Francina Armengol (Balearic president) has rejected HABTUR’s (Balearic Tourist Rental Association) request for the suspension of the ecotax with the claim that “it has never reduced from the island’s competitiveness”.
The Balearic holiday rental homes, for the time being, has declined the modifications residential proposals but instead, intends to switch to traditional rental homes to minimise the effect of the dreaded coronavirus.
Maria Gibert, manager of HABTUR, explains that the Balearic Islands has no plans of following in the wake of other sectors in the Peninsula, because of the differences in their average profiles.
The absolute cessation of tourism has indeed prompted owners to look for new formulas to derive profitability from these homes.
However, the government has set aside August for Balearic Island with the national tourists at its centre plan, even though Habtur is working to ensure that its associates are not interested in the change of model at least for the time being.
“There is no assurance to reconversion because the owners here are of a different profile. On the peninsula, there are many large companies after tourist rentals, whereas the vast majority here, say 90%, are small owners with a second residence for rental purposes.” Gibert explains.
The pandemic hit to the tourism industry is the largest known worldwide in peacetime, and tourist rentals, like the rest of the subsectors, estimate record losses. The Balearic Islands have 20,000 organised tourist rental homes that comprise some 120,000 places (14,000 and 90,000 in Mallorca).
The calculations to address the wide gap since the outbreak of the pandemic, and especially since the declaration of the state of alarm in Spain, would include multiplying these homes by the average weekly turnover, approximately 700 euros, considering that there was an occupation practically complete at this time of year. Therefore, losses of 14 million euros per week/ 56 million per month are estimated, – only directly without taking into account the losses in the complementary offer caused by the absence of this type of tourists.
“It is indeed a disaster,” Gibert confirms, to explain, however, that the cancellation of reservations for the extraordinary season is currently waiting. Almost all the reservations until June have already been cancelled, but it seems that those from July and August remained.
This can only mean that there is the hope that, the situation will normalize in the summer, for tourists who await impatiently, especially those who have paid the entire reservation or at least portion of it.
“Now some cancellation begins for those months but the vast majority continue to wait until the last moments.” However, Gibert maintains that “if something can be saved for national tourism and Interislas, it will not only be very late but equally very little.”
All in all, Gilbert cited some of the advantages that vacation rental sustains over hotel offer, like the absence of clusters of clients within the same space. “We have better prospects for recovery in this regard as there is a guarantee for better hygiene and control.”
Notwithstanding, the entire tourism sector maintains a unique alignment, in terms of a large part of the claims to the Administration, chiefly the suppression of taxes. The ecotax, for example, from which Habtur has asked for a bonus for all 2020.
They additionally summon for suspensions of payment of municipal taxes such as that of garbage collection.
To conclude, the Balearic president, Francina Armengol, recently declared that the Government is not considering any suppression or postponement, at least as regards the Sustainable Tourism Tax (ITS) or ecotax “because it is considered that there has never been a substracted effectiveness to the community”.