Balearic politicians were out in force at the World Travel Market.

06-11-2017CAIB

The politicians were out in force yesterday for the first day of the London World Travel Market. President Armengol, tourism minister Biel Barceló, Palma's mayor, Antoni Noguera, and the president of the Council of Majorca, Miquel Ensenyat, were all present for an event at which the Balearics face some awkward issues, in particular the increase in the tourist tax.

The tax is not typically a subject which is given a public airing at events like WTM. Neither hoteliers nor tour operators wish to dwell on it. In private, however, it is a different matter. The one source which does offer a public expression of opposition is the Spanish government. National minister for tourism, Álvaro Nadal, conceding that the tax is a matter for the Balearic government, said that he didn't consider it to be helpful.

Brexit and the loss of Monarch Airlines were other matters on the agenda, the latter an issue shared with the Canary Islands. Something else in common between the Canaries and the Balearics is the raising of the residents' flight discount to 75%, though this was a subject of more parochial interest than for most people attending the travel fair.

An additional potential complication for the 2018 season is the increase in prices. Abta's Sean Tipton said in advance of the fair that other destinations, such as Turkey, are going to be that much cheaper next year, which was hardly a revelation. He added that he expected that the main sales period for 2018 holidays will be after Christmas. With the report last week that reservations for UK package holidays to Majorca were - as of the end of September - down by nine per cent, then there is clearly scope for a sales boost.

The fall in the pound also seems to be having an effect. This clearly doesn't only have an impact in the Balearics, but the general rise in prices allied to a weaker pound may well explain another observation from Abta - that bookings to the Balearics are down on what they have been over recent years of significant growth.

Other Spanish holiday destinations are obviously affected in the same way as the Balearics by the pound, prices and the rebound in demand for competitor destinations. The hoteliers association in Benidorm were also observing that these competitors are attractive for UK tourists. Benidorm is likewise affected by the Monarch collapse, while the association was also expressing its concern about the political situation in Catalonia. Minister Nadal, in his press briefing, said that he expects a "blip" (in terms of tourism) in October and November to be overcome and for there to be a "normalisation" of the situation by February.

It was also being said ahead of the fair that the governments in Egypt, Tunisia and Turkey might be contemplating devaluations in order to boost competitiveness. As their respective currencies have all either been devalued or undergone market depreciation in the recent past, their capacities for further devaluation might however prove to be limited.

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