The Balearic government were forced to perform a rather embarrassing U-turn this week cancelling plans to let hoteliers, hit by the demise of Thomas Cook, keep tourist tax cash. It was a controversial move which led to a split within the coalition Balearic government and an outcry from other business organisations.

Hoteliers have probably been hit the hardest by the demise of the travel giant but even the small shop owner has a case for compensation because this island´s economy is centred around tourism.

Hoteliers are instead being offered a line of credit from the local authorities. Up until recently it was very clear that this island depended on tourism for its livelihood. Just lately, in some quarters, it hasn´t been too politically correct to say that we depend on tourism. I have had this argument on many occasions. I usually use this example; a person selling insurance is not directly involved in tourism but those who are buying his or her products are because a sizeable number of them will be employed by the tourist industry.

Can a corner shop in a Palma say that they need help to counterbalance the collapse of Thomas Cook? Well of course because a sizeable number of their clients will be tourists. Infact, a recent survey claimed that 70 percent of clients of taxi companies are holiday makers. Almost two-thirds of shop sales in Palma are to tourists. So, without tourism this island would suffer very badly. The welcome given to tourists needs to be very warm because they could easily go elsewhere. So perhaps the collapse of Thomas Cook has come as a timely wake up call for some.

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John / Hace about 1 month

Two thirds of shop sales are to tourists ? I find that very hard to believe. It is true though, that many small service and produce suppliers to hotels are suffering and going to suffer if the industry cant find the capital resources to pay off their debts, as the normal liquidation period is around 90 days.

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