Demand earlier this month has fallen off. | Teresa Ayuga

According to the president of the Palma and Cala Major hoteliers association, Javier Vich, hotels in the city have been dropping prices by 40% since mid-December in a bid to counteract a fall in European demand.

Following what was a good period for the Constitution Day break, reservations have more or less stalled, the exceptions being for the final three days of the month - "Demand for the New Year has met expectations, both the Spanish and international markets."

Vich highlights two negative factors - inflation and disruption to flights. "The impact of inflation in the European markets is affecting consumption, a situation that concerns us if it continues over the first weeks of 2023." As to problems in the aviation sector, these have been occurring in the UK, Germany and Spain and have led to cancellations.

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Excluding bookings for December 29 to 31, Vich says that average occupancy is around 45%, which is ten per cent lower than at the end of 2019. He adds that an "adverse" situation that hadn't been expected is being faced by the 85% of hotels that are currently open in the city.