Restaurateurs and hoteliers in the Playa de Palma have assessed the impact of the war in Iran and the Middle East on the sector; whilst the former advocate ‘price restraint’, the latter speak of ‘uncertainty’. This was the view expressed by the president of the CAEB Balearic business confederation hostelry boss, Juan Miguel Ferrer, and the president of the Playa de Palma Hoteliers’ Association (AHPP), Pedro Marín, at a press conference held to mark the start of the tourist season in the area and to discuss the consequences of the conflict.
Ferrer argued that, due to the global geopolitical situation, there will be “greater pressure” on customers’ wallets, so they expect “moderate spending”. Furthermore, he warned that inflation is something that “greatly affects the restaurant sector” but asserted that “no restaurant owner has raised prices” because of the war.
He pointed out that the war “affects everyone” and emphasised that Mallorca “may suffer” due to the high transport costs it may entail. However, Ferrer emphasised that the sector’s approach is to focus on “price restraint” to remain “attractive”, and therefore argued that these cost increases will be absorbed by “the bottom line”.
As for whether the outbreak of war could lead to an increase in the number of tourists visiting the island, he noted that 20 or 30 years ago, when there were attacks in other tourist areas, tour operators redirected demand to other destinations.
The representative of the restaurant industry association noted that, currently, the effect of such events is that people intending to travel tend to cut back on spending, and he likened this to the situation caused by the war in Ukraine, when he remarked that “scepticism” had arisen.
Speaking on behalf of hoteliers, Marín noted that the “uncertainty” they face is due to potential price rises in the fuel used for air and sea transport. Nevertheless, he indicated that an initial overall analysis they had carried out showed that it had “not affected them” in terms of bookings, with “similar figures” to other years.
In the resort, the majority of tourists are German, and although the country has been in recession for three years, he argued that travel is “well-established”. At the same time, he argued that when there is a war, Germans tend to opt for domestic tourism or travel to neighbouring countries such as the Netherlands, Luxembourg or the North Sea.
Asked how long they can maintain current levels if the conflict drags on, Ferrer commented that “we’ll have to see how long inflation can be sustained”. One of the problems they face would be the rise in the price of cooking gas, a point he highlighted in relation to Iran’s attack on the Ras Laffan gas refinery in Qatar, which he predicted would affect supplies “over the next three years”.
For the hospitality sector representative, the key is that ‘goods keep flowing’ and that no rationing is introduced, but also that the prices of basic commodities such as olive oil do not rise; he has calculated that this has risen by 85% since the war in Ukraine.