IRONICALLY, it was as a result of the recession in the 1970s in Great Britain that Geoffrey Kenyon, the proprietor of the famous Wellies bar restaurant in Puerto Portals, eventually went into business here in Majorca, in the late 80’s and, apart from becoming a leading businessman, he is also passionate about Majorca, hence why he is not at all impressed with how the local authorities have responded to the current recession which hit the country in the middle of 2008 and, according to Geoffrey, is by no means over despite recent reports of an economic upturn.
Geoffrey first came to Majorca in 1970 and spent a year here running a theatre company then, when the recession hit the UK in 1973, he eventually went to work in the construction industry in Saudi Arabia and during that time, he and his English-based family would meet up for their holidays here in Majorca.
In 1983, Geoffrey decided to purchase a property here and then in 1986, he began renting the bar/restaurant he named Wellies in honour of his dog Wellington, who ate most of his Persian carpets while in the Middle East and Lord Wellington who, as Geoffrey points out, "saved Spain from France."
In 2001 Geoffrey bought the sublease for the building and, because of the recession, sold that back to the port last year while retaining the business.
Fight the system
Geoffrey admits that it was a slow start at first, but it was not long before Wellies became known throughout the world, primarily because of its large nautical clientele.
But, it has not been an easy ride for Geoffrey and he is still trying to fight the system here in Spain.
"The port managed to get through the recession from 1989 to 1993 relatively unscathed because we are an extension of Palma, where places like Andraitx got hit hard and I think many people thought that the same would happen this time around.
"Well, it has not. We saw business drop by 20 percent in the first year and over the last three, I can honestly say that we have flat lined with annual losses of around 40 percent and, as a result, we have had to reduce the number of staff and adjust to the change in the market.
"That said, we have done everything we can to keep as many people employed as possible, I have an excellent team, and to preserve the business and this Winter we are open every day from, midday, so we’re not doing breakfasts and not closing on Tuesdays as we did last Winter because we found it was not cost effective and, based on November’s results, it was the right the decision to make but, we are working from month to month, we are running on empty.
"And, what we are going through is not a recession, it is a correction and we need to adapt to a future which is going to be very different to the past.
"We are now paying the price for having enjoyed years of over spending and because Spain is part of the Euro and unable to devalue its currency by around 28 percent, which is what the former Governor of the Bank of England Mervyn King told me Spain would need to do to get out of this recession, this country is going to struggle for a very long time to emerge from this crisis and, as I said, when it does, things will be very different with businesses turning over a maximum of 80 percent of what they were pre recession.
"But, being part of the Euro is not Spain’s only problem.
"As an employer, its outdated labour laws are terrifying. For many companies, they simply can not afford to get rid of long serving staff because for every year they have worked, they are entitled to 45 days pay and then they enjoy two years on the dole collecting 90 percent of their wages. That neither helps employers nor the government.
"Employers therefore are stuck with staff they may no longer need and that is one of the reasons 50 percent of the unemployed are under 25 because no jobs are being freed up, the employment market simply is not moving because of the labour laws that no governments appear to want to change them.
"So, there’s no young blood coming through in business, all they can hope for is some temporary work during the Summer or leave the country and find work elsewhere and a brain drain does not bode well for the future either," Geoffrey said.
"So, this has made this recession/correction a generational problem and that is why it could take Spain as long as ten years to properly get back on its feet.
He also fears that another negative result of such restrictive and costly labour laws is that big businesses will simply be forced to close if they can not afford to down size and that will lead to the return of the small family business, although many of the small business have been the first to have fallen victim to the recession.
"One of the big problems is that the price of commercial property has been too high and therefore owners have been forced to charge exorbitant rental levels which, as businesses have seen their takings drop, has forced many to close. OK, we are seeing fashionable businesses come and go, but only the staple ones, likes ours, I don’t consider us to be a fashionable business, we are able to just about survive," Geoffrey added.
But, looking at the picture closer to home and Geoffrey’s heart, he is deeply concerned about the little that is being done at government level to help Majorca.
"Look, here we are sitting in the glorious sunshine on 6 November while parts of Northern Europe are being battered by hurricane-force winds and there is hardly any one about and it’s quite simply because there are not enough flights during the Winter and nearly all of the hotels are closed.
"I know it’s a chicken and an egg situation but someone has to make the first step and I think the local government needs to take on the hoteliers and the airport authority AENA which, as we’ve seen in reports this week, has been bleeding Palma airport, it’s their most profitable in Spain.
"AENA should be made to slash its Winter operating costs and offer incentives to airlines to fly here while the government should make the large hotel chains have at least 25 percent of their establishments open.
"The large Majorcan hotel chains, now some of the biggest in the World, owe it to Majorca. This is where they started, this is where they made the money they have since invested every where else in the World apart from Majorca.
"And, I understand that the government helps subsidise hotels for five to six months during the Winter to help cover costs. That should be cut to three - no other industry on the island is getting any Winter subsidies, so why should the hoteliers.
"So, then we would have hotels open, places to stay and airlines more interested in flying here.
"Nevertheless, we’ve got Cyprus Air, Air Malta, why can’t we have Air Majorca or why can not the government cut a deal with someone like Air Berlin and make sure that regular flights are operating between Majorca and the UK’s main regional airports throughout the Winter with flat rate fares that do not change?
"I remember people used to buy season tickets when British Midland was operating its daily service out of Heathrow.
"Iknow there are flights from London and Manchester but what about the rest of the country, what about Scotland?
"It’s only Air Berlin and the Germans which are keeping us afloat, the Britons have gone as have as the Scandinavians.
"No one is going to waste six hours and spend more on a taxi than they have on their flight to come to Majorca.
"Forget Winter competition from Cancun or Disney Land Florida, they are different markets.
"During the Winter in the 70’s there were more flights from the UK to Palma than there are now. Why?
"We need those million tourists and, from a business point of view, the tourism figures we are given are a joke, Record year? Rubbish. With Palma now being used as a major hub, some 45 percent of passengers using Palma airport are not actually coming here, they are catching connecting flights.
"Then you have the others flying in to simply jump on a cruise ship.
" The reality is that probably only 33 percent of passengers are actually staying here and that is the figure the government needs to be working with. But sadly, this current government, or at least the Ministry for Tourism has done absolutely nothing to boost and help the industry.
"Not only are we losing Winter tourists, we’re also losing residents because they simply can not get here easily during the Winter."Iremember 12 years ago Minorca died for that very reason and a lot of people moved here, now they are moving toAlicante because of the air connections. If we’re not careful Majorca could die as well because as the Summer seasons get shorter, making a living gets harder. It’s time someone takes the lead and does something."