The actual tariff is also unknown, but the minister must have an idea in order to be able to throw out an undefined percentage of 1.7. This is presumably based on the average cost of a holiday, but how has this been arrived at? To quote 1.7% is largely meaningless.
Barceló is right in identifying the existence of tourist taxes elsewhere, and the reference to Catalonia is the most meaningful in this regard. The tax there has been working well enough and significant revenue is raised, but it is important to appreciate the experience that Catalonia has had. Initially, its tariff would have been of a level to bring in approximately 100 million euros tax per annum. The tariff was revised downward because the Catalonian government, responding to criticisms, was persuaded that it would be too onerous.
The revised tax is what now applies, a variable one depending on accommodation and location. A typical rate is 0.90 euros per night (for seven nights) for a four-star hotel in a tourist resort; it is twenty cents higher in Barcelona.
The consequence of this revision is that Catalonia receives some 40 million euros a year, and this is raised from a substantially greater number of tourists than come to the Balearics annually: at least a third more. It is also raised from the private apartments that Catalonia has regulated. As Barceló appears to be scaling back the scope of the tourist tax, what might the annual revenue for the Balearics be? More than Catalonia’s 40 or so million? It seems doubtful, and so it raises an issue regarding the funding shortfall that is part of the justification for the tax. While, say, 30 million will come in handy, it isn’t a huge amount in the scheme of things, and the uncertainty as to how it will be used makes one fear that it will be spread too thinly. Catalonia has never been in any doubt as to why it has its tax. It is to pay for tourism promotion and some infrastructure.
Barceló also doesn’t address the issue of private accommodation regulation satisfactorily. He has said in the past that this regulation would need to be in place before the tourist tax was introduced. In order to avoid the hoteliers being able to claim discrimination, as they did with the old eco-tax, the government has to ensure that the tax will be as widely applied as is possible. But there is no evidence, as yet, of their moving to adopt rigorous regulation.
While Barceló refers, justifiably, to cracking down on large-scale illegal rentals, he appears to be handing carte blanche to the owner with a single property who also pays no tax. This is pragmatic in that the resources simply don’t exist to pursue everyone, and these resources are better deployed in rooting out large-scale fraudsters, but Barceló himself has acknowledged that the major increase in private lets has contributed to what he has described as tourism “saturation.” There is, therefore, an inconsistency here, and it is one that opponents of the tax, such as the hoteliers, will exploit.
On all-inclusives, the business with self-service alcohol is frankly a red herring, except when it comes to employment, but all-inclusives - those at the lower end of the market in particular - have long sought to minimise staffing levels in order to extract maximum returns from what (all-inclusive) is not a particularly profitable business model. Underlying the minister’s answer is, one suspects, the wider issue of job creation, though he hasn’t addressed the issue of creating jobs of greater “quality” or those which aren’t short-term and temporary. Fundamentally, if there is to be all-inclusive regulation it needs to be on the basis of very strictly applied levels of service and quality.
But coming back to the tourist tax, Barceló seems to have a romantic idea that all tourists are so in love with the Balearics that they will gladly part with some cash, even if, in the end, the tax demand is relatively minor. Unfortunately, not all tourists are in love. They look for value for money, not to reversing the negativity of their environmental footprint or assisting with Madrid’s underfunding. He wants everyone to work together. He’s got a hell of a job convincing them.
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"Tourists look for value for money, not to reversing the negativity of their environmental footprint."Exactly why we need the tax.
Excellent analytical article. If Barceló has a figure of 1.7% then he must also have a base tax figure from which to calculate this percentage. But he has not told anyone this figure. Is it so high that it will scare people further? One obvious point from the previous interview with Barceló is that he keeps mentioning Mallorca; Menorca and Evissa will also have to levy the tax. Will all of the proceeds go to Mallorca, as in the last "Ecotax"? When the Balearics have had a boom year, unfortunately at the expense of other trouble ridden resorts, now is the time to capitalise on those new tourists, not drive them away with an extra tax. We have gained some new tourists: let us try to keep them!