foto_Diagnóstico

1. Context of the area and its Tourism

 

Located in the Western Mediterranean Sea, Mallorca is the largest island in the Balearic archipelago spanning over 3,500 km2. With 53 municipalities and a total current population of 880,113 (2018 census), over 60% of its residents live in the metropolitan area of Palma.


The island’s prominent tourism sector, which resulted from a major transformation several years ago, can currently be identified as mass tourism based on a tourism system that concentrates its hotel stock in the triangle formed by the districts of Badia, Llevant and Nord, where 88% of all the island’s hotel beds can be found.


Together with changes in demand characteristics, and events such as Thomas Cook’s bankruptcy, which had a huge impact on the worldwide tourism market, this situation highlights the need to develop a new approach within the island’s tourism and area context.


This new approach should constantly strive for a balance between the island and its tourism by not only promoting its major infrastructures, but also all its major attractions, which range from its beautiful beaches to the Tramuntana Mountains.
 

 
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STPM

2020-2023

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Based on the above, the island’s current internationally well-known position can kick start the outline of a new tourism scenario.  

This position, according to the latest data published by the Mastercard Global Destination Cities Index (2019) places the city of Palma in the Top 20 of the main cities worldwide,  even above cities such as Bali and Hong Kong.

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This position becomes more apparent when we think about the impacts of this volume of visitors on the area , given that this index again places the Island of Mallorca, under the City of Palma, as one of the benchmark destinations worldwide. This time it is in the Top 9, with its impact largely compared to cities like Tokyo and Paris. This impact is further accentuated when evaluating tourism spend per resident (ratio between the spend of international visitors overnight and GDP), an index in which Palma de Mallorca records a spend of $10,421, only below the cities of Phuket ($20,459) and Dubai ($11,006).

Top 20 Destination Cities by International Overnight Visitor Spend (2018)

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2. Main stakeholders involved: INSTITUTIONAL FRAMEWORK

 

Strategic and promotional tourism planning in the Balearic Islands is ample in structure and size in both the public and private sectors. This structure spans from the supramunicipal scale, led by the Balearic Government, through the AETIB, to the municipal scale, where town councils individually make an effort to promote and incentivise tourism activity in their municipalities.

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Part of this context is the  Mallorca Tourism Foundation, which is integrated in the Council of Mallorca. The functional framework of this foundation follows Decree 7/2018, dated 23 March, transferring to the Island Councils of Mallorca, Menorca, Formentera the responsibilities and services inherent in their powers for tourism promotion.


Although this entity is 100% public, it has a Tourism Advisory Board in which the private sector is present as a strategic point of reference for advice and consultation.  Some of the entities forming this Advisory Board are the Hotel Federation of Mallorca (FEHM), the Hotel Chain Group and the Chamber of Commerce.


The basic responsibilities of the main structures in tourism planning on the Balearic Islands are detailed below for reference.
 

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Decree 7/2018, dated 23 March, transferring to the Island Councils of Mallorca, Menorca and Formentera the responsibilities and services inherent in the powers of these island councils, currently exercised by the Government of the Autonomous Community of the Balearic Islands, for tourism promotion and to expand, adapt and complete the responsibilities and services in this regard transferred to the Insular Council of Ibiza by Decree 45/2015, dated 22 May.

 

3. Analysis of destination positioning

The Island of Mallorca is today one of the leading benchmark destinations for the Sun & Beach product. Nevertheless, new models and tourist behaviour patterns make it necessary to consolidate its position to ensure its global competitiveness, understood as:


“A country or a region’s ability to produce goods and services via its companies that meet the demands of the international market and simultaneously improve the population’s quality of life..” Dr. Antoni Riera Font.

Antoni Riera Font (Santa Margalida, 1969) is a professor of Applied Economics at the University of the Balearic Islands, the institution where he obtained his PhD in 1998 and where he has been a tutor and a researcher since 1992. A promoter of the Research Group in Tourism Impact Analysis (AEIT), his main lines of research concern the environmental economy, especially in economic evaluation techniques based on discrete choice models and the regional economy.
 

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Based on the latest update of the Global Competitiveness Index of the Balearic Islands (i|ICG ; 2017), the Balearic region as a whole is in position 173 of the global competitiveness ranking formed by 264 regions in the EU-28. The region has climbed two places since the previous result obtained in this index in 2014 (position 175).


From an area standpoint, this rise in the global competitiveness ranking is mostly explained by the Balearic Islands overtaking other Spanish regions by two places: Asturias (position 175) and Castilla-León (position 177). Consequently, the islands are currently in tenth place out of the whole formed by 17 autonomous communities and 2 autonomous cities in Spain.

