Balearic tourist tax increase

Majorca could lose German visitors, tour operators warn

The doubling of the tourist tax on Majorca, Menorca, Ibiza and Formentera next year could prompt German holidaymakers to switch to rival destinations to avoid higher prices, German tour operators are warning.

September 05, 2017
Will Germans sail away from Majorca to other shores?
Photo: Getty Images

The tourism minister of the Balearic Islands, Biel Barceló, announced last week that the so-called eco-tax will go up by 100% in 2018. The tax will double from two euros to four euros per person per night for visitors staying in four- or five-star hotels, while it will go up from 50 cents to one euro for the cheapest categories such as hostels, bed-and-breakfasts and campsites.

Moreover, cruise passengers who so far did not have to pay anything if they stay for less than 12 hours will also have to pay a charge next year. The regional government is considering charging them two euros per night.

Barceló defended the measure and emphasised that the current tax, which visitors pay directly to the hotel, has been accepted and has not resulted in any fall in visitor numbers to the islands. The regional government’s finance minister Catalina Cladera expects the tax increase to generate an additional €100 million in total.

But European tourism groups believe the move could hit demand for the Balearics next summer. Thomas Cook Group CEO Peter Fankhauser, for example, already warned in advance that any higher tax could have consequences, and families above all might book alternative destinations with similar value for money holidays.

In Germany, most tour operators were worried about the potential impact on bookings for summer 2018.

TUI described the tax rise as being the same as a price increase “which could mean a competitive disadvantage for the Balearics compared to other holiday destinations”. The market leader underlined that customers compare prices very carefully and a doubling of the tourist tax was therefore “the wrong signal”.

Alltours warned that German consumers would not understand the tax increase which could have grave consequences. Given that Majorcan hotels had also increased their prices “drastically”, the destination was no longer fully competitive, the tour operator declared. “In connection with the tourist tax and its announced doubling next year, Majorca must expect a significant drop in visitors,” warned Alltours, which is one of the largest German tour operators to Spain. However, the company did welcome the move to charge the tourist tax to Airbnb hosts whose guests currently do not pay the tax.

FTI issued a similar call. “We believe a doubling of the tourist tax on the Balearic Islands is unreasonable,” said Manuel Morales, Group Head of Destination Spain. “Instead, they should think about how to charge the current tax on guests who do not stay in hotels but in (mostly illegal) private accommodation,” he urged.

Morales said that prices on the Balearic Islands had already reached levels to scare away visitors this summer. “We believe that a higher tax will further negatively influence demand,” he warned.

DER Touristik, in contrast, was less concerned. “Based on the experience of this year we do not expect a noticeable impact on demand for travel to the Balearics,” commented product manager Nils Lübbe.

In Spain, the tax increase has also been heavily criticised. Juan Molas, president of the Spanish hoteliers association, and Inmaculada Benito, president of the Majorcan hoteliers association (FEHM), both condemned the rise. Benito warned that restaurants and shops would feel the effects most as holidaymakers would have less money available to spend at their destination.

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