Over the past ten years there has been a doubling of the number of four and five-star hotels in Majorca. There are now 412 hotels with a four-star or four-star superior classification and 53 with a five-star rating. At the opposite end of the rating scale, the number of one-star establishments has declined from 155 in 2007 to 109.
The increased quality of the hotel product has come about because of heavy investment. Much of this was facilitated by provisions in the Partido Popular government's 2012 tourism law. That legislation placed a premium on modernisation of hotel stock and offered incentives for hotel chains to invest in quality improvements: the law permitted the addition of extra rooms.
The Balearic College of Architects (the professional institute) reports that in 2017 there was a scheduled investment of 199 million euros; this was for hotels that had been given planning permission for redevelopment work. Some of this investment applies to work to be carried out or completed this year, but there is now a question mark over investment going forward. The current government did grant an extension period to the provisions of the 2012 law, but this expired last July.
The government is still working on new conditions for future work to raise hotel star ratings. These include so-called social clauses in employment contracts, such as working hours and equal pay.
The hoteliers have to some extent pre-empted moves by the government. The new salary agreement for the sector - 17% over four years - took the government by surprise as much as it did the unions, who had been looking for ten per cent.
The investment in quality has been one justification given for increases in hotel prices. Business performance by hotel chains has undoubtedly improved over the past two to three years because of increased prices and high demand. A measure of performance - the RevPar ratio of revenue per available room - was on average 80.50 euros last year; in 2010 it had been 44.70 euros.
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