3.1 Current and foreseeable positioning: INITIAL APPROACH

Given that this study evaluates the essential parameters to measure improvement in the competitiveness of the Balearic destination as a whole (Tourism Intensity, Accommodation Offering, Connectivity with outbound markets, etc.), we need to establish the position of the Island of Mallorca  compared with its competitor destinations and also on attributes or parameters that will dictate the island’s vision for the future. These parameters are:

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The i|ICG is a tourism competitiveness index that determines and monitors the competitive position of the Balearics in its most direct competitive environment. The results make it possible to establish shared objectives in tourism competitiveness, to prioritise critical factors to promote the sector’s development and contributions, and to draw up strategic destination and business guidelines to improve the archipelago’s current position.

  • Connectivity: Although the concept of connectivity is quite broad, in this case, as it is in an  “ISLAND” context, we need to analyse tourism’s dependence on flight connections, and also the volume of passengers arriving on the island and their direct relationship with load capacity. Mallorca Airport is in third place where passenger volume is concerned, with almost 16 million passengers recorded in 2018, representing a total traffic share of 14.7%.

  • Consolidation: Since the 1960s, the island has become consolidated as one of the main national destinations and one of the best European tourist destinations in the “sun & beach” segment. Nevertheless, its current positioning needs to be assessed from the perspective of supply and demand by observing Mallorca’s competitiveness and value for money compared with other competitor destinations.

  • Innovation: Considering the versatility and potential of the Island of Mallorca, its innovation level compared with its competitor destinations must be assessed from a technological and market perspective. The comparison needs to focus on the destination’s ability to generate products that give the destination value and diversity its offering.

  • Sustainability: According to the WTO,  sustainable tourism can be defined as “tourism that takes full account of its current and future, economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment and host communities”.

  • Smart Tourism: The presence of technological tools for measuring, analysing and assessing data currently form an essential base within strategic planning, allowing the processing of knowledge, and adapting it to the requirements of demand and the destination as a whole.

  • Branding and Promotion: Assessing this parameter is crucial within the current concept of tourism promotion as it makes it possible to measure the main competitor destinations’ current level of “emotion” or capacity to convey. In this regard, elements like the brand, the slogan and the presentation of the offering as a whole and even the tone used to reach the potential segments improve the destination’s image and reputation, introducing a new value in addition to strategic marketing actions.

  • Seasonality: Another of the main aspects of the Island of Mallorca’s positioning to consider is seasonality, which is very pronounced as we are talking about sun & beach destinations. However, its role in positioning is not necessarily seen as negative, but rather as having an influence on its ability to transform and its versatility as a tourist attraction.

Considering the overall assessment of the above-mentioned variables, we find that the capacity to grow of a destination like Mallorca is closely related to its capacity to innovate  tourism products and its capacity for market outreach (branding and promotion), in which smart destination (smart tourism) tools are crucial for making decisions about the destination and for its strategic planning.

Competitive positioning of Mallorca (Current and desired)

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Mallorca’s current and foreseeable positioning becomes valuable when it is compared with its main competitor destinations, enabling us to come up with a roadmap for strategic decision-making within the destination and for future promotion actions. Consequently, the following initial comparison has been made:

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The first survey of variables in the initial comparison shows that Mallorca’s future position is clearly progressing compared with some of its main competitor destinations,  especially in the strategic action fields and/or variables mentioned above as essential in making decisions for future tourism and promotional plans for the Island of Mallorca.

The considerable volume of tourism infrastructure in Mallorca and its excellent connectivity and growth potential for products points towards a revival of the destination, which will be boosted by its commitment to sustainability and the introduction of smart tourism measures.

 

Potential positioning of Mallorca compared with its main competitor destinations (Initial Survey)

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4. Benchmarking

 

This first approach to the current and foreseeable strategic positioning of the Island of Mallorca includes identifying and evaluating best practices that will have a greater impact on promoting Mallorca as a tourist destination and that have been implemented in each of the areas of interest.


Consequently, specific processes and actions have been assessed based on four main lines of approach:


Innovation: One of the main current challenges that every tourist destination faces is updating its use of new technologies in decision-making and in establishing specific tourism promotion actions.

Sustainability: As with innovation, sustainability is now one of the basic premises helping to boost destinations and the tourism sector as a whole.

Connectivity: The island of Mallorca is currently an important tourism destination. However, we need to promote it and exploit its capacity to reach
other potential markets.

Social Responsibility: Although this is included under sustainability, this is another of the essential aspects worth highlighting in tourism promotion, especially of a pioneering and mature destination such as the Island of Mallorca, which requires new tourism management that stresses the importance of social issues as a key means of improving reputation.


 
 

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Diagnosis and Benchmarking Analysis

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