BALEARICS FACING TOUGH SUMMER COMPETITION THIS YEAR

By Humphrey Carter
NOT so long ago, the Balearics had very little competition in the Mediterranean and until last year, enjoyed a long reign as the number one holiday destination in Spain. However, this year it has some serious competition to fight off. Not only are domestic destinations like the Canaries and Cataluña, which both nudged the Balearics off the top spot last year, providing tough competition, there are ten other Mediterranean destinations now in the summer sun and beach war. All are targeting the United Kingdom and German markets. The British market is now Spain's number one client with the struggling Germans in second place and while a further increase in the UK market is forecast for this year, along with a recovery in the German sector, the hungry competitors are all vying for a slice of Europe's two largest holiday markets. Spain as a whole will never lose its new position as Europe's number one destination, although certain resorts will benefit from the losses of other domestic destinations, such as the Balearics has experienced over the past three years. During that time, destinations such as Croatia, Bulgaria, Turkey and Egypt have come to the forefront of Mediterranean tourism and, despite short lived interruptions because of political unrest, are continuing to grow in popularity with both British and German holidaymakers. Over the past two years, for example, the number of holidaymakers heading to Bulgaria has risen by 9.8%, Egypt 11.4% and Turkey 13.8%.
While Spain has enjoyed continual growth in the number of visitors over the past two years, the British market has grown at an annul rate of around seven percent, the Balearics is the region which has suffered the most, primarily because of the drop in the German market. The number of visitors coming to the Balearics in 2002 fell by seven percent, although it did post a three percent rise last year.
However, compared to the year 2001, the number of visitors coming to the Balearics is still three percent shy. According to Innovative Real Estate Advisors which carried out the recent study into the Mediterranean summer holiday market, while Spain will remain as the market leader, competition between the key Spanish resorts and the main Mediterranean destinations which have emerged over the past two years is going to get extremely tough. One of the reasons why Germans have turned away from the Balearics in favour of Croatia, Greece and Turkey is that they are getting more value for money. No sooner had the euro been launched and Germany gripped by recession, the Germans started complaining the Balearics had become too expensive.
The British are spoilt for choice, armed with the strong Pound which has been the strongest currency over the past month, they have not noticed the Balearic price hikes too much, but they can also enjoy high spending power anywhere in the Mediterranean. So far this year, the start to the summer 2004 holiday booking period in the UK has been slow. But all of the tour operators are confident that the market is about to dramatically turn around with the annual holiday price war raging.

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