Palma.—Hoteliers from all the Balaearic Islands were acknowledging yesterday that the price increase to tour operators next year will be between 3 and 5 percent although there are establishments where a hike of 8 percent is being imposed.

The tour operators are reportedly anxious to close their deals but they are also demanding that special clauses be inserted in the contracts which will guarantee that the product offered by the hotel at the time of signing will remain in place when next year's season starts. These clauses include demands that there is no mixing of client markets at specified hotels and that the hoteliers don't seek business through other tour operators when exclusivity has been part of the original agreement.

There is some uncertainty about how successful the deals will ultimately be because of the issue of a hike in the level of VAT. It is currently 8 percent for tourist businesses, but if the government does go ahead and increase the percentage, the hoteliers will have to find the difference.

British, German and Scandinavian tour operators are vying to secure the best hotel products in the Balearics, industry sources said yesterday. The marketing trend with all key client countries, a spokesman said, is to encourage customers to accept the higher prices in return for quality service and facilities.

Optimism is not so highfor winter next year due to poor flight connections.

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