IN 2003, the Balearic banking community lent more than 600 million euros (100'000 million pesetas) to the hotel sector on the Islands.
Borrowing was made chiefly in order to finance developments and improvements in Spanish holiday destinations and the Caribbean. BBVA, La Caixa, CAM and Bancha Marc constituted the principal lenders. Sums provided by the banking world to the Balearic hotel industry was similar to that lent during the previous year, although there was some in-fighting regarding quotas as different banks fought to get a share of this lucrative lending market. BBVA (Banco Bilbao Vizcaya) invested 180 million euros last year (29'000 million pesetas), a growth of between 6 and 7 ercent on 2002. They comment that 50 percent of capital borrowed from them related to Balearic hotel expansion in Carribean destinations; the remainder was allocated to developments on the Peninsula and in the Canary Islands. La Caixa lent 150 million euros to the hotel sector in 2003, as much for work outside the Balearics as for refurbishment and upgrading work on the Islands. This bank's contribution represented a growth of 20 percent above the figure they had lent during the previous year. Banca March reported lending to the tune of 115 million euros in 2003, a reduction of 4 percent on the previuos year. They detailed that 55 percent went on new building projects outside the Balearic Islands while the remaining 45 percent was allocated to reform and improvement work in the Archipelago. The bank attributed the lowered investment figure to poor profitability in tourist industry in recent years. Recovery of confidence in the tourist sectorRecovery of confidence in the tourist sectorCaja de Ahorros del Mediterráneo (Mediterranean savings bank) financed 158 operations in the Balearic tourist sector with 110 million euros, a drop of 7 percent on 2002. Similarly, the fall in investment was attributed to falling profits in tourist trade during recent years. The Majorcan Hotel Federation confirmed that consecutive years of poor results had meant that banks were lest keen to invest in further development and upgrading, but the Association of Hotel Chains insisted that maintaining quality in their establishments was a sacred responsibility.
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