In 2015 and 2016, tourism in Egypt, Tunisia and Turkey nosedived because of terrorist incidents. Mallorca and the Balearics, perceived as a 'safe haven', absorbed some of the tourist business that was lost in those countries. Tour operators were of the view that the islands had capacity, which was the case, especially in the lower months of the year.
The current circumstances are clearly different. They are far more troubling. Developments are hard to predict. Tourism may appear somewhat inconsequential but is not given the importance it has for economies. Assessments are being made. Antoni Riera, the technical director of the Fundación Impulsa for Balearic competitiveness and author of 'Bases of the Transition Agenda', the government's sustainability pact roadmap for transforming the islands' economic and tourism model, has offered his.
"In the short term, the most immediate impact is concentrated on logistics and confidence. When the perceived risk increases, adjustments are made to air routes, there are cancellations and reschedulings. If the conflict is brief, these effects are usually temporary."
He believes the key for the Balearics lies in what happens at the heart of the conflict and also in how the conflict "reconfigures international tourist flows towards the Mediterranean". When there are episodes of regional instability, "a dual dynamic usually operates".
Riera anticipates a reorientation of seasonal travel towards the western Mediterranean, "where Spain is perceived as a stable destination". A "substitution effect" emerges, whereby demand avoids areas and destinations perceived as more vulnerable; there are "safe havens". Turkey is most obviously vulnerable. Egypt, Greece, even Croatia might be said to be as well.
Then there is the variable of increased fuel costs. In this case, Riera says that part of the demand becomes more price-sensitive." "It can partially neutralise the substitution effect, especially if the situation drags on or if markets enter a period of prolonged volatility."
Increased cost of air transport is filtered through two channels - airfares and operations (energy and supplies), "putting pressure on margins if the market does not allow for equivalent fare increases".