Signing of the agreement in 2017. | Pere Bota

The Mallorca Hoteliers Federation and the two main unions, the CCOO and the UGT, are studying an extension to the current collective bargaining agreement for the hospitality sector.

This agreement was signed in 2017 and came into effect in April 2018. It was for a 17% pay increase over four years. The agreement has already been extended because of the pandemic, with a new one due to take effect by April next year.

In terms of pay, it would appear as if the two sides are willing to settle on five per cent increases for 2023 and 2024, with the total package of the agreement to be renewed in 2025. These increases could be subject to revision dependent on inflation, but the hoteliers are reasonably confident that inflation will ease by the second half of 2023.

The agreement affects some 160,000 workers. For pay, there are different scales - four and five-star hotels; two and three-star hotels; one-star hotels plus bars/restaurants and nightlife establishments.

The hope is that there can be agreement before the end of January. If not, and negotiations drag on, there is a risk of potential industrial dispute, something which the Balearic government would want to avoid, given that there are elections in May.

The unions have been looking at a 15% pay increase, one that the hoteliers have flatly rejected. Talk from the unions has been of a "hot winter" if there isn't a satisfactory agreement, with industrial action potentially spilling over into Easter and beyond. As the bar had been set as high as 15%, it remains to be seen if a much lower settlement can be sold to union members.