Streets of Soller in lockdown

Streets of Soller in lockdown.

27-03-2020Rachel Fox

Can you cast your minds back to the 1970’s? The world was a strange place in the UK with a three-day week and the lights going out at 10 pm. One of the consequences of this austerity era was the amount of spending money you could take with you on the rare overseas holidays of the time. The bank had to note in your passport how much cash you had withdrawn before you left. Even telling the story, which I experienced, makes the world sound as though it had gone mad.

I was one of the intrepid travellers of the time and together with my infant daughter hit the heights of the Magalluf in the days of old. Every hotel, bar and restaurant based their prices around what the Brits could afford. This meant that everyone had a great time within the money they had. Of course the fine restaurants, such as there were then, still catered for the rich. The money was there in large pots for some even in the 1970’s.

I am using this example with clients who are talking about their half year plans in Soller. Most expect some restarting of the tourist bus by the end of June. This is of course, a prediction at the moment but business has to have a start month for its projections. So taking the 1974 models can we learn anything?

The rich are always with you and the yachts will bring their celebrities and moneyed people to our beaches. The restaurants and hotels who cater exclusively for this market will continue to charge their prices. The biggest problem for those businesses is country loyalty. The rich may not travel so far afield this year because they want to give something back to their own countries economy. This altruistic sentiment will not last but for 2020 it is likely to be a feature.

The next group are the second home owners here who are huge spenders. They eat out and entertain friends who come to stay and are an important contributor to Soller Valley income. Some of them are retired and have a steady income but many live on the money from letting their holiday home in high season. This sector is hit in the same way as the hotels. The prediction is that many will use their second home themselves during the summer as their bookings have dried up. They will have less money to spend in restaurants.

The Hotel Guests are also extremely important to the livelihood of Majorca. The prices they have paid for their holiday will be one they have stretched themselves for. This is already being worked in to the deals for the Summer of 2020. Half board is the choice of many who want to know before they start what their holiday will cost.

Humans of Majorca represent all sectors and the residents are the group with least choice. Hit by the closure of everything and living on limited state financial aid means that eating out and spending time in bars will not be on the horizon for most. If work commences for the second half of the season they will be playing catch up with their finances and those waiting in the wings for utility and other payments. They will get themselves walking in the mountains and enjoying the beaches during their days off but they will accompany it with a picnic from home with not a penny spent anywhere.

So what’s to be done in this first season of ‘The Brave New World? I think that the 1970’s have a lesson for us. This was the time when resorts pitched their menus, drinks and activities to the prices people could afford to pay in austerity. This is a very tough call for restaurants and bars because they are likely to have social distancing restrictions placed on them. So fewer people allowed in their establishments with little money to actually spend. What a difficult business model to contemplate.

Zoom and Skype meetings to discuss all this has been the nature of this week. In many ways this is encouraging as companies are really thinking their way through the rest of 2020. The reality of it all has caused some to need more time to think about the wisdom of their plans. The fear is that some might say they will write off 2020 and start again next year.

The one feature not included in this article so far is the support from the Government which Humans of Majorca can expect this year in the business sector. Majorca needs visitors and they need restaurants and amenities to be open charging reasonable prices. Early indications are that the Majorcan lawmakers understand this and are working on a programme of support to make sure this island gets up and running again as soon as the green light is given.

All of us involved in these discussions this week have no crystal ball but we were discussing ‘in best case scenario’ mode. The one point which emerged above all else is that price this year is going to be king. All businesses need to look at their prices and come up with realistic expectations for 2020. A hard lesson for all who have enjoyed the benefit of growth since the 2008 recession.

A ‘Brave New World’ is dawning…

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