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1. SUSTAINABILITY AND MASS DESTINATIONS: CHALLENGES AND POSSIBILITIES. THE CASE OF THE BALEARIC ISLANDS
Dr. Antoni Serra
2. Background of the Ecotax
The Ecotax: description, philosophy and objectives
Main stakeholders’ response to the Ecotax
3. Balearic Islands: continuous growth in tourism arrivals during the last four decades: more than 10 millions tourists in year 2000.
Factors that caused Balearic’s mass tourism continuous growth:
The core islands product was attractive
The prices were competitive
Tour operators found the product easy to sell and profitable
The service delivery was competitive and profitable for suppliers even on a highly seasonal basis
Developers could make profit from their investment in facilities and staff shortages were not a problem
The all important image of the islands was strongly positive
Sustainability was not seen as an issue.
4. Balearic Islands have been growing on a ‘model’ based on:
Volume
Price competition
Standardisation of the holiday experience
Offer mainly focused on Sun & Sand & Sea
Relying exclusively on big tour operators for capacity distribution
A model of growth with positive effects in terms of economic development, wealth creation and job generation (Balearics one of the richest regions in EU)
But a model with some negative effects in terms of environmental impacts, extremely fast social changes and some damage to the image of the islands.
5. Sustainability of the tourism activity came on the top of the agenda during the 90’s, especially on the second half of the decade.
Most important measures introduced to increase quality of the tourism offer and to limit tourism capacity growth :
The ‘Cladera Acts’ I and II
POOT
Hotel Modernisation Plan
The Tourism Law
All these measures were exclusively focused on the industry supply side.
Less attention was being paid to the environment (although some restrictions on urban development on wide areas approved)
No attention was devoted to another important aspect of sustainable tourism development: the host community involvement.
6. To impose some sort of tourism tax has been on the Balearic’s tourism agenda for more than a decade.
The ‘Ecotax’ was introduced in 2001, but did not get enforced until May 2002.
The ‘Ecotax’ consisted in:
The payment of one euro (average) per person per day for every stay in a tourist accommodation in the Balearic Islands.
Children up to 12 were exempt from the tax, in addition to stays subsidised in accordance with the social programmes of any EU Member State.
No distinction between Balearic residents and visitors: everybody had to pay if stayed in a tourist accommodation.
The hotel company was responsible for collecting the tax and transferring it to the Public Administration.
Objective: to raise funds to be invested in environment protection and improvement of tourism areas.
7. Main differences between the Ecotax approach and the previous measures:
A stronger stress on the islands’ environment as the basic tourism resource which could guarantee future competitiveness. Environment needs preservation and restoration where damaged.
A stronger stress on preserving the islands historical and cultural heritage and using it as a tourism resource
Seeking an increased involvement of the host community in tourism development in the islands
Final goal: to achieve a progressive change in the ‘tourism model’ towards a more sustainable one in economic, physical and social terms and a more diversified tourism offer.
8. Tourist attitudes towards the Ecotax:
Fairly positive subject to the correct use of the funds collected (70% of the German population said they would not change their selected destination if such a tax was introduced).
9. Tourist attitudes towards the Ecotax:
Profile of the German with the highest willingness to pay an ecotax:
Place of residence: West Germany
Age: between 46 and 65 years old
Married
Education at University level
Liberal professionals and Public servants (medium and top levels)
Takes several holiday trips per year
In the holiday destination they specially value: a nice countryside, a preserved and clean environment, local gastronomy, cultural attractions and friendly local people.
They tend to travel to destinations not very crowded and not exclusively/mainly based on sun&beach mass tourism.
10. Tourist attitudes towards the Ecotax:
Profile of the German with the lowest willingness to pay an ecotax:
Place of residence: East Germany
Younger than 20 years old
Single
Lower levels of academic education
Unskilled worker
Just one holiday trip per year
In the holiday destination they especially value: good value for money ratio, nice beaches, exciting nightlife and easy access to the destination
They tend to travel to traditional sun & beach holiday mass tourism destinations
11. Tourist attitudes towards the Ecotax:
12. Tourist attitudes towards the Ecotax:
13. Balearic residents attitudes towards the Ecotax: strongly positive
14. Hoteliers and tour operators attitude towards the Ecotax:
Hoteliers:
Very negative in the case of the biggest hotel chains with multinational operations.
Small and medium size hoteliers showed a more neutral position.
Hoteliers were basically complaining that:
The measure was not neutral in economic terms: tourists staying in unregulated accommodation (villas, apartments…) were not subject to payment of the Ecotax.
The measure was negatively damaging the islands’ image
Not happy about the fact of collecting the tax.
Tour Operators: although not directly involved in the ‘internal struggle’, repeatedly manifested their opposition to the measure.
15.
In September 2003, the new Balearics Government removed the Ecotax. Thus the measure has been in force just one and a half year.
Funds raised in the year 2001 amounted to 45 millions euro.
According to the new Government, removal of the ecotax will not imply, in any sense, the end of funding for protecting the Balearics environment and improving tourism resorts. The only thing that will change is the origin of funds, which will come from public budget and public donations.
The ‘Foundation for the Sustainability of tourism in the Balearic Islands’ has been recently created with the same objective of raising funds for similar kinds of projects as the Ecotax.
16. Despite its good objectives (to increase the islands’ long term competitiveness), the Ecotax became the most controversial tourist measure ever taken in the history of tourism in the Balearics. At the end it became a political issue rather than an economic one.
Some lessons that can be learnt from the experience:
Demand clearly accepts this kind of tax subject to the correct use of the funds collected. In this respect, to give as much information as possible to the potential visitor about the objectives and projects derived from the measure is a key aspect.
People with higher levels of education and higher incomes are more in favour of such a measure and vice versa. Therefore, from a strategic planning point of view it could be used as a positioning concept to go more for ‘up market’.
Tourism destinations with higher predominance of low educational levels, low income visitors, seeking basically sun&beach and nightlife entertainment are in a worse position and could have more problems in the short run when trying to establish a similar kind of tourist tax.
To impose such a tax would be difficult in any destination if a previous consensus between main stakeholders is not previously reached.
17.
Some lessons that can be learnt from the experience (cont.):
It is extremely important to ensure neutrality of the measure.
If consensus is not reached short run difficulties will, eventually, prevail over long term sustainable objectives. Unfortunately, sustainability goes down to a second place in the list of priorities when market difficulties come.
It seems that ‘big tourism players’ (big tour operators and large hotel chains operating at a multinational level) do not welcome a measure like this one imposed in very important destinations. As a global players they are afraid of some kind of ‘domino effect’ f such a measure is successfully implemented in a leader destination.
In the end, when tourism demand is strong, sustainability, in practical terms, is a question of money:
either to stop further developments, or
when some sort of over development or wrong development has taken place in some areas, to restore things in an appropriate way.
The main issue is the source where the funds to be invested come from. One alternative is from the tourism sector itself. The other is from private donations and/or public budget.
Will the later work?