Discussions at the Balearics stand at the Berlin fair. | Juan Luis Ruiz Collado

Balearic hoteliers are having to drop their prices by 30% or more in order to retain business this summer. The need to reduce prices came across loud and clear at the ITB fair in Berlin last week.

The extent to which hotels will lower prices will be partially influenced by what they have in the bank following four or five years that were a boom for the Balearics. The president of the Majorca Hoteliers Federation, Maria Frontera, said in Berlin that there has been a great deal of investment for repositioning hotels and increasing their star categories. Now, it will be up to each business to assess its strengths and "adopt a strategy to improve the level of bookings".

The hoteliers were referring to a form of price war, one which - in their view - will benefit no one and will affect hoteliers' bottom lines. They accept that there is a change in the cycle and a reversion to how things were before insecurity in the Mediterranean drove holidaymakers to the Balearics. The real beneficiaries of this change, they feel, are the tour operators.

There is also a view, however, that, where Turkey is concerned, prices there are likely to be ramped up next year, as Turkey's hoteliers look to take advantage of the high, renewed demand. The country's hoteliers will also need to try and generate decent profits, which they aren't at present because prices are so low in seeking to drive demand.

For Majorca this season, the anticipation is that there will be higher than usual last-minute bookings by British and German holidaymakers, who will be watching out for lowering prices.