RE: NAÏVE BUSINESS OWNERS?
I was amazed at the comment of your correspondent S Moya who wrote the reason for inflated bar/restaurant prices is the fact that landlords charge ridiculous rents for running these businesses. The landlord can only increase the rental price with the index stated on the contract. This could be inflation, RPI, change in annual property value or anything agreed by the two parties. The first two mentioned would mean a small increase in rent, the latter would mean a REDUCTION as property values have fallen.
Basically, there should be no surprises regarding the rent portion of a businesses bottom-line costs and subsequent true profit. I have witnessed landlords asking and getting twice the price a premises is worth, but this is a different problem where the naïve new tenant has not created a proper business plan and has failed to consider any contingency measures. If the tenant has failed to plan properly, they cannot later bleat that they are being overcharged for rent - they should have walked away in the first place and found somewhere else! There is then the letter written by Graham Phillips defending the high prices being charged. Using some of the words written by him, I have created a justification statement which should be included in the travel brochures for next year:-
Before booking a holiday to Majorca you should be aware that many traders have a limited trading season, so in order that they can maintain profits they used to make, you will have to pay top dollar - or maybe a bit more. It seems that some of you believed Majorca to be cheap. Why should this be? They have the third highest earning capacity per head in Spain. Residents enjoy a fine style of living with 20'000 moorings and lots of exclusive golf courses, so you should expect to pay sky-high prices to visit their fine Island and maintain the lifestyle of the residents at your expense. After all, Spain is in the EU and not a third world country - spoiled only by the fact that they are prepared to see the less fortunate ones who cannot find work quite literally, starve to death as there are no indefinite guaranteed minimum monthly state benefits. So holidaymaker, you can rest assured that most of your hard earned cash will go to the greedy bar owner and a fraction to the hard-working bar and restaurant workers - none will be used to feed those malingering scroungers who can't get jobs. Have a nice, but very expensive holiday in Majorca!
Mark Masters, Andratx