Why there’s no reason for travel industry to fear return of Balearics ecotax

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Last month Biel Barceló, the vice-president and tourism minister for the Balearics,  told a parliamentary hearing in the islands that the government would once again apply a tourist tax in 2016.

The tax – termed an ‘eco-tax’ – will be spent on “environmental protection, sustainable tourism, the preservation and restoration of cultural heritage, improvement of infrastructure in tourist areas as well as in research, training and development in the tourism sector,” according to Travel Weekly.

Significantly, says Travel Weekly, the tax would apply not just to those people staying on the islands, but also those moored in cruise ships in its harbours. Cruise ship passengers will be charged €2 per day in high season, along with those staying in hotels rated above four-star. Those staying in

Lesser taxes will be applied to those staying in lower grade hotels and most apartments, the tax will be halved in low season and children aged under 14 will be exempt.

Unsurprisingly the announcement has been met with much criticism from the travel industry, which says it will cause tourists to stay away. Writing in a separate article in Travel Weekly, tourism consultant Andy Cooper says that when a similar tax was tried in the islands “German arrivals in Mallorca plummeted by 25%.”

Post Hoc, Ergo Propter Hoc. It’s a logical fallacy – ‘this happened after that, therefore it happened because of that.’ As one commentator on Cooper’s article suggests: “Germany entered recession towards the end of 2001, I wonder if that had anything to do with the decline in German tourists?” Another adds that: “Total visitor figures rose 300K in the period.”

Whatever the reason, my question is this: If a cruise ship stops in the waters of Mallorca for 1 or 2 nights, and as a result your cruise costs between two and four euros more – does that influence your decision on whether to book the trip or not? Or if you’ve booked a five star hotel for a week – at a cost of several hundred, or probably over a thousand euros, and the price goes up by fourteen euros for the week, do you look elsewhere?

And if you do, are you the sort of tourist the Balearics want? Just how much money are you going to put into the local economy once you arrive, if you baulk at spending two euros a day to protect the environment you are benefitting from?

As a further case in point – the small luxury hotel chain Soneva – which has five star properties in the Maldives and Thailand – adds a 2% environmental levy onto all its guests bills. (A levy sounds much friendlier than a tax despite the fact that 2% is going to be a lot more in real terms than 2 euros). In an interview I conducted for WTTC with its CEO this September, I asked him about the levy’s impact? Were guests turned off?

Our guests are more than happy to accept the small charge,” said Sonu Shivdasani. “And in fact, they tell us that they are so happy to come to a Soneva property and not feel guilty about going on holiday somewhere where no one cares about the environment.

“The foundation has so far raised almost US$ 6 million from the environmental levy, which is fantastic considering we are a small group of resorts. What is noteworthy is that this amount of capital for good causes has not been raised by blind donations but as a result of tweaking our business model.

“We have used this money to fund a forest restoration programme in northern Thailand where we have planted around half a million trees to mitigate 255,000 tonnes of CO2. The money has also funded a windmill in South India. The foundation is also using the money we raise to provide heavily subsidised cooking stoves in Myanmar and Darfur benefiting around 180,000 people to date. You can see that with the most incremental of changes, a company can do an extraordinary amount of good without negatively affecting business aims.”

Bring on the Balearics Eco Tax. Let it set a precedent that other destinations follow. And then start taxing aviation fuel too.

Jeremy Smithhttp://www.jmcsmith.com
Jeremy Smith is the editor and co-founder of Travindy. He is a writer and communications consultant working for a more responsible and sustainable tourism industry. He is the author of two books, writes a fortnightly blog on responsible tourism for World Travel Market, and provides consultancy to a wide range of companies and organisations, ranging from National Parks to individual hotels and tour operators.

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