Hotels in Mallorca slash prices to attract guests as supply outstrips demand

Hotels in Mallorca have slashed their prices in a bid to attract guests as supply outstrips demand.
The Mallorca Hoteliers Federation (FEHM) has announced that there is currently 81.7% availability of hotel beds on the island, the number of hotels which are open having now risen to 683.
However, the federation also noted that occupancy rates are lower than would be expected at this time of the year. The fact is that there are far more beds available than there are tourists, a fact that is prompting hotels to make very special offers in order to attract custom.
A price war now exists in certain resorts, e.g. Alcudia and Cala Millor, with advertised discounts of up to 40%, which will clearly affect hotel profitability. There is also concern that these offers may attract a certain type of clientele that is harmful to a resort’s image.
Over the past week or so, a further seventy hotels have reopened, taking the total to 683. The problem is that these have merely been added to a scenario of too much supply and too little demand.
Predicted guest figures aren’t being met, while hoteliers continue to face uncertainty and the possibility that foreign governments could change their travel regulations, usually at short notice.
Some hotels have said that occupancy is running at only 15 to 30 per cent. This means that decisions are having to be taken to close hotels and reallocate holidaymakers who have booked to establishments within the same group that have higher occupancy levels.
The offers are either through direct sales or online agencies. With tour operator agreements, prices are fixed. However holidaymakers choose to book, though, there are concerns that if reservations from the main foreign markets don’t pick up in the short term, hotel businesses will have to act in order to try and avoid losses.
Best known among the Mediterranean island group’s islands are the three largest, Majorca, Minorca and Ibiza. In a normal year, they would be buzzing with activity now, restaurants, bars and street vendors are working around the clock to secure the revenue to carry them through to the winter.
But nothing is normal this year- coronavirus restrictions and the decline in global tourism have left streets and beaches half-empty, and one look at the prices for package holidays reveals just how deep the crisis is cutting.

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