TOURIST groups, tour operators and specialised travel agencies confirm that during the high season of 2003, the Balearics was the most successful European holiday destination in terms of package deals sold as last moment offers. Discount percentages were higher than 20 percent off brochure prices in the majority of cases.
However, this strategy will witness a major decline this year, especially in Majorca, as a consequence of lower hotel prices and incentives introduced by hoteliers and owners of tourist establishments to give impetus to an early booking trend. This tactic is already showing positive results in the key German client market. In the case of Thomas Cook (part of Condor & Neckermann-JMC), it was confirmed that the Balearics, in absolute terms, was the most sought after destination of any of those offered by the travel consortium through last minute offers over the last holiday season. Sources reported that more than 50 percent of the clients which the group brought to the Balearics in 2003 were “prompted” to take such a break by taking advantage of last minute offers of between 10 and 45 percent discount off the brochure price. Such discounts were applied chiefly by the heads of hotels and tourist establishments but also by the tour operator, Neckermann. Signals from LTU-Turistik (ITS-Tjareborg-Jahn Reisen) group were similar in saying that more than 50 percent of the reservations made through them in the Balearics last Summer were sold as a result of more than 20 percent discounts off brochure prices. The group highlighted the fact that the percentage level of their clients who visited the Islands was rivalled only by those who went to Tunisia, a holiday destination that also suffered a serious recession in its tourist industry in 2003. Another example of the success of this business strategy last year was the TUI (TUI-Thompson) group, who said that although they registered other destinations as having achieved higher pecentages of client visits as a result of last minute offers, the total number of people in absolute terms visiting the Balearics through their tour operations, put the Islands at the top of the list of holiday destination choices in Europe. Only Scandinavian tour operators, from the British group My Travel, announced that while the average of all their sales made through special offers reached 30 percent, sales to clients for reduced holidays in the Balearics stood at 20 percent. Even so, these figures reflect “the highest percentage of sales for last minute offers in the last few years”. My Travel, which was still not able to release information from its British tour operators, pointed out that their Scandinavian division, had reduced their hotel quotas by 25 percent in the Balearics in order to match supply with current demand and to counteract the trend for making sales at the last minute through reduced offers.
Loss of profit
The president of the Hotel Federation of Majorca, Pere Cañellas, confirmed that the strategy on the part of hoteliers to drop their prices drastically at the last moment has had a marked effect on the accounting results for the year, resulting in a loss of profit of some 15 percent compared with that for 2002. The industry judges these profits to be the worst since 1990.