on the island again."
House prices in the Balearics keep going up - for those who can afford them
While residents of the island are departing, the removals firms note that there are people arriving: "People from northern Europe with very high purchasing power - Germans, Swiss, Britons, Swedes." It is well understood that roughly a third of all property purchases in Mallorca are made by foreigners. This is the highest percentage in Spain, and there has been a further reminder of this in the context of the latest figures provided by the College of Registrars.
In June, the price of a home in the Balearics reached an all-time high of 3,534 euros per square metre, the highest in the country. A contrast was given with prices in certain other regions - Castile-La Mancha and Extremadura around a quarter of the Balearic price, Murcia a third of the price. These may not be regions that residents of the islands crave if considering a move, but the differences in prices are very marked.
The most valuable municipality in Mallorca
Deya, it's fair to say, is one of Mallorca's most appealing municipalities to live in. It is particularly appealing to foreigners. The foreign population of this small place has been put at 37%. A study from 2020 reckoned that Deya was the second most expensive place to buy a property in Spain. This was questionable, but it certainly isn't cheap.
A report drawn from 2023 land registry data has shown that Deya has a total cadastral value of 209 million euros, way off Palma, which obviously has the highest in the Balearics (23,300 million euros). But the average cadastral value in Deya is getting on for three times as much as Palma. The highest in the Balearics, this is calculated to be 206,983 euros, whereas Palma's average is 72,580 euros