Crunch, Crunch

Credit crunch and economic uncertainty if not exactly recession, the British economy may be having a rough time, but it does not necessarily mean an equally rough time for the Majorcan tourism season which, if there were such a thing as an official date (which there isn't), kicks off on 1 May.

According to the head of the Spanish Tourist Board, as reported in "Majorca Daily Bulletin", "there is no need for alarm", figures should at least match last season (an alleged record year) or be up slightly. From what I am aware, talking to people from hotels locally, the figures do indeed seem very good. Hotels are booked out (or at least the tour operators have taken up their options), and there could well be some sense in the argument that short-haul destinations, such as Majorca, will fare well in the current economic climate despite the euro-pound imbalance. 

However, there is, I feel, a degree of over-optimism. To state that "Spain is still one of the cheapest Euro-zone destinations" is to ignore the fact that prices have gone up, in some cases quite substantially. The "slight increase in a bottle of beer" may well be "offset by cheap air fares", but tourists do take note of prices like the cost of a beer and are aware that they are not as low as they once were. That also said, there is perhaps an awareness among traders that they have to compete on price. I saw a sign the other day, announcing "Pint of San Miguel, 1.50 euros". That is pretty damn cheap, assuming it's pucker Saint Mick and not some alternative that tends to get fobbed off on the low-grade all-inclusives.

Perhaps the most important issue is the actual spend once tourists are in Majorca. This has shown a downward trend in any event. With the credit crunch and, one fancies, greater indebtedness to fund the holiday, it would be a huge surprise if this spend were to recover this year; the strength of the euro does not help either. 

The hotels may well be booked out, the figures may well be very good, but these pieces of optimism do not, in themselves, mean a great season. And then there is next year, which may be the most worrying aspect of all, namely that the market could be impacted negatively by the euro. No, there is no crisis, but the good news does perhaps disguise an at least temporary malaise.

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