Sustainable tourism funds for the Balearics … and they are not from a tax

The Spanish government has fleshed out the distribution of funds from the first tranche of investment under its “extraordinary programme of sustainable tourism plans in destinations”. This programme, endowed with 1,858 million euros over three years, is the most substantial element of an overall scheme for tourism modernisation and competitiveness, for which there is the grand total of 3,400 million euros.

The initial distribution equates, more or less, to one-third of the 1,858 million euros – 614.67 million euros, a remarkably precise figure, due to be made available immediately. Of this, the big five sun-and-beach tourism regions will between them receive almost 50%.

Andalusia tops the list with 72.62 million, followed by Catalonia with 69.87 million, Valencia 49.85, the Canaries 49.59 and the Balearics 47.75. In terms of an average for the seventeen regions, the Balearics are therefore winners to the tune of 11.6 million euros. Winners, but one wonders how happy the regional government will be.

The Spanish government’s approval of the distribution comes just over a year after the programme was first announced. There were five strategic areas of action that explain the total spending of 3,400 million over a three-year period.

Others included “tourism product development and modernisation of the tourism ecosystem” and “commitment to digitalisation and tourism intelligence”. How these areas differ is something of a moot point, as while the investment is undoubtedly to be welcomed, it is shrouded in the complexity of jargon.

Still, we now at least know how the main item – sustainable tourism plans in destinations – is to be divvied up. Over the next two years, it can be anticipated that amounts received by the regions will be roughly similar, there being criteria that guide the distribution. One of these is territorial, i.e. the size of the region and the population density. Another is, quite simply, tourism – the number of foreign tourists and their spending as these were in 2019.

Where this latter criterion is concerned, the Balearics would have grounds for complaint, as indeed would other regions. Catalonia has historically been the national leader in attracting foreign tourists, with the Balearics and the Canaries vying for second spot.

In 2019, the Balearics were second. If one then considers the territorial criterion, the gripe can legitimately be greater. The smallest of the big five in terms of land area is the Balearics, where there is the lowest population but the highest population density. And that is before one factors in the floating population of tourists.

If the Balearic government does feel hard done by because of the distribution ratios, then it has consistently been discontent with how the regional financing system is arranged. With this system subject to review, the government argues that there should be a more favourable deal because of the pressures and demands of overpopulation – and that most certainly includes the floating population of tourists.

The government does have a strong point, so while funds from the “extraordinary programme of sustainable tourism plans in destinations” might be underwhelming, compensation could be provided through regional financing. Not, it has to be said, however, that we are talking about the same thing, as regional financing essentially pays for general purpose needs, such as health and education, whereas this “extraordinary programme” is specific to tourism.

It’s hard to say if 47.75 million euros is too little or too much (it’s most unlikely to be the latter), as we don’t know what it will actually be spent on. In announcing the distribution, Spain’s tourism minister, Reyes Maroto, spoke of an “historic investment” through which the country’s tourist destinations are to be supported like “never before”.

This investment, she said, will be for “tourism innovation capable of integrating environmental, socioeconomic and territorial sustainability and to develop resilience strategies in the face of new challenges of climate change, tourist over-demand or health or security crises”.

In other words, it is investment in the normal broad-brush, vague concepts to which we have become accustomed. The devil, as always, will be in the details, whenever these are offered.

And one trusts that the details will be tourism specific, unlike a different form of sustainable revenue that often has little to do with tourism, namely the sustainable tourism tax, aka tourist tax or ecotax, which the opposition Partido Popular (against the tax in principle) are mischievously proposing should in fact be an ecotax and solely for environmental projects.

One finds it rather extraordinary that it has taken a pandemic to light the fire of all this spending on tourism – extraordinary in that the wherewithal didn’t apparently exist previously.

One says all this spending, yet the 47.75 million for sustainable tourism plans in the Balearics as a destination is someway short of what the regional government hopes to rake in from the sustainable tourism tax in 2022 – not far off 100 million short.

But at least we can be sure that the Spanish government’s handout will be for tourism. Can we not?

Winter tourism optimism fades …

It is perhaps as well that Mallorca and the Balearics don’t have a vibrant winter tourism season. As there isn’t, there can’t be too much anxiety if it looks as if this tourism is in danger of being reduced – again.

For parts of Spain where there is decent tourism in the low season, the fear is that restrictions will return because of the rising numbers of infections in European countries. In the Canaries, there has been a slowdown in bookings, attributed by hoteliers to the increased infections and concerns about restrictions being reimposed.

Meanwhile, a group of leading organisations representing hotels, tour operators and others in the European travel industry are calling for there not to be travel restrictions, and they draw attention to the European Centre for Disease Prevention and Control (ECDC) having stated that these restrictions are ineffective in reducing transmission of the virus.

The president of the European Travel Agents and Tour Operators Association interprets this as the ECDC saying that stopping vaccinated people from travelling would have no impact on public health.

His association wants a common European approach to any travel restrictions and for this to be based on “proportionality”. Quite, but then demands for a common European approach have largely fallen on deaf ears over many months. There is little reason to believe that there will now be one.

It isn’t only the winter season for which there are concerns. Michael O’Leary of Ryanair reckons that holidaymakers will put off booking for next summer if there are increased restrictions. The picture has changed very quickly, as bookings had been running at almost 100% of what they were pre-Covid. Suddenly, and in the space of just a few days, the situation has changed for the worse.

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