Can the Balearic Islands afford to dispense with ten per cent of their tourists?

Can the Balearic Islands afford to dispense with ten per cent of their tourists?

16-06-2021Emilio Queirolo

Over thirty years ago, a researcher with the applied economics faculty at the University of the Balearic Islands authored a paper which drew a highly revealing conclusion. Eugenio Aguiló Perez, now a professor with the faculty, had conducted an “estimation of the social income of tourism”. Through cost-benefit analysis, he showed that ten per cent of tourists spent so little that they caused “a negative addition to the net social benefit of tourist activity”. In other words, the cost to the Balearics of this ten per cent was greater than the benefits derived from tourism.

Before anyone starts shouting ‘cheap all-inclusive’, this had nothing to do with it; all-inclusive was not a factor at the time that Professor Aguiló’s paper was published (1990) and when the Balearics were attracting roughly six million tourists per annum, both foreign and Spanish; there were 16.45 million in 2019. Some 600,000 tourists were therefore of limited or no value, as the income wasn’t compensating for costs incurred, and these costs were and are substantial.

On the indirect side, they include everything from infrastructure and water to police and health services, but Aguiló, in assessing the social benefit, wasn’t solely interested in the indirect equation. There were the direct contributions to local economies (shops, bars, etc.), while there were also the direct costs - those of employment by both hotel and non-hotel sector.

Moving on thirty years from that research, the costs and benefits - their amounts - will quite clearly have changed, but in the absence of updated investigation along the same lines (absence as far as I’m aware), it’s hard to say if there has been any real shift of the cost-benefit equation. A point which should be made is that the most recent salary collective bargaining agreement for the general hospitality sector has put more benefit into people’s pockets in real terms (annual increases well above inflation), but this is just one factor, albeit an important one, and it is cost as well as benefit.

There was further research which did take account of all-inclusive. By 2010, it was possible to conclude, based on the percentage of tourists on all-inclusive packages and on spending by tourists on varying types of hotel board, that some 20% of the islands’ holidaymakers were of questionable overall value. However, that was at a time of financial crisis, and so the dynamics of the tourism market reflected economic realities. Once the crisis passed, prices rose, spending increased and salaries went up.

Although it was thirty years ago, Aguiló’s paper remains one of the more important contributions to tourism research to have emanated from the university. If it were to be the case, and I stress the if, that ten per cent of tourists still imply a “negative addition”, do we conclude that some 1.65 million tourists in 2019 may as well have not been here? Put another way, can the Balearic Islands afford to dispense with ten per cent of their tourists, as they were pre-Covid?

Some different research has just been presented by the university. It’s different in that the study is not the cost-benefit of tourists but their number. A journalist, Armando Pomar, has presented a thesis overseen by the university entitled (in translation) ‘Analysis and antecedents of tourismphobia: the case of the city of Palma’. It is work which is therefore in what has become familiar territory in recent years in that it considers tourist saturation and the resultant strains this can cause, and it doesn’t restrict itself solely to Palma.

Pomar concludes that there were some two million tourists too many in 2019, a figure somewhat higher than the 1.65 million (and for a different reason) but which is in roughly the same ballpark. These two million, he says, are tourists “we generally call uncivil”. By this, I don’t think he’s necessarily saying that they are all anti-social, just that they are above and beyond what society considers to be an acceptable level or - to echo Aguiló - an acceptable benefit. Nevertheless, he does point to tourist offers which should be eliminated, e.g. souvenir shops selling alcohol at low prices, while advocating a more “premium” style tourism.

Above all, Pomar argues that Mallorca and the Balearics should cease to be “servants of demand” and should change the type of tourist the islands receive - eliminating, in his words, the “uncivil”. And his uncivil, it might be felt, are not that dissimilar to Aguiló’s ten per cent and their “negative addition”.

The problem with Pomar’s conclusion is one that keeps being made. Eliminate a percentage of tourists, but what about the employment impact, the social benefit of people being in work? Moreover, in order to achieve this reduction, there has to be a willingness on behalf of all parties - tour operators, low-cost airlines, hotels, unions and so on.
The prescription is one thing, it’s the easy part; the practice and implementation are different things entirely.

